ScanSource to Acquire Intelisys in Bold Move

Lynn Haber**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in May-June 2016.**

With the impending acquisition of business telecommunications and cloud services distributor Intelisys Communications, announced Monday, by technology products and solutions distributor ScanSource, both companies and their channel partners have the opportunity to grow and enhance their recurring revenue businesses like never before.

This marriage between compute and connectivity distributors has been a long time coming with competition and crossover among the partner firms in the trenches, i.e. VARs, system integrators, MSPs, telecom agents, etc., building up over the past few years — a natural evolution as cloud and mobility take hold.

ScanSource's Mike BaurScanSource and Intelisys are not exactly strangers – having an arms length relationship since 2013 – given that ScanSource has been a distributor of communication business solutions, i.e. IP phones, phone systems and mobile devices, from vendors such as Polycom, Avaya, ShoreTel, for years.

“Even back then, a big piece that was missing for us in our solution set was the opportunity to sell cloud and carrier services,” said Mike Baur, ScanSource CEO.

The mutual attraction between the two distributors took hold, with the question of how to get the ScanSource telecom VARs into the services business. Fast forward to 2015: Baur’s interest in moving beyond just a partnership with companies like Intelisys escalated and ScanSource’s strategy was to accelerate what it believed was the right solution set for its partners — which meant some type of services.

“We came up with this idea at the beginning of the calendar year and the rest is history,” Baur said.

The ScanSource agreement to acquire Intelisys in an all-cash deal of approximately $83.5 million plus earn-out payments is scheduled to close by Sept. 30.

Industry sentiment about the deal is positive.

“When you have an industry-leading and publicly traded equipment VAR [ScanSource] acquire one of the most successful master agencies [Intelisys] in the business, it’s certainly a great illustration of the overall strength of our channel,” said Randy Friedberg, vice president of business development at Converged Network Services Group.

Vince Bradley, CEO of WTG, sees it as a huge win. “It’s a sign of where things are shifting with telecom and IT and it’s a great thing for everyone and very exciting,” he told us.

Paul Cronin, SVP at Atrion, and a Channel Partners Advisory Board member, calls it “a great move for Scansource.”

“I think the acquisition is a very strategic play,” he said. “ScanSource is behind other distributors who provide more cloud solutions. Telecom and IT are coming together and one-source ordering makes a lot of sense. … I think Intelisys partners will have more to offer to their clients and will see the benefits; however, …

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