10 Massive M&A Deals Reshaping The Channel: December 2015
The Biggest Partners Get Even Bigger
Powerhouse solution providers drove a lot of December's M&A action, with six of the 10 biggest channel deals carried out by VARs that are among the 60 largest companies on the 2015 CRN Solution Provider 500.
Capabilities in verticals such as energy, health care and the U.S. federal space were in high demand last month, with four of the channel firms swooped up having a pronounced industry focus. Three of the acquired partners specialize in cloud, while three other focus on security.
Three of the purchased companies are in the southern United States, two are in the Northeast, two are on the West Coast and two are abroad. The acquired companies employ a combined 12,725 workers.
The acquisitions are in order based on the total numbers of employees at the firm being acquired.
10. ePlus Technology
Company Acquired: IGX
Head Count: 30 employees
Annual Sales: $51 million
Purchase Price: Not disclosed
Date Of Announcement: Dec. 7
Summary: ePlus, No. 32 on the 2015 CRN Solution Provider 500, boosted its international security portfolio by acquiring Rocky Hill, Conn.-based security provider IGX.
ePlus Senior Vice President Kley Parkhurst said the acquisition was motivated by the demand from ePlus' clients for international support. IGX has an office in Aldgate, England.
By acquiring IGX, ePlus gained access IGX's U.K-.based subsidiary IGX Global and can now better serve its U.S. customers with offices overseas.
The deal increased ePlus' workforce from around 970 to more than 1,000.
9. Emtec
Company Acquired: Summit Technology
Head Count: 51-200 employees
Annual Sales: Not disclosed
Purchase Price: Not disclosed
Date Of Announcement: Dec. 3
Summary: Radnor, Pa.-based Emtec, No. 117 on the 2015 CRN SP 500, boosted its cloud capabilities by acquiring Oracle solutions specialist Summit Technology.
Athens, Ala.-based Summit Technology is a health-care-focused solution provider that specializes in Oracle's human capital management, ERP and cloud applications. The deal comes just five months after Emtec acquired Oracle applications specialist Intelenex, Irving, Texas.
Emtec plans to use acquisitions to increase its rate of growth in the coming year due to financing the company secured from LBC Credit Partners last month.
8. New Signature
Company Acquired: InfraScience
Head Count: 55 employees
Annual Sales: Not disclosed
Purchase Price: Not disclosed
Date Of Announcement: Dec. 1
Summary: Top Microsoft solution provider New Signature scooped up yet another Microsoft partner, buying InfraScience to bolster its presence in the Southeastern U.S.
The addition of Atlanta-based InfraScience will give the Washington, D.C.-based systems integrator more capabilities in its identity and access management practices, both of which lie at the root of New Signature's growing cloud computing business.
The deal also gives New Signature a stronger presence in the health-care vertical, which is currently one of the top areas for IT investment. New Signature's U.S. health-care practice had been far smaller than its Canadian operations.
7. Perficient
Company Acquired: Enlighten
Head Count: 75 employees
Annual Sales: $12 million
Purchase Price: Not disclosed
Date Of Announcement: Dec. 4
Summary: Perficient purchased Ann Arbor, Mich.-based Enlighten to expand its digital strategy, creative services and marketing expertise.
The St. Louis-based company, No. 56 on the 2015 CRN SP 500, said Enlighten specializes in developing, implementing, integrating and supporting digital experience solutions. The company also excels in consulting, digital agency, technology, sales and support.
Enlighten clients will be able to take advantage of Perficient's broader range of services and deeper pool of consulting talent, particularly around big data analytics, business optimization and ERP management. The vast majority of Enlighten's employees -- including the entire consulting team -- will join Perficient.
6. Logicalis
Company Acquired: Thomas Duryea
Head Count: 125 employees
Annual Sales: $50 million
Purchase Price: Not disclosed
Date Of Announcement: Dec. 1
Summary: Logicalis, No. 27 on the 2015 CRN SP 500, bought data center service provider Thomas Duryea to boost its cloud capabilities in Australia.
Logicalis said the purchase of Richmond, Australia-based Thomas Duryea will strengthen the company's professional services capabilities around desktop, data center, storage and cloud and integrate easily into Logicalis' existing offerings.
