Consolidation in the telecom and IT industries has become the rule rather than the exception. It seems that everyone’s getting bigger and/or wants to offer more services.
How about these for mega-mergers, just from the first two months of 2016?: Verizon buying XO’s fiber business; Ingram Micro selling to a Chinese conglomerate; and EarthLink selling its IT services business.
Our one-stop slide show doesn’t include every merger and acquisition in telecom and IT from January and December, but it offers up some of the biggest from the past two months that will make waves in the channel going forward.
Looking for more M&A? Our breakdown from November and December, is here.
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This $1.8 billion deal, pending regulatory approval, won’t close until the first half of 2017. The transaction would provide Verizon with access to XO’s fiber-based IP and Ethernet networks. In addition, the acquired fiber facilities will help Verizon continue to densify its cell network. While Verizon and XO pursue regulatory approvals from governmental agencies, XO will continue to operate independently. Verizon also no doubt is looking ahead to the wireless network-capacity demands of the Internet of Things.
Ramifications for the channel? Read our full story here.
Synoptek is paying $29 million for EarthLink’s MSP business. The move affects some 1,700 EarthLink customers. Synoptek says the addition of this business will add significantly to its 400 services customers and 25 employees. EarthLink says the $38 million generated annually by the services group was a small part of overall sales. In its year-end guidance, EarthLink stated goals that included driving improved cash flow, narrowing its focus and working to “deleverage its balance sheet.”
Partners who want more info on this can get it here.
The Chinese aviation and shipping conglomerate is paying a whopping $6 billion for the tech distribution giant. After the deal closes, expected in the second half of 2016, Ingram Micro will operate as a subsidiary of Tianjin Tianhai, consolidated under HNA Group. Ingram is expected to remain headquartered in Irvine, California. Solution providers shouldn’t anticipate any significant changes, the distributor said. “The company is staying the course and accelerating its investment efforts to bring more value to its customers and partners, Ingram CEO Alain Monié told Channel Partners.
Click here to read more about this mammoth international deal.
ShoreTel wrapped its purchase of Corvisa, the cloud communications provider. “The close of this acquisition represents another milestone in the acceleration phase of our strategic plan,” said Don Joos, president and CEO of ShoreTel. “The addition of Corvisa’s standards-based APIs, SIP trunking and standalone contact center expands our cloud-based offering while providing new sources of hosted revenue.”
Read more about ShoreTel’s big buy here.
Master agent Telecom Brokers made its sixth acquisition in the past year with the purchase of assets and customer base from Ethertel Networks. California-based Telecom Brokers hails the move as part of a strategy to expand into the Southeast. Ethertel is in Nashville, Tennessee, and its branch office will “act as a linchpin” for southern expansion. It marks the first time that Telecom Brokers has converted a master agency into a company extension.
Read more about what Telecom Brokers plans to do with this acquisition here.
Jasper Technologies delivers a cloud-based IoT service platform for enterprises and service providers. Under the terms of the agreement, Cisco will pay $1.4 billion in cash, plus equity awards and retention-based incentives. Cisco said the proposed acquisition will allow it to offer a complete IoT “solution that is interoperable across devices and works with IoT service providers, application developers and an ecosystem of partners.” Cisco will continue to build on Jasper’s IoT platform and add new services such as enterprise Wi-Fi, security for connected devices, and advanced analytics to better manage device usage.
Click here for the full scoop on Cisco’s latest buy.
Netech is a top Cisco regional partner that primarily does business in several Midwestern states. With the purchase, Presidio, the Big Apple-based professional and managed services provider, gets a business that offers design, integration and optimization of data center and cloud, security, collaboration and enterprise networking services. Its customers come from a variety of industries that include government, education and health care. Netech has more than 430 employees and nearly 200 engineers who hold 1,200 technical certifications.
Click here for more on this merger.
BTI Systems is a provider of cloud, metro-networking systems and software, with North American headquarters in Ottawa and Boston. Juniper expects the acquisition will help it address the fast growing data-center interconnect and metro Ethernet market for packet and optical services. It combines Juniper’s switching and IP routing platforms with BTI’s cloud-connect optical platform. Juniper says partners selling BTI products shouldn’t expect the Silicon Valley giant to leave them behind. And for Juniper’s partners, there’s new opportunity.
More details about Juniper’s latest acquisition are here.
Transera is a provider of cloud-based contact center software for SMBs and large enterprises. BroadSoft said the acquisition positions it to “lead the fast-growing contact center-as-a-service (CCaaS) market.” Last fall, the company said it’s ready to challenge both Microsoft and Cisco in unified communications. Taher Behbehani, BroadSoft’s chief marketing officer, told Channel Partners the acquisition provides its partners more of a piece of a big pie. BroadSoft didn’t disclose financial details of the acquisition, other than it is expected to contribute about $7-8 million in revenue for 2016.
Read more about how BroadSoft plans to treat its Transera acquisition here.
One of the biggest M&A stories of Q1 is one that hasn’t happened … yet. Reuters reported in January that Verizon has started a process to sell its data-center assets as it focuses on its core business. The telco hopes to sell the assets for more than $2.5 billion, according to the report, citing anonymous sources. Citigroup is advising, the article said. The portfolio for sale includes 48 facilities. The move would mark a reversal of Verizon’s strategy to expand in hosting and colocation services after it bought data-center operator Terremark for $1.4 billion in 2011.
This is where to read more about the Verizon data-center sale talks.