16 Massive M&A Deals Reshaping The Channel: October 2016

Head In The Cloud

Solution providers were champing at the bit last month to get a bigger footprint in cloud, with five of the 16 acquired companies specializing in cloud services, hosting or communications.

Vendor-specific expertise was also highly sought, as was industry specialization around banking and finance, government services, and oil and gas.

Eight of the acquired companies are based in the Northeast, three are based in the Midwest, two are based in the South and overseas, and one is based on the West Coast. Eight of the acquiring companies appear in the top 65 of 2016 CRN Solution Provider 500 rankings.

Acquisitions are ordered on the following slides based on the total number of employees at the firm being acquired.

16. Micro Strategies

Company acquired: New England Systems

Head count: 11-50 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 25

Micro Strategies acquired Ludlow, Mass.-based New England Systems (NES) to expand its geographic reach on the East Coast and boost its proficiency around big data, business analytics and information management solutions.

NES provides complete, end-to-end information management solutions for companies throughout the Northeast, a region also served by Parsippany, N.J.-based Micro Strategies. The acquisition is expected to close by the end of 2016.

Micro Strategies is planning to build an Innovation Center in the Boston area following the close of the NES acquisition to further support current and prospective customers in the New England area.

15. Evolve IP

Company acquired: Xtium

Head count: 11-50 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 26

Cloud services provider Evolve IP, Wayne, Pa., acquired King of Prussia, Pa.-based Xtium to bolster its ability to service customers in highly regulated industries.

Xtium will add to Evolve IP's expertise in verticals such as health care. Both companies focus on delivering industry expertise in hosting customer applications on compliant infrastructure.

Xtium is the latest in a string of cloud-focused acquisitions for Evolve IP. Evolve IP has acquired eight companies since its founding in 2006, with Great Hill Partners, a private equity firm, taking a majority stake in the solution provider in May.

14. Pamlico Capital

Company invested in: 10th Magnitude

Head count: 11-50 employees

Annual revenue: $4.5 million

Purchase price: Not disclosed

Date of announcement: Oct. 25

Chicago-based 10th Magnitude received a "significant growth equity investment" from Charlotte, N.C.-based private equity firm Pamlico Capital to capitalize on the soaring Microsoft Azure cloud services opportunity.

The private equity investment has the potential to reshape the Azure services landscape, with 10th Magnitude investing heavily to provide a broader and deeper set of Azure services to customers globally. The only thing holding back further growth for Azure service providers like 10th Magnitude is access to hard-to-find talent, the company said.

10th Magnitude is a member of the Azure Partner Advisory Council and has achieved the elite status of a Microsoft National Solution Provider.

13. Red River

Company acquired: Accunet Solutions

Head count: 11-50 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 26

Government-focused solution provider Red River, No. 52 on the 2016 CRN Solution Provider 500, is expanding its commercial business and geographic reach with the acquisition of Boston-based Accunet Solutions, No. 292 on the 2016 CRN Solution Provider 500.

Accunet brings to Claremont, N.H.-based Red River a very strong Dell EMC technology partnership, as well as a strong commercial business. About 20 percent of Accunet's business is with government entities.

The company also gets Accunet's entire team, including founder and CEO Alan Dumas, who will serve as president of Red River's commercial division, and Mark Matheson, Accunet vice president, who will serve as Red River's new vice president of commercial sales.

12. Accenture

Company acquired: Allen International

Head count: 11-50 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 18

Channel giant Accenture acquired London-based consultancy Allen International to help banking clients reinvent their physical branches and digital offerings.

The Chicago-based company, No. 2 on the 2016 CRN Solution Provider 500, said Allen International will help banks transform their branches with new digital offerings and networks to reduce costs, increase revenue and better engage customers.

Accenture will also benefit from Allen International's history in the vertical, in which the company has worked with more than 350 banks around the world.

This acquisition strengthens Accenture’s current distribution transformation offering, which analyzes how banks interact with their customers.

11. Marco

Company acquired: Infinity Technology

Head count: 19 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 10

St. Cloud, Minn.-based IT services company Marco boosted its managed IT capabilities by purchasing Green Bay Wis.-based Infinity Technology.

The deal folded Infinity’s staff into the Marco team, bolstering the company’s managed IT, cloud and web development services, while expanding the company’s geographic reach in Wisconsin.

This is the 15th acquisition Marco has completed over the past three years, growing the company to its current size of 1,130 employees who serve more than 31,000 customers from 50 locations across the country.

10. SS&C Technologies

Company acquired: Salentica

Head count: 30 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 24

SS&C Technologies acquired CRM platform developer Salentica to help bolster its portfolio of CRM solutions.

Following the acquisition, the Salentica platform was integrated with SS&C's Black Diamond Wealth Platform.

The Windsor, Conn.-based company, No. 36 on the 2016 CRN Solution Provider 500, brought all of Salentica's employees into the business, infusing its staff with new expertise in integrated CRM solutions for both the Microsoft Dynamics CRM and Salesforce CRM platforms.

New York-based Salentica now operates as a business unit under SS&C with its current leadership team, including founder and President Bill Rourke, slated to remain in place.

9. Connection

Company acquired: GlobalServe

Head count: 30 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 13

Connection, No. 21 on the 2016 CRN Solution Provider 500, purchased GlobalServe to make it easier for U.S.-based multinational firms to support the technology needs of their offshore divisions.

The Merrimack, N.H.-based company, formerly known as PC Connection, said its acquisition of GlobalServe would make it possible for international conglomerates to quickly and easily fulfill their IT needs by using GlobalServe's procurement system to work with a roster of 500 solution providers with a combined 25,000 employees across 174 countries.

