Spectrotel Acquired by Grain Management, Eyes Mobility Expansion
Spectrotel will speed up the expansion of its mobile device management (MDM) services as a result of the deal.
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CF: What are some of the areas where this investment is going to change what Spectrotel looks like?
RA: You can expect our product development cycles to accelerate. We had a really great track record of expanding our product set but doing so in a very steady pace. We now have a partner who wants to accelerate our growth and the pace at which we’re entering new products and services.
Our plan is to enter mobility and mobile device management this year. We’re going to have the right technology set and resources to launch us into those new products. We made a strategic acquisition last year for a company called Matrix that does provide MDM services for a few large enterprise clients. That will set the foundation for a larger product launch to the channel and our entire customer base.
We’re also going to expand and invest into managed services. We’re looking at technology that will improve customer experiences, reporting and visibility into the network. We’re going to invest in engineering; people are the most important asset in managed services.
CF: When I hear “managed services,” I think network operations center. What does it mean for Spectrotel?
RA: Managed services to us means endpoint management. Managing devices at the edge and some infrastructure in the cloud. Today we’re managing firewalls, SD-WAN boxes, access points, routers and switches. We also have a cloud gateway powered by Equinix, and Fortinet for our SD-WAN product set. We’re going to be expanding our product set in our cloud gateways, and also for the scope of services that we’re providing at the edge.
CF: What is the customer demand for mobility services, particularly MDM?
RA: CIOs often ask themselves, how can I improve my quality of service? How can I reduce operating expenses and really get some of these mundane tasks and responsibilities off my plate? They want to focus on running their own businesses, focus on security and pure IT services. Mobile device management is an area where we bring a lot of value, where we can consolidate services into one help desk, if you will, where we’re supporting the devices, the kitting, inventory management and cost control. It’s easy for them to forklift that off to experts like Spectrotel, enabling them to focus on more core IT items.
CF: How did you get to know Grain Management?
RA: Historically we just put our head down and worked, growing the business brick by brick, and not paying attention to M&A. We established a relationship with Citizens Bank, which advised us on this transaction. They introduced us to a series of strategic partners, and also private equity firms. We subsequently selected Grain because they clearly stood out from the rest of the pack. They’re a PE firm, but they specialize in telecom. They own a lot of fiber/infrastructure companies such Ritter Communications, Great Plains Communications, Summit Broadband, etc. They bring a lot of experience and knowledge to the table. They just were so impressive, so smart, going through due diligence, they clearly separated themselves from others, and this is the best possible outcome for Spectrotel and our associates.
CF: Were you able to look at other members of the Grain portfolio and kind of visualize like how this investment could shape Spectrotel?
RA: We did have an opportunity to speak with some of their other portfolio companies, and they all spoke about the alignment with Grain, the tech system that it creates. Spectrotel is one of their first investments outside of infrastructure. This is a little unique because we are a next generation aggregator. We have a great opportunity to build a global platform for MSP and broadband aggregation.
CF: What is the current state of aggregation, and how does this investment tie into the opportunities you see?
RA: I think that everyone is trying to be an aggregator today. All the large cable MSOs and telephone companies are trying to aggregate, and what everyone realizes is, it’s really hard to do. A lot of people outsource it. Spectrotel exhibits 25 years of experience in aggregation and we have superior technology, operational expertise, and simply outperform a lot of the new entrants in the market. Software-defined networking was really built for aggregators like Spectrotel. We’re not tied to the ball and chain of the network and can truly bring diversity of all access types based on a customer’s bandwidth, geography and pricing requirements.
Channel Futures: Are there any lessons you learned from working with [former CEO] Jack [Dayan]?
Spectrotel’s Ross Artale: I learned so much from working with Jack over the last 15 years. He had such a high expectations for great service and aways doing the right thing by our customers, partners and suppliers, and that will endure in the fabric of Spectrotel. Jack often talked about how the very best thing he could do as a manager was to make himself dispensable. He was very proud to have achieved that by building such an amazing management team. We will continue to build a culture and a business that is running like clockwork and is not dependent upon any one individual.
