Avant, PlanetOne Execs Detail Merger, 'Billion-Dollar Company' Ambitions
"There are very few value-added plays I've seen in this space," Avant's CEO told Channel Futures.
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Channel Futures: Tell us about the history of your relationship.
Avant’s Ian Kieninger: Ted and I have known each other for probably 15 years. We’ve known each other through the Agent Alliance. We’ve been on many vendor boards together. We’ve developed a long tenure of mutual respect. We’ve always discussed, “How do you change the paradigm in this industry, and how do you grow it?” So we’ve been having really great dialogue, and our interests have always been the same: how to build and how to win and how to increase the entire share of the channel. So we’ve always had a friendship.
CF: How did the conversation around this deal emerge and develop?
PlanetOne’s Ted Schuman: I would say with a common goal and desire to, frankly, “dominate” the channel. Taking the best of what each organization brings to the table and combining with the partner in mind, [to ask], “How do our strengths, our assets, our resources and leadership improve the partner experience and allow them to scale and build their business faster and more profitably.” And this is truly a hand-in-glove. This is one of those examples where everybody loves to quote, “1+1=3”. We’re dropping a nuke. This isn’t 1+1=3; this is 1+1=10. Today, the channel has changed. We just created a new monster in the channel. It’s a category of one. And we are throwing our stake in the sand as a market leader. And we’re very excited with the combination of the assets, resources and the plans we have on tap for partners and our providers. It’s very exciting times.
Kieninger: When you look at Avant being one of the youngest technology service distributors and PlanetOne being one of the originals, if not the original, it’s really cool to see 30 years of institutional knowledge and success combined with one of the younger firms to create a really special organization, which can cover anything from the front end of pre-sales support to the backend of project management.
There are zero gaps here. This is undeniably the most valuable organization to work with, because of the amount of value we offer from soup to nuts. There are no gaps in the strategy. There are no gaps in the value chain. It is soup-to-nuts probably the most thorough value proposition I’ve seen out there, put together in one company.
CF: What are some of the differences and similarities between the companies? For example, PlanetOne has a more select line card of suppliers, while both companies tout their software platforms.
Schuman: I have sat in the backseat in admiration, watching what Ian and his leadership team have done at Avant in building undoubtedly the most powerful selling machine and front office in the industry. Where you layer on our greatest skills and assets is hard lean-in with kind of a combination of old school meets new school. We bring in very heavy partner engagement relationships. We really have tried to cater a white-glove concierge experience and aligning with our partners to give them the tools or resources to build their business faster. And we both have enterprise-grade platforms that offer very different experiences. You look at Pathfinder and what they’ve done with that terrific tool on the front end. It is an invaluable tool and resource for partners to help them put deals through the sales process and get them in the end zone and win. And now we’re going to couple that and link it to Sentient, which is arguably the industry’s first CRM. This is powerful. This hasn’t been done before. The game changed today.
Kieninger: When combining the Pathfinder technology approach and Sentient, we will end up having the most disruptive technology strategy in the business that no one’s ever put together. And if you look at PlanetOne’s history, to be successful for 30 years, there are a lot of a lot of providers you need to be successful with. And to be successful in 12 years, we’ve been more progressive with cloud-based. They’ve had a ton of success on the traditional wireline. But in the last two years, we both aligned on things like cloud, security and contact center, which we think is the future. So the interests and strategies have aligned recently, but when you’ve couple the two, it’s really a hand-in-glove approach like Ted mentioned earlier. There’s very little overlap. There’s very little overlap on the vendor side; there’s very little overlap on the trusted adviser side. It is such a mutual, successful relationship coming together. It’s the only one of its kind, in my belief, in this industry.
But the other part of your question was the people part. The cultures are going to be a match made in heaven. We’re family-oriented. PlanetOne has a 30-year history of an incredible family-oriented approach. It is all about work hard, play hard. It’s all about positive energy. It’s all about embracing the employees first to take care of them. Both companies have very little turnover, because people want to be part of those organizations. And I think these cultures are going to come together perfectly, which is a rare case in most mergers or acquisitions. We’re really taking a lot of pride in that, and we were very careful in that thought process as we talked about coming together.
Schuman: The M&A landscape has been turbulent and fast-and-furious for the last 36 months. Every time I read a press release like this, the first question I always ask myself is, “How do the partners benefit?” And I think while we’re talking about the assets and the strengths of our own organizations, it’s with one topic in mind: How did our partners benefit? If there’s one thing that’s the most exciting today, it’s that with the combined assets and resources and cultures that we’re bringing together, hands-down, the biggest winner today was our partner community around the country between Avant and PlanetOne.
We are delivering tools and resources that we didn’t have available at PlanetOne that are going to be coming through the Avant family. And we are now bringing to market the best-in-class back office and white-glove experience that I think the Avant partners will truly embrace and appreciate. And I’m not saying this to be sappy or disingenuous or pander to the audience in any way, shape or form, but hands down, the biggest winners were all of our partners and employees.
CF: Let’s talk about partner bases. Ian, you said there was not much overlap. Talk about the relationships you’ve had with those agencies, who are now going to be embracing a new partner.
Keininger: I think from both perspectives, the partners are getting a plus-one value-add. Meaning, they’re getting more than they got yesterday. We have top partners who are continuing to push us to provide more post-sales support and continue to improve the commission experience. And we have a lot of plans in place and budget approved to go do those things. PlanetOne solves for that overnight. They have the best back office. They’re about to launch a commissioning system, which is going to disrupt the entire industry, which was needed like 10 years ago. So our partners are really excited for the value we’re bringing to them.
