NWN Snaps Up West Coast Public Sector VAR

"We'd gotten to know them, and the important aspect to us is culture and market focus, rather than geography or anything else. That's more important to us than maps and dartboards," said Mont Phelps, president and CEO of Waltham, Mass.-based NWN. "They happen to be in California. It's clearly a boom-or-bust economy there, but they've actually been able to grow their business, which says something about how they're able to grow market share."

Western Blue employees will be retained, Phelps said, and Western Blue President Terry Joslin will continue on as president while also becoming an executive vice president with NWN, reporting to Phelps. The company will be known as Western Blue, An NWN Company.

Western Blue specializes in state and local contracts and has offices in Sacramento, Fresno, Calif., and Salt Lake City. The company's practices include data center optimization, network, wireless and unified communications, and security and compliance. Among recent wins was a contract for Hewlett-Packard workgroup servers through the California Department of General Services.

By adding Western Blue, NWN, which is itself a quarter-billion-dollar company, will now have 11 national offices and more than 400 employees.

"Every one of these acquisitions brings us something. They're [Western Blue] fabulous with HP, and they have a relationship with McAfee that we don't," Phelps said of new vendors and lines to which NWN will now have access. "But the most attractive aspect is the really deep relationships they have with their customers. They've been really exceptional at servicing, and that's what held them in good stead during the downturn."

The acquisition closed at the end of 2009. Phelps declined to provide financial details but said it "was a very good deal for all involved" and did not require private equity investment or other "outside money."

Phelps said NWN and Western Blue had partnered in the past, but both companies saw the most value and growth opportunity through a merger rather than a strategic partnership.

"It's the most intimate relationship and it gives us a platform on which to grow. Application development, management services, Cisco networking -- we can map that all in," Phelps said.

The Western Blue pickup continues NWN's aggressive expansion plans both geographically and into the public-sector vertical. NWN target="_blank">in August acquired TiBA Solutions in Greenville, S.C, which had a strong developer practice and ample public-sector presence.

"We can't afford the cost of government, and we have to get more efficient. One way to do that is technology," Phelps said. "The other big thing is that the average age of government employees is getting way up there, and there's going to be a lot of people leaving. A lot has to change."

Phelps said NWN would continue to look for strategic acquisitions.

"It's the folks that have their act together that have a huge advantage vs. the ones that are scurrying around and playing defense," he suggested.

"Integrating Western Blue with NWN will make us both even stronger," said Western Blue's Joslin in a statement. "Western Blue has achieved outstanding results in the markets it serves because of its talented professionals and its distinctive solutions. It will fit in brilliantly with the NWN culture of doing the right thing right for our customers."