8 Massive M&A Deals Reshaping The Channel: April 2016

The Channel Goes Global

Solution providers looking to obtain new specializations last month looked beyond the Home of the Brave, with five of the eight acquired companies located outside of the United States. Among the international acquisition targets, two are based in Asia, two are based in Europe and one is based elsewhere in North America.

Cloud capabilities were once again in high demand, with channel firms seeking out skills around everything from public cloud, to cloud automation, to cloud infrastructure.

Five of the eight acquirers can be found in the top 40 of the CRN Solution Provider 500. Overall, the companies acquired last month employ a combined 24,900 people.

Acquisitions are ranked based on the total number of employees at the firm being acquired.

8. SS&C Technologies

Company acquired: Nervanix

Head count: 10 full-time equivalent employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 13

SS&C – No. 38 on the CRN Solution Provider 500 – bought a one-third interest in learning technology provider Nervanix.

The Naples, Fla.-based company will add to SS&C's financial services training offerings with its Clarity training technology, a program designed to measure trainee attention via brain activity collected by a headset. The program adjusts the pace of learning based on information collected, helping users absorb the most content possible.

Adam Hall, founder and CEO of Nervanix, will join SS&C as a senior vice president and will continue to be the majority owner of Nervanix, according to Normand Boulanger, SS&C’s chief operating officer.

7. Pegasus Technologies

Merger partner: Alura Business Solutions

Head count: 12 employees

Annual revenue: $2 million

Purchase price: Not disclosed

Date of announcement: April 25

Two Philadelphia-area members of CRN’s Managed Service Provider 500 merged to strengthen their technical support and cloud and infrastructure capabilities.

The deal will give Pegasus Technologies access to additional back-end technology such as virtual desktop infrastructure, cloud hosting and cloud application tools. And Pegasus will roll its Match-IT program out to Alura’s clients, which assigns a dedicated IT team to managed service customers based on personality assessments of the end user, as well as to Alura-Pegasus’ workforce.

Pegasus leader Matthew Tucker will be CEO of the combined company, while Alura leader Jason Derstine will serve as its president.

6. Black Box Network Services

Company acquired: Cloudium

Head count: 12 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 11

Black Box Network Services - No. 34 on the CRN SP 500 - acquired a small, privately held Irish desktop virtualization hardware and software developer to strengthen its position in the high-performance, kernel-based virtual machine (KVM) and KVM-over-Intellectual Property marketplace.

KVM is a virtualization infrastructure for the Linux kernel.

Black Box said in a statement that it plans to employ Cloudium’s development team, noting their expertise in software and development will complement the 11 existing KVM hardware products in Black Box’s portfolio.

5. Ingram Micro

Company acquired: Ensim Corp.

Head count: 51-200 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 4

Ingram Micro made its sixth acquisition in the past six months by purchasing San Jose, Calif.-based Ensim, a firm focused on automating, orchestrating and provisioning business applications in the cloud.

Ensim enables partners to manage and monetize a range of solutions from infrastructure and hosted business applications to cloud and –as-a-Service offerings. Ensim has more than 5 million seats deployed worldwide and is used by more than 2,000 organizations and government agencies through telecom partners, cloud hosting companies, VARs and MSPs.

Ensim has added 60 new features over the past year such as ticketing, business analytics and reporting, and advanced billing configuration, according to the Irvine, Calif.-based distributor.

4. Dimension Data

Company acquired: Ceryx

Head count: 65 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 4

Dimension Data has purchased Ceryx to strengthen its Microsoft public cloud offerings for end users with hybrid workloads.

The New York-based company, No 10. on the CRN Solution Provider 500, said its acquisition of Toronto-based Ceryx will make it easier to serve businesses where some employees need to stay on premise or use private cloud to avoid latency or sovereignty issues, while others can use the more cost-effective public cloud.

Ceryx’s capabilities will enable Dimension Data to provision, manage and optimize cloud workloads around programs such as Office 365, Exchange, Sharepoint and Skype for Business.

3. Cognizant

Company acquired: ReD Associates

Head count: 70 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 28

Cognizant purchased a minority interest in a consultancy that helped companies like Ford, Adidas, Intel and Samsung apply behavioral insights to business strategy.

The Teaneck, N.J.-based company, No. 8 on the CRN Solution Provider 500, said acquiring a 49 percent stake in New York- and Copenhagen-based ReD Associates will give Cognizant a more complete understanding of what clients really want and need.

Before this partnership, ReD’s anthropologists, sociologists and ethnographers would make recommendation about how human beings interact with cutting-edge technology, such as self-driving cars, but lacked the technological chops to build what they were recommending.

2. Accenture

Company acquired: IMJ

Head count: 694 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: April 5

Accenture - No. 2 on the CRN Solution Provider 500 - scored its second acquisition of 2016 with the purchase of a majority stake in the Japanese full-service digital agency IMJ Corp.

The deal boosts Accenture's digital business in Japan by increasing the reach of the company’s $3 billion Interactive division, which provides digital marketing services for clients.

This acquisition is just one of 18 that Accenture has executed over the past 12 months, in line with a company goal set last year by Accenture leadership to invest $1 billion in acquisitions during its current fiscal year.

1. Blackstone

Company acquired: Mphasis

Head count: 24,000 employees

Annual revenue: $650 million

Purchase price: $825 million

Date of deal: April 4

Hewlett Packard Enterprise sold its majority stake in Bangalore, India-based solution provider Mphasis to the world's largest private equity fund, Blackstone Group.

According to an Mphasis executive, the deal - which is expected to close in the second half of fiscal 2016 - will open up opportunities for Mphasis to do business within Blackstone's full portfolio - which includes about 90 companies, including the channel's largest pure-play security solution provider, Optiv Security.

HPE, in a statement, said it will continue to do business with Mphasis and plans to renew a services contract with the Indian company for five years as part of the deal with Blackstone.