And PlanetOne’s partners are gonna get a splash of energy and a big value-add they’ve never experienced before either. It’s going to be really fun to get in front of both sets of partners and talk about how we can help them win. And to Ted’s point, they’re going to win big time with this. Because with scale and volume, we create strengths for the partner community. We can bring better technologies to market. We can secure stronger contracts with the vendors, and we can invest deeper than we ever have to create value that helps the trusted adviser scale and grow. And that’s what’s most important.
CF: I want to go back to the the software piece, talking about Pathfinder and Sentient. What will the integration between those applications look like? Will they ultimately merge onto the same platform?
Kieninger: We’re going to have to sit and think about how an integration works and what that timeline looks like. But what I do know is, both teams have incredibly talented people putting these technologies together and building them. The Pathfinder tech team is going to be really excited to have the PlanetOne tech team join them. From a development perspective, I think together we’re going to create an even more disruptive approach than we ever have. We’re clearly going to create a timeline on integration and see how that all comes together and how we brand it. But what I do know is that the approaches are slightly different in the sense that they’re going to be additive. Sentient did not copy Pathfinder. It’s built on its own strategy and its own accord, and it’s going to snap in nicely, and vice versa. We do know that it’s leaps and bounds ahead of everyone else. It’s going to be really hard to catch up with that, because now we’ve jumped forward light years in a single day.
CF: Ted, what is this change is going to look like for you? You always told me that you never say never to a deal. Were there any conversations with the folks at Pamlico that were reassuring to you?
Schuman: I actually addressed this in my remarks to our employees. I’ve turned down multiple offers. I get approached almost daily and have been for the last three or four years. It’s just the nature of the world we live in. The private equity community has descended on our channel, validating what we’ve known for years. We have something very special here; it only gets stronger month over month. But for me, I never had found the right fit culturally, for employees and for partners, that really lined up well. In most of these announcements that I read, it’s very self-serving. It’s very much “about me,” but it’s never about the partner. I was focused on what I could do to create a transaction and opportunity that would accelerate both the lives personally, professionally of my employees, as well as partners. And we accomplished that with the merger with Avant. It is a very exciting time. We line up very well. [PlanetOne president Chris] Werpy has been saying behind the scenes, “We want to drop a nuke in the industry.” It got dropped about three hours ago.
CF: Looking into the future of the technology advisory channel M&A, how’s this all going to shake out?
Kieninger: There’s going to be continued M&A. There will be continued consolidation. But what we see is that this play added value. This was not about stacking EBITDAs. It’s not about rollups or stripping out costs. This is about enhancing the customer experience. And what Ted and I think about every day is that the end user needs to really get value out of the experience with their trusted adviser. So how can we offer value to the trusted adviser to help them win and take care of the end customer? While there might be a lot of financial plays happening, there are very few value-added plays I’ve seen in this space. This is a value-add play. It’s great for the end user, it’s great for the trusted adviser, and ultimately and most importantly, it’s great for the people. And I’m really happy that Ted is going to trust Avant to work with his people. He had every choice in the business. It’s a family over here. We’re going to bring him into our family, and together we’re going to get stronger. We’re going to take care of everyone, and that’s what business is all about.
Kieninger: We have two slogans we’re running with. One is “creating a category of one.” We think we can build something so special that there is no competition, that we can stand alone offering a unique value in this channel no one’s ever had. And we are in a race to become the first billion-dollar company in this space. We think this industry has plenty of room to grow. And it’s not how long it’s going take; it’s how fast it’s going to take. And with PlanetOne attached to us, we’re going move faster than we ever thought before. It’s really a positive thing for for everyone who’s participating in this industry. We’re excited to take the lead on it.
Kieninger: We have two slogans we’re running with. One is “creating a category of one.” We think we can build something so special that there is no competition, that we can stand alone offering a unique value in this channel no one’s ever had. And we are in a race to become the first billion-dollar company in this space. We think this industry has plenty of room to grow. And it’s not how long it’s going take; it’s how fast it’s going to take. And with PlanetOne attached to us, we’re going move faster than we ever thought before. It’s really a positive thing for for everyone who’s participating in this industry. We’re excited to take the lead on it.
Avant and PlanetOne executives say the merger of their companies taps into complementary skill sets and platforms.
Chicago-based Avant on Wednesday publicized its acquisition of Scottsdale, Arizona-based PlanetOne. The deal marks one of the last independently held TSBs to agree to an acquisition or private equity investment. X4 Solutions, Intelisys, WTG, Telegration, MicroCorp, CNSG, Telarus, Bridgepointe have all agreed to deals in the last five years, with activity ramping up in the last year. Avant is leveraging funds from Pamlico Capital to buy PlanetOne.
The merger expands the presence of Avant in the western U.S. Executives say PlanetOne brings more project-management and back-office resources to the fold. Avant CEO Ian Kieninger and newly minted Avant customer experience officer Ted Schuman said the Avant and PlanetOne’s respective Pathfinder and Sentient platforms complement each other.
Most partners have offered a largely favorable response to the transaction.
Schuman and Kieninger sat down virtually with Channel Futures for an interview about the acquisition and the future they envision for the combined company.
See our 11 slides above for their comments.
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