The deal also will bolster Logicalis' relationship with key vendor partners such as EMC, Dell, NetApp, VMware and Microsoft. Thomas Duryea was Logicalis' fourth acquisition of 2015.
5. Accenture
Company Acquired: Cimation
Head Count: 230 employees
Annual Sales: Not Disclosed
Purchase Price: Not Disclosed
Date Of Announcement: Dec. 9
Summary: Accenture, No. 2 on the 2015 CRN SP 500, agreed to acquire Houston-based industrial Internet of Things consulting firm Cimation, boosting the consulting giant's proficiency in the natural resources and energy verticals.
Cimation integrates operational equipment technology like field sensors for gas and oil wells and IT systems to capitalize on opportunities around automation solutions, asset analytics and cybersecurity for industrial control systems.
This will enable companies to improve the maintenance and operations of their wells, pipelines, refineries, chemical plants and mines, according to Accenture.
4. ConvergeOne
Company Acquired: Sigmanet
Head Count: 250 employees
Annual Sales: Not disclosed
Purchase Price: $40 million to $45 million
Date Of Announcement: Dec. 11
Summary: Eagan, Minn.-based ConvergeOne struck a deal to acquire Sigmanet, a 25-year-old firm that is one of California's largest solution providers.
Ontario, Calif.-based Sigmanet, No. 131 on the 2015 CRN SP 500, is a 2015 CRN Triple Crown Winner (placing on the 2015 CRN SP 500, Fast Growth 150 and Tech Elite 250 lists). The company focuses on cloud computing, data analytics, mobility, security, data center IT, unified collaboration and end-user computing.
ConvergeOne said Sigmanet was appealing due to its geographic presence in the Western United States, familiarity with Cisco and EMC and capabilities around cloud computing, security and the education vertical.
3. Ingram Micro
Business Acquired: Odin Service Automation
Head Count: 500 employees
Annual Sales: Not disclosed
Purchase Price: Not disclosed
Date Of Announcement: Dec. 2
Summary: Ingram Micro purchased the Odin service automation platform to turbo-charge cloud software development and strengthen the distributor's presence in the telecom and hosting spaces.
The $46 billion, Irvine, Calif.-based distribution giant began licensing Odin, owned by Parallels Holdings, in 2013, using the cloud service provider to build Ingram Micro's automated Cloud Marketplace, and announced an equity investment in Renton, Wash.-based Parallels the following year.
Having Odin as part of Ingram Micro should allow the distributor to accelerate the functionality of its Cloud Marketplace and the on-boarding of additional vendors and cloud service providers, according to the distributor.
2. CACI
Business Acquired: L-3 National Security Solutions
Head Count: 4,000 employees
Annual Sales: $1 billion
Purchase Price: $550 million
Date Of Announcement: Dec. 8
Summary: CACI, No. 16 on the 2015 CRN SP 500, agreed to acquire L-3's struggling government services group to boost its enterprise IT business and expand pipelines in the national security space.
New York-based L-3's government services group reported a 50 percent drop in operating income and a 19 percent drop in sales over the course of 2015.
However, CACI CEO Ken Asbury told investors that folding L-3's NSS business into CACI will create "instantaneous change" thanks to synergies that will reduce the division's overall costs and make its rates more competitive.
1. CSC
Company Acquired: Xchanging
Head Count: 7,409 employees
Annual Sales: $844 million
Purchase Price: $720 million
Date Of Announcement: Dec. 9
Summary: CSC won a three-way bidding war for London-based IT outsourcing firm Xchanging, which provides business processing and procurement services to clients in Europe, Australia and the U.S.
The Falls Church, Va.-based company, No. 5 on the 2015 CRN SP 500 prior to spinning off U.S. government services division CSRA in November, beat out Capital plc, another U.K.-based outsourcing company, and private equity firm Apollo Global Management with its all-cash deal. The acquisition is expected to close in the next six months.
CSC said its hopes to leverage Xchanging's capabilities in commercial insurance, wealth management outsourcing, infrastructure and applications.