10 Massive M&A Deals Reshaping The Channel: February 2016

Security Is All The Rage

Partners with security-oriented practices were a hot commodity in February, with three of the 10 companies acquired specializing in either network or cybersecurity.

Microsoft-specific and managed services capabilities were also in high demand, with two of the acquired solution providers specializing in each.

Three of the purchased companies are based on the West Coast, three are in the South, two are in the Northeast and two are based abroad. Overall, the companies purchased last month employ a combined 28,600 people.

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

10. Aldridge

Company acquired: PacketDrivers

Headcount: 11-50 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 9

Summary: IT management, consulting and outsourcing company Aldridge bought SMB managed service provider PacketDrivers last month.

According to a press release from Houston-based Aldridge, a member of the CRN Managed Service Provider 500, the company made the acquisition to position itself in Seattle, what it sees as "one of America's technology hubs" thanks to its close proximity to Redmond, Wash.-based Microsoft.

Aldridge appointed PacketDrivers founder Scott Hamlin to the position of vice president and general manager and tasked him with leading the company’s Seattle operation. Aldridge will be keeping most of PacketDrivers’ current employees, boosting its total to nearly 130 IT professionals.

9. Logicnow

Company acquired: iScan Online

Head count: 12 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 26

Summary: Durham, N.C.-based cloud-based IT service management vendor Logicnow acquired Plano, Texas-based network and security provider iScan Online to gain ownership of the company's online analytics tool.

The tool – which Logicnow aims to integrate into its Max Remote Management product suite – allows IT professionals to quickly and easily conduct regular automated risk assessments within an IT environment.

Because of this addition, Logicnow customers can now calculate the real-time risk of a data breach and assign a dollar value to it, helping to prioritize threat mitigation strategies based directly on business costs.

8. SHI

Company acquired: Eastridge

Head count: 18 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 24

Summary: SHI International turbo-charged its fast-growing Microsoft practice by purchasing Winston-Salem, N.C.-based Eastridge, a boutique partner focused on streamlining volume licensing deployments.

The Somerset, N.J.-based company, No. 12 on the 2015 CRN Solution Provider 500, said the acquisition of Eastridge’s professional services arm will enable SHI to provide more support around technologies such as SharePoint, Office 365 and Azure.

Eastridge was founded in 1998 and works with businesses of 250 to 10,000 employees. Eastridge’s offerings will eventually be rebranded under the SHI moniker and its employees will be aligned with SHI’s existing field sales force.

7. Avalon

Merger partner: Digits

Head count: 11-50 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 9

Summary: After working together in the cybersecurity space for several years, Buffalo, N.Y.-based companies Digits and Avalon Document Services have formalized their working relationship with a merger.

Avalon, an eDiscovery, managed services and traditional litigation support services provider, has added digital forensics and cybersecurity capabilities with this merger. The companies will condense offices in Rochester, N.Y., and Cleveland, and merge headquarters into Avalon's Buffalo, N.Y., office.

Following the merger, the combined company will employ 120, making it one of the largest eDiscovery providers in the U.S.

6. Aldridge

Company acquired: Arterian

Headcount: 11-50 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 9

Summary: Houston-based Aldridge acquired Arterian, a fellow member of the CRN Managed Service Provider 500.

According to a press release from Aldridge, the company acquired Seattle-based Arterian to establish a "solid and strategic presence in one of America's technology hubs."

Aldridge said that it will be keeping the Arterian brand and has established a subsidiary devoted to Microsoft's Cloud Solution Provider program under the name. Arterian founder Jamison West will be appointed president of that subsidiary, which will be located at Arterian's former headquarters.

5. CareWorx

Merger partner: TUC Managed IT Solutions

Head count: 51-200 employees

Annual sales: $27 million

Purchase price: Not disclosed

Date of deal: Feb. 8

Summary: Ottawa, Ontario-based solution provider TUC Managed IT Solutions and Orangeville, Ontario-based CareWorx merged under the CareWorx brand in anticipation of large demand for senior citizens’ health-care needs.

CareWorx provides point-of-care IT solutions specifically for the senior care market. TUC, No. 425 on the 2015 CRN SP 500, is looking to strengthen that offering by linking it to the company’s broader managed service solutions currently provided to SMB customers.

The companies said they believe this is the right time to build up the offering because of the increasing number of senior citizens expected as the Baby Boomer generation ages.

4. Capgemini

Company acquired: Fahrenheit 212

Head count: 70 employees

Annual sales: Not disclosed

Purchase price: Not disclosed

Date of announcement: Feb. 18

Summary: Capgemini bought Fahrenheit 212, a New York-based company with experience in boosting the digital brand of corporate giants like The Coca-Cola Company, Marriott and Citi.

The Paris-based company, No. 5 on the 2014 CRN SP 500, said the acquisition will help Capgemini shift from traditional linear consulting to an approach focused on fusing innovation into all business processes.

Fahrenheit 212 has fused design and development skills with a traditional management consultancy to help clients identify which existing assets to leverage and design a brand strategy for the new market.

3. Synoptek

Entity acquired: EarthLink’s IT services business

Head count: 210 employees

Annual sales: $37 million

Purchase price: $29 million

Date of announcement: Feb. 1

Summary: Synoptek doubled its workforce, quadrupled its customer base and became a truly national managed services player by purchasing EarthLink’s IT services business.

The Irvine, Calif.-based company said acquiring a business unit of Atlanta-based EarthLink, No. 31 on the 2015 CRN SP 500, will provide the MSP with the necessary data center infrastructure to support customers from coast to coast. EarthLink’s IT business differentiates itself through its expertise in virtual desktop infrastructure, according to Synoptek executives.

EarthLink’s operations were immediately rebranded as Synoptek Elevate and will be run as a separate division for 12 to 18 months.

2. Ingram Micro

Entity acquired: RRC Group’s CEE Division

Head count: A couple of hundred employees

Annual sales: $250 million

Purchase price: Not disclosed

Date of announcement: Feb. 12

Summary: Ingram Micro strengthened its European presence by purchasing a geographic unit of a value-added distributor with expertise in Cisco Systems, IBM, EMC, Zebra and Avaya Technologies.

The Irvine, Calif.-based distributor said its acquisition of the Central and Eastern European (CEE) division of Moscow-based RRC Group will bolster its regional capabilities around networking, security and IT infrastructure. The division also brings robust service capabilities around logistics, education and technical and marketing support.

Specifically, the deal should enable Ingram Micro to extend more higher-value capabilities into countries such as Poland. Five days after the acquisition was disclosed, Ingram Micro said that the distributor itself was being acquired (see next slide).

1. Tianjin Tianhai

Company acquired: Ingram Micro

Head count: 27,700 employees

Annual sales: $43 billion

Purchase price: $6 billion

Date of announcement: Feb. 17

Summary: Chinese conglomerate Tianjin Tianhai will acquire Ingram Micro, the world’s largest distributor, and fold it into logistics affiliate HNA Group of Hainan, China.

The deal will provide the Irvine, Calif.-based distributor with a broader geographic reach and more capital for mergers and acquisitions.

Ingram Micro will retain its name, brand, headquarters and management team following the merger, with the exception of company president Paul Read, who stepped down. HNA Group does not plan to close any Ingram Micro offices, facilities or warehouses, and very few, if any, layoffs are expected as part of the transaction.