Softchoice: Networking, Services Needs Drive Unis Lumin Acquisition8:10 AM EST Wed. Nov. 23, 2011
As Canada's largest VAR by revenue, Toronto-based Softchoice has seen its business priorities shift over the years from high-volume product resale to a more margin-friendly mix of products and managed and professional services revenue.
To hear CEO David MacDonald tell it, the company's recent, $17 million acquisition of Oakville, Ont.-based Unis Lumin -- another Canadian solution provider powerhouse -- will speed that transition, and give Softchoice a bigger networking and services footprint than before.
"We like other players are focused on converged infrastructure and the changes brought on by virtualization and networking," MacDonald told CRN. "[Unis Lumin] was another strong Canadian company and it made sense."
Softchoice has seen a compound annual growth rate averaging 20 percent over the last decade, MacDonald said. Though perhaps best known in the Canadian market, more than half of Softchoice's business is U.S.-based, and the company holds Gold certification with Cisco in both the U.S. and Canada.
By acquiring Unis Lumin, also a Cisco Gold partner as well as a Microsoft Gold partner and VMware Enterprise Reseller partner, Softchoice's Cisco footprint is further expanding.
The acquisition brings Softchoice more than 50 managed services-focused employees and about 800 new customers. Unis Lumin's Keystone, its managed services offering, will provide a new recurring revenue stream for Softchoice as well. Along with Keystone, Unis Lumin's professional services business and its sizable networking practice were both attractive, MacDonald indicated.
Most of Unis Lumin's 130-person team will join Softchoice following the acquisition's closing, which is expected to happen within the next 30 days, MacDonald said. Both of Unis Lumin's co-founders, however -- CEO John Breakey and CTO Morro Lollo -- are expected to depart after assisting the transition.
In a statement following the acquisition's announcement in mid-November, Breakey said Unis Lumin needed a new level of capital and infrastructure investment to sustain its growth.
"I've had the pleasure of knowing Dave MacDonald over the past few years and came to realize that his company was a great match for us," Breakey said. "Softchoice is an amazing success story and now, with the combination of Unis Lumin resources, they will become an even more powerful resource to both our customers and their own. My last duty as CEO is to make sure our people and our customers have a bright future. I believe that job is done."
The Unis Lumin acquisition is another example of widespread M&A activity among large VARs and MSPs this year, particularly among networking and data center-centric solution providers.
Other recent blockbusters have included Presidio's bid to acquire INX, the acquisition of MSP MindShift by electronics retailer giant Best Buy, and a spate of purchases this year by the likes of managed services powerhouse All Covered and infrastructure and collaboration specialist Carousel Industries.