Englewood Cliffs, N.J.-based GlobalServe is most valuable for multinational firms, thanks to its procurement engine, and could be a good fit for roughly 40 percent of Connection's customers, according to Connection.

8. Special Counsel

Company acquired: D4

Head count: 50-200 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 4

Jacksonville, Fla.-based legal staffing and eDiscovery solutions company Special Counsel bouth D4 to enhance the company’s litigation support abroad.

D4 is based in Rochester, N.Y., and has locations across the U.S. and a presence in Shanghai, China.

The deal comes closely on the heels of Special Counsel's recent expansion into London, and will assist the company as it begins to grow its international network

Following the acquisition, D4 founder and CEO John Holland will continue serving in his current position. D4 will also retain its brand and headquarters.

7. TriCore Solutions

Company acquired: Database Specialists

Head count: 50-200 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 5

Boston-based application management company TriCore Solutions bought Oracle database systems support company Database Specialists, enhancing its own ability to support enterprise applications and database systems.

San Francisco-based Database brought a complete suite of enterprise-level services to the deal, including architecture, design, database tuning, performance management and 24/7 technical support.

TriCore said the acquisition has strengthened its support of other mission-critical enterprise applications that run on Oracle database systems, reinforcing its position as a reliable, single-source service provider to its customers.

6. Netsurion

Merger partner: Event Tracker

Head count: 50-200 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 13

Managed security service providers Netsurion and EventTracker merged, creating a combined company that will offer a broad suite of cybersecurity solutions for multilocation, highly distributed networks and security incident and event management (SIEM) solutions.

Under the terms of the agreement, Providence Strategic Growth (PSG), the equity affiliate of Providence Equity Partners and majority shareholder of Columbia, Md.-based Netsurion, has made an investment aimed at accelerating the growth of the combined company.

Fort Lauderdale, Fla.-based Netsurion and EventTracker will continue to operate as distinct brands and deliver their products and services in the same manner they have historically. Kevin Watson, CEO of Netsurion, will serve as CEO of the parent organization, and A.N. Ananth, CEO of EventTracker, will continue in his current capacity.

5. Perficient

Company acquired: Bluetube

Head count: 60 employees

Annual revenue: $7 million

Purchase price: Not disclosed

Date of announcement: Oct. 13

Perficient purchased a digital consultancy that works with The Home Depot, the New York Philharmonic and Turner Broadcasting.

St. Louis-based Perficient, No. 61 on the 2016 CRN Solution Provider 500, said its acquisition of Atlanta-based Bluetube will boost its expertise around enterprise mobile applications, creative services, marketing and strategy.

Bluetube will strengthen Perficient's Microsoft-oriented offering by deepening its practice around Sitecore -- a web content management and multichannel marketing automation software -- and introducing an Elite-level partnership around Xamarin, which developers can use to write native apps and share code across multiple platforms. Bluetube is one of just 10 Elite Xamarin partners globally.

4. Berkshire Partners

Company acquired: Masergy

Head count: 201-500 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 24

Private equity firm Berkshire Partners of Boston acquired a majority stake in managed services provider Masergy Communications.

Under the new ownership, Plano, Texas-based Masergy said it will be able to make more technology-related investments and reach more customers with its next-generation, hybrid networking solutions. ABRY Partners, a private equity firm, bought Masergy in 2011 and still holds a stake in the company.

Masergy offers cloud communications and software-defined networking services to business customers in more than 75 countries. The company currently has about 135 distinct channel partners, including VARs, systems integrators and master agents.

3. Zones

Company acquired: nfrastructure

Head count: 300 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Oct. 21

Auburn, Wash.-based solution provider Zones bought Clifton Park, N.Y.-based managed services provider nfrastructure to help clients manage their IT infrastructures as the complexity of enterprise networks continues to increase due to the increase in mobile devices and connected endpoints.

With this acquisition, Zones, No. 31 on the 2016 CRN Solution Provider 500, is utilizing nfrastructure's strong technical and managed services background to assist large-enterprise clients, focusing specifically on those with multilocation, branch and campus infrastructures.

Nfrastructure, No. 188 on the 2016 CRN Solution Provider 500, is now a wholly owned subsidy of Zones, which took on all 300 nfrastructure employees following the close of the deal.

2. Cognizant

Company acquired: Frontica Business Solutions

Head count: 1,000 employees

Annual revenue: Not disclosed

Purchase price: $128 million

Date of announcement: Oct. 3

Teaneck, N.J.-based Cognizant entered into an agreement with Norwegian oil services investment company Akastor to purchase the information technology outsourcing and business process outsourcing segments of the Frontica Group.

The deal excludes Oslo, Norway-based Frontica's staffing business, Frontica Advantage. The acquisition is expected to help Cognizant, No. 7 on the 2016 CRN Solution Provider 500, expand its business into new segments and geographies.

Frontica has transformed its business to become a broad commercial provider of ITO and BPO services within the oil and gas industry. The company has expanded its business pipeline significant this year by entering into long-term agreements with key clients that list until 2021.

1. Wipro

Company acquired: Appirio

Head count: 1,250 employees

Annual revenue: $196 million

Purchase price: $500 million

Date of announcement: Oct. 20

Business process services goliath Wipro plans to purchase cloud services powerhouse Appirio to improve its market share and position around Salesforce and Workday.

The company, No. 21 on the 2013 CRN Solution Provider 500, said acquiring Indianapolis-based Appirio will create one of the world's largest cloud transformation companies, making the combined firm the partner of choice for clients looking to modernize their processes and platforms on next-generation cloud applications.

Wipro said its existing Salesforce and Workday cloud applications practices will be consolidated under the Indianapolis-based company's brand and structure.