Cisco VARs NWN, NetTeks Call Off Merger

Unveiled in June, the merger would have created a $50 million, New England-based solutions company, offering VoIP and managed services expertise and high-level badges from several vendors, including Cisco Gold, Microsoft Gold and Novell Platinum partner status.

"We couldn't come to terms on some of the contractual issues. We just couldn't agree on a couple of things," said Ethan Simmons, partner at NetTeks, Boston.

Simmons said the disagreement wasn't price-related, but he declined to provide more details on reasons for the merger's demise. "Everyone is disappointed that it didn't go through," he added.

Mont Phelps, president and CEO of NWN, Waltham, Mass., expressed similar sentiments. "We are disappointed. We like those guys [NetTeks]; it just didn't work," Phelps said, declining to give details on why the deal fell though.

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NWN, formed after Phelps' Netivity Solutions merged with Woods Network Services, Farmington, Conn., still plans to push a strategy that includes organic growth and potential acquisitions, Phelps said. Over the past year, the company grew 500 percent, he said.

"We're seeing high growth in our commercial business with Cisco, and we've greatly expanded our managed services capabilities and facilities. We're also going to look for strategically aligned businesses [for potential acquisition]," Phelps said. In particular, NWN will consider acquisitions of other Cisco-focused solution providers, he said.

As for NetTeks, the $10 million company will continue plans to build up its managed services capabilities and likely will consider acquisitions or securing outside funding to fuel its growth, Simmons said. NetTeks also plans to push itself to move up from its current Premier status within Cisco's partner program.

"We're not in a position to be Gold, but we are to be Silver," Simmons said. "[So] we will push ahead on our own."

Phelps said he expects NWN and NetTeks to engage in friendly "coopetition" going forward, continuing to collaborate with each other on some projects while competing on others.

"We'll continue to grow and pursue our agenda, and they will, too," he said.