CF: What do you want to say directly to the partners reading this article? How will the acquisition impact them?
RA: It’s very exciting to be a partner interacting with Spectrotel! There will be more investment into our products, services, technology and support. They will continue to receive best-in-class service and support from Spectrotel and will have some additional tools in the bag to bring more value to our mutual customers.
CF: Is there anything else you want to talk about?
The partnership with Grain is really going to enable us to accelerate growth, to open up new sales channels, to open up new verticals of our product set. I think it’s a perfect outcome for all of Spectrotel’s employees. Sometimes when you hear about an acquisition, that creates some fear and uncertainty. This is a case where we have telecom bankers that want to invest into our business, so this is exciting. It’s going to enable growth and opportunity for our customers, our partners, our associates. We’re just really excited about Spectrotel 2.0.
CF: What do you want to say directly to the partners reading this article? How will the acquisition impact them?
RA: It’s very exciting to be a partner interacting with Spectrotel! There will be more investment into our products, services, technology and support. They will continue to receive best-in-class service and support from Spectrotel and will have some additional tools in the bag to bring more value to our mutual customers.
CF: Is there anything else you want to talk about?
The partnership with Grain is really going to enable us to accelerate growth, to open up new sales channels, to open up new verticals of our product set. I think it’s a perfect outcome for all of Spectrotel’s employees. Sometimes when you hear about an acquisition, that creates some fear and uncertainty. This is a case where we have telecom bankers that want to invest into our business, so this is exciting. It’s going to enable growth and opportunity for our customers, our partners, our associates. We’re just really excited about Spectrotel 2.0.
Private equity investment firm Grain Management has wrapped its acquisition of Spectrotel in a deal that helps the network aggregator significantly scale its managed services.
The parties announced the deal on Thursday. The acquisition brings together a broadband-focused investment firm with one of the channel’s most established carrier aggregators and technology services providers. They did not disclose the financial terms of the transaction.
Spectrotel will bring to market a mobile device management offering as a result of the acquisition. The company had already entered the MDM space with the 2021 acquisition of Matrix, but the new funding from Grain allows Spectrotel to more quickly expand MDM to all of its customers.
Grain Management is a 16-year-old private equity company that focuses solely on broadband providers. Its portfolio companies include California-based optical network integrator LightRiver, Brazilian fiber provider Alares and Arkansas-based service provider Ritter Communications.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup. |
The Spectrotel acquisition marks one of Grain’s first deals outside of infrastructure. New Jersey-based Spectrotel, founded in 1996, serves midmarket and enterprise customers.
Grain Management’s Jenny Kashdan
“Grain is a significant investor around the broadband and managed services sector, and we could not be more excited to be taking this step with the Spectrotel team,” said Grain managing director Jenny Kashdan said. “We deeply admire the value Spectrotel brings to the marketplace and the exceptional reputation they have built with their customers and partners, and we look forward to supporting their continued growth as a leader in their space.”
Acquisition Details
Citizens Capital Markets provided exclusive financial advisory services to Spectrotel. In addition, Wachtel Missry LLP provided legal counsel to Spectrotel, while Alston & Bird LLP provided legal counsel to Grain.
Spectrotel’s Ross Artale
Spectrotel founder and CEO Jack Dayan has stepped down from the CEO position; he will keep a minority stake in the company. In the meantime, former chief operating officer Ross Artale will step into the chief executive role. Artale joined Spectrotel in 2007 and has earned numerous accolades, including recognition as one of Channel Futures’ 20 Networking and Connectivity Channel Leaders of 2022.
Artale sat down with Channel Futures for an interview. He articulates his vision for Spectrotel and his thoughts on the aggregation space in the eight slides above.
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