TekLinks Inc., one of the top managed services providers in the country, has considerably increased its recurring revenue cloud services footprint with the acquisition of fast-growing Claris Networks.
The deal provides Birmingham, Ala.-based TekLinks, No 176 on the CRN Service Provider 500 with $100 million in annual sales, with a cloud services superstar that was No. 138 on CRN's 2014 Fast Growth 150 list.
The Claris Total Cloud offering, a complete, outsourced cloud service, increases in one fell swoop TekLinks' recurring revenue services by a whopping 60 percent, from about $25 million to $40 million, said TekLinks CEO Jim Akerhielm.
"This is a tremendous strategic fit," said Akerhielm. "We acquire a company that has a very strong set of hosted managed services that are complementary to our current product set. It truly is a 'lift and shift.' They are taking an on-premises solution and moving it fully into the cloud, so there [are] clearly capex savings over the long term and there is always services improvement."
Terms of the deal for the 17-year-old Knoxville, Tenn.-based Claris -- which has about 100 employees serving small and midsize customers in its home state -- were not disclosed. Claris bills itself as the largest managed service provider in Tennessee.
Claris Networks CEO Larry Bodie and co-owner Dave Sagraves will maintain a partial ownership stake in TekLinks and take significant executive roles at TekLinks. Bodie will become senior vice president of Tennessee for TekLinks.
Claris brings a bevy of sales and services talent, along with a proven cloud managed services model that TekLinks can leverage to drive sales growth, said Akerhielm. "We certainly strengthened our technology, sales and support team considerably," he said. "Their managed services support model is outstanding."
The recurring revenue kick comes with that managed services piece of the TekLinks business growing at more than twice the rate of the company's professional services and hardware-software product business, said Akerhielm. "The recurring revenue piece is going to continue to grow quickly," he said. "That's because the market is going in that direction."
The deal also gives TekLinks -- the top regional Southeast managed services provider -- a foothold in the Nashville, Tenn., market. What's more, about 50 percent of the Claris business is in the health-care market, which complements TekLink's robust Healthcare Services Group.
TekLinks intends to extend the Claris Total Cloud offering into its broad Southeast market. Furthermore, the company said, TekLinks will make its enterprise professional services and IT product business available to Claris customers in Tennessee.