10 Massive M&A Deals Reshaping the Channel: November 2016

The Value of Knowing Vendors

Vendor expertise was the subject of several acquisitive solution providers last month, with five of the 10 acquisition targets specializing in suppliers ranging from Cisco, Microsoft, and Xerox to ServiceNow and SugarCRM.

Cloud expertise was also a priority, as four of the acquired firms possessing a dedicated cloud practice. Eight of the acquiring companies were in the 2016 CRN Solution Provider 500 rankings, and five of those firms were in the top 100.

The acquisitions are ordered on the following slides based on the total number of employees at the acquired companies:

10. Repro Products

Target company: 4ColorLaser

Headcount: 1-10 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 16

Repro Products has acquired Xerox authorized dealer 4ColorLaser to expand the bandwidth of both companies' service departments substantially.

Smyrna, Ga.-based Repro said its purchase of Roswell, Ga.-based 4ColorLaser will allow both companies to better serve the office equipment needs of businesses throughout metro Atlanta by combining the strength of the two well-respected Xerox resellers.

4ColorLaser will now be identified as a Repro Products company and will continue to operate will existing staff in its present location. Repro is also a leading provider of wide-format equipment, printing services, Autodesk software and 3D laser scanning services.

9. NWN

Target company: Collabramind

Headcount: 10 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 8

VoIP and unified communications provider NWN have purchased Cisco contact center specialist Collabramind to acquire the engineering talent needed to provide a more robust cloud-based contact center service for enterprise customers.

Waltham, Mass.-based NWN, No. 68 on the CRN SP 500, said its acquisition of Richardson, Texas-based Collabramind would allow the company to compete more effectively against the telcos by providing the talent necessary to connect the contact center to the customer database.

NWN said contact center database expertise would be critical as customers develop digital strategies to build tight links to their customers via a cloud-based unified communications platform.

8. FayeBSG

Target company: Atcore Systems

Headcount: 11-50 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 3

Leading SugarCRM partner FayeBSG bought Atlanta-based Atcore Systems to extend its reach and presence in the southeastern United States as part of a broader growth strategy.

The Atcore practice will become the new Atlanta office for Woodland Hills, Calif.-based FayeBSG, which already has a footprint in Philadelphia, Austin and Los Angeles.

FayeBSG concentrates on high-value CRM, ERP and marketing automation development and consulting services, and has built SugarCRM integrations with ERP software, credit card processing, project management and phone systems. The company has more than 650 global partners.

7. Accenture

Target company: Nashco

Headcount: 25 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 10

Accenture ramped up its ServiceNow capabilities in North America in respond to growing acceptance of the "as-a-service" model by scooping up Cochrane, Alberta-based Nashco.

Nashco was tucked into the global ServiceNow practice of Dublin, Ireland-based Accenture, No. 2 on the CRN SP 500, which already had 800 certified professionals and 1,500 practitioners dedicated to the ServiceNow platform.

Nashco was founded in 1993 and been exclusively focused on ServiceNow's IT service management suite since 2008. That focus has allowed Nascho to becoming the leading ServiceNow partner in Canada, Accenture said.

6. Franklin Data Systems

Target company: Scarab Consulting

Headcount: 51-200 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 1

Franklin Data purchased Scarab Consulting to gain access to its data hosting environment, infrastructure, processing and analytics capabilities.

Newport Beach, Calif.-based Franklin Data said it plans to expand and integrate Austin, Texas-based Scarab's proprietary discovery-related services delivery technology to improve workflows and provide around-the-clock access. Scarab serves corporate, enterprise and legal customers.

Franklin also said it plans to integrate Scarab's ready-to-launch cybersecurity brand into its offerings. The company said it plans to take over Scarab's Midtown New York offices and expand its Houston office to accommodate increased client operations.

5. Fusion

Target company: Apptix

Headcount: 51-200 employees

Annual revenue: $25 million

Purchase price: $28 million

Date of announcement: Nov. 15

Cloud services provider Fusion acquired Herndon, Va.-based Apptix to boost its proficiency around cloud-based communications, collaboration, virtual desktop, compliance, security and cloud computing.

New York-based Fusion said buying Apptix, No. 415 on the CRN SP 500, will extend the company's reach to the desktop and into the customer's IT infrastructure and expand the services Fusion can sell. The deal will also accelerate Fusion's leadership position in the fast-growing cloud computing market for both SMB and enterprise customers.

Apptix will bring engineering and development resources to advance Fusion's cloud computing infrastructure, as well as a team of sales, implementation and support professionals.

4. Contegix

Target company: Distributed Systems Services

Headcount: 150 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 29

Cloud computing and managed application hosting provider Contegix merged with managed service provider Distributed Systems Services (DSS) to better capture the growing opportunities in both on-premises and cloud-based hybrid environments.

The merger will marry St. Louis-based Contegix's cloud hosting and application capabilities with the reseller partnerships and managed services expertise of Reading, Penn.-based DSS, No. 416 on the CRN SP 500. The deal was financed through private equity firm Strattam Capital, which bought a majority stake in Contegix earlier in November.

The merged company will adopt the Contegix name. DSS Founder and CEO Jim Sweeney will join Contegix's board of directors.

3. CSC

Target company: eBECS

Headcount: 201-500 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 7

Systems integration giant CSC has taken a minority stake in eBECS Ltd., the 2016 Microsoft Partner of the Year for the United Kingdom.

As part of the investment, Chesterfield, U.K.-based eBECS will provide Microsoft Dynamics Business Solutions within the United Kingdom, Saudi Arabia, North America and other areas of Europe, the Middle East and Africa. eBECS will also be licensed as an exclusive delivery partner for CSC's global Microsoft practice.

Tysons, Va.-based CSC, No. 8 on the CRN SP 500, said the investment in eBECS would provide the local depth and global reach needed to service Microsoft-centric projects and the company's clients worldwide.

2. Cognizant

Target company: Mirabeau BV

Headcount: 260 employees

Annual revenue: Not disclosed

Purchase price: Not disclosed

Date of announcement: Nov. 29

Cognizant entered into a definitive agreement to acquire Mirabeau BV, a digital marketing agency that does business across Europe and specializes in travel, financial services, retail and business-to-business.

Teaneck, N.J.-based Cognizant, No. 7 on the CRN SP 500, said Amsterdam, Netherlands-based Mirabeau would become a part of the company's digital business practice. Cognizant said bringing Mirabeau on board will strengthen its ability to design, prototype and scale important product and service experiences.

The acquisition came just one day after activist shareholder Elliott Management called for Cognizant to shake up its board of directors and buy back $2.5 billion in shares. One of Elliott's main criticisms was that Cognizant has been slow in using its cash to strengthen its digital footprint.

1. Insight Enterprises

Target company: Datalink

Headcount: 570 employees

Annual revenue: $771 million

Purchase price: $258 million

Date of announcement: Nov. 7

Insight Enterprises agreed to buy Datalink, one of the channel's largest pure-play data center solution providers, in a bid to strengthen its data center offerings around hybrid cloud, converged and hyper-converged infrastructure.

Tempe, Ariz.-based Insight, No. 15 on the CRN SP 500, said it expects to receive $20 million in cost savings within two years of purchasing Eden Prairie, Minn.-based Datalink, No. 45 on the CRN SP 500, primarily around corporate efficiencies, duplicative functions and IT system integration.

The deal will close in the first quarter of 2017 and is expected to boost Insight's adjusted earnings per share in 2017 excluding $8 million in one-time transaction and integration expenses.