The Year's 24 Biggest Mergers and Acquisitions in the Technology Channel
Buckle your seatbelts and grab your popcorn, kids. The channel as we know it is changing dramatically.
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Sangoma kicked off 2021 with the announcement of its $437 million acquisition of Star2Star.
The transaction helped vault Sangoma back into the conversation as a leading cloud communications provider. It built on Sangoma’s previous acquisitions of Asterisk PBX software provider Digium and CPaaS provider VoIP Innovations.
The deal, however, was just a taste of the musical chairs of UCaaS consolidation that would occur in 2021.
Check out Edward Gately’s coverage of the acquisition.
Citrix bought workplace management platform provider Wrike.
The $2.25 billion deal crossed the news wires in January. Adding Wrike helps Citrix better automate and simpify the experience of employees using Citrix Workspace. Citrix’s CEO also said Wrike will help Citrix customers move to the cloud faster.
Jeffrey Schwartz wrote about the acquisition.
Symphony Technology Group (STG) is merging together two prominent cybersecurity organizations.
McAfee in July announced the completed $4 billion sale of its enterprise business to the consortium. At around the same time FireEye (now known as Mandiant) sold its products business to STG for $1.2 billion.
In the meantime, McAfee accepted a $14 billion acquisition that will take it private.
Read about how the combined company is evolving its channel program.
MSP Corp Investments bought Canadian MSPs in 2021.
The group has been wielding more than $50 million in capitalization to attract MSP owners who want to sell their business. They can stay in the business or retire if they like. MSP Corp’s president said deals typically close within 90 days.
Check out Allison Francis’ story.
Tech Data and Synnex came together in a $7.2 billion deal with major repurcussions for the resale channel.
The mega merger created a behemoth competitor to Ingram Micro, bringing together the second and third largest technology distributors.
The deal finalized in September.
MSPs offered mixed responses, with some worried about losing choice and others excited about the growth of their distributor.
Check out Christine Horton’s coverage of the acquisition.
Speaking of distributor acquisitions, the biggest fish in the pond closed an acquisition of its own.
Platinum Equity’s $7.2 billion purchase of Ingram Micro closed in July. The move didn’t change Ingram’s CEO or headquarters.
“The company has built those businesses methodically through a combination of organic and acquisitive investment. We expect to accelerate those efforts and aim for an even higher growth trajectory,” Platinum Equity’s managing director said.
Check out Craig Galbraith’s coverage.
AT&T and Verizon both refocused on connectivity this year.
Early in May, Verizon announced that it was selling its Yahoo media division for $5 billion to Apollo Global Management. The transaction represents a loss when you consider that Verizon spent a combined $9.2 billion to acquire Yahoo and AOL.
AT&T two weeks later announced that it would sell its WarnerMedia division to Discovery for $43 billion. Executives said they would double down on the company’s efforts in 5G and fiber.
Upstack‘s $50 million investment from Berkshire Partners signaled a new era in the channel.
The leader of the New York-based firm vowed to use the funds to pursue high-performing agencies. Thus far, Upstack has approached more than 100 partners about an acquisition, and heavy hitters like Chris Palermo’s GCN have come aboard.
Read about Berkshire’s initial investment, as well as our Q&A with Upstack’s head of global channels and alliances.
Multiple publicly traded software companies went private in 2021.
First was Proofpoint, which accepted a $12.3 million deal from Thoma Bravo in the spring. Proofpoint joined Sophos, DigiCert, Imperva and Barracuda Networks in Thoma Bravo’s portfolio.
Then in June, cloud data and analytics provider Cloudera announced a $5.3 billion sale to three different investment firms.
Most recently, email security provider Mimecast agreed to a $5.8 billion purchase by private equity firm Permira.
Read about Proofpoint, Cloudera and Mimecast‘s deals.
The Dell Technologies team chose to part ways with VMware.
Dell made good on nearly a year of speculation by spinning off VMware. It previously owned 81% equity in VMware. They announced the deal in April and completed the divestment in November.
An analyst noted that the combined company failed to find synergies, particularly around security.
Read our coverage of the divestment.
Utah-based Telarus acquired two of its smaller peers in the brokerage space.
Telarus in March announced the acquisition of Philadelphia-based Chorus Communications. Three months later it revealed that it was buying Virginia-based Comtel Communications. In both cases the purchased company brought a loyal agent base to Telarus.
Telarus made the purchase using an investment it received from Columbia Capital.
CDW shook up the VAR/MSP world with its purchase of Sirius Computer Solutions.
CDW shelled out $2.5 billion for the MSP, which has repeatedly scored at the top of the MSP 501. Forecast numbers have CDW increasing its service revenues 45% as a result.
CDW announced the deal in October and closed it in December.
Read about the acquisition.
No, Microsoft didn’t buy AT&T, but it agreed to a deal that could drastically change the role of telco service providers going forward.
Microsoft announced plans to acquire AT&T’s Network Cloud platform and consequently gain access to the AT&T 5G core. Moreover, Microsoft said it would hire AT&T’s Network Cloud platform engineering team and run software development for Network Cloud in Azure.
The agreement saves AT&T money, but analysts questioned if Azure will try to form more partnerships of this nature.
Read more about the alliance.
Discussion around agent M&A has largely focused on Upstack, but other consultancies have functioned as buyers.
Take for instance Pennsylvania-based Helm Partners, which has made two noteworthy partner acquisitions in 2021.
First the company bought Corey Communications, bringing in approximately 65 new subagents as a result of the deal. Then Helm bought Convergent Technologies (CTI). CTI gives Helm a wireless practice, while Helm can help CTI take avdantage of the cybersecurity opportunity.
Read more about Helm.
Viasat shored up its position in the business satellite market with an acquisition.
Viasat announced plans to buy London-based Inmarsat for $7.3 billion. The deal will close early in 2022. The deal gives Viasat a U.K. presence and will help it expand its global footprint.
Edward Gately has the scoop.
The carrier divested a couple of key assets in order to focus on digital products and services.
First Lumen sold off its Latin American business to Stonepeak for $2.7 billion. Then it sold $7.5 billion worth of U.S. ILEC assets to Apollo Global Management, which has since renamed the new company Brightspeed.
The digital services Lumen will be focusing on include SD-WAN, cloud and security. Lumen also retains its national fiber routes and CLEC practice.
Read about the ILEC sale and partner speculation about Brightspeed.
Comcast Business‘ acquisition of Masergy painted a picture of how the cableco of the future might look.
Comcast hailed the acquisition as an opportunity to move deeper into the enterprise and enhance its SD-WAN/SASE offerings. But perhaps most importantly, it signaled that Comcast is looking to do business internationally, rather than staying put in the U.S.
On the other hand, the deal filled the middle mile gap in Masergy’s portfolio.
Check out what partners had to say about the completed acquisition.
Ericsson bolstered its communications platform as a service (CPaaS) capabilities with the acquisition of Vonage.
A year after Ericsson closed its $1.1 billion acquisition of Cradlepoint, the Swedish company announced the $6.2 billion purchase of Vonage. The deal will make Vonage an Ericsson subsidiary that retains its own brand. It remains to be seen what Ericsson will do with Vonage’s UCaaS and CCaaS technologies.
Partners expressed a mixed bag of opinions about the deal.
Read more analysis of the deal.
Chicago-based solutions brokerage Avant announced a move that should prove highly consequential to the tech advisory channel.
Avant accepted an undisclosed amount of funding from private equity firm Pamlico Capital. Avant’s owners said that Pamlico has not given them a hard timetable for a return on investment, and they also noted that Pamlico appreciated its organic growth strategy. Some partners suggested that Avant will use some of the money to invest in partners.
Check out Avant CEO Ian Kieninger’s interview with Channel Futures.
We’re cheating a little bit by combining these two into one, but both massive deals hit the presses at around the same time.
On one hand, data center real estate investment trust CyrusOne agreed to a $15 billion acquisition from investment firms KKR and Global Infrastructure Partners. Executives said the investment will help CyrusOne more rapidly expand gobally.
On the other hand, another real estate investment trust in the form of American Tower, announced the $10.1 billion purchase of CoreSite. The buyer framed the transaction as an opportunity to bolster its 5G support as convergence occurs between wireline and wireless networking.
Get details about the CoreSite and CyrusOne acquisitions.
The UCaaS giant‘s decision to buy Mitel impacted the VAR/agent world in a very direct way.
The $650 million deal, which the companies styled as a partnership, entailed that RingCentral would provide Mitel’s 35 million-plus customers with a migration path to to the RingCentral MVP platform. Jon Arnold of J Arnold & Associates said the deal reminds him of RingCentral’s agreement with Avaya, which also gave them a host of new enterprise customers.
“This is exactly what Ring was looking for when they partnered with these bigger, more established players, because they have a big install base of legacy premises-based telephony systems,” Arnold told Channel Futures.
For partners like Peter Radizeski of Rad-Info, it meant that they had to deliver potentially unpleasant news to their customers.
“This is end of life for all Mitel hardware. This is end of life for MiCloud. This is end of life for Five9’s partnership with Mitel,” Radizeski wrote.
The move came several months after RingCental bought Kindite to improve its security posture.
Edward Gately had the scoop on the partnership.
BCM One was not messing around when it came to UCaaS acquisitions this year.
The New York-based company kicked off the year by announcing the purchase of SkySwitch, giving its MSP partners access to a white-label offering.
In the summer, BCM One announced the purchase of WCS and its IP-enabled international voice and data network.
Last, BCM One bought CoreDial, which will combine its team and platform with that of SkySwitch. The result is the formation a highly competitive private label offering.
See our analysis of the CoreDial, WCS and SkySwitch transactions.
Another UCaaS player announced plans to fade into a larger provider.
8×8 and Fuze agreed to a $250 million acquisition that gives 8×8 Fuze’s enterprise customer base. The deal presents an opportunity to cross-sell 8×8’s contact center into Fuze customer accounts and leverage Fuze’s vertical expertise.
Some partners called the acquisition a no-brainer, citing the seemingly affordable cost. Others questioned how 8×8 will integrate with Fuze’s technology.
Read all the partner reactions to the deal.
Another UCaaS player announced plans to fade into a larger provider.
8×8 and Fuze agreed to a $250 million acquisition that gives 8×8 Fuze’s enterprise customer base. The deal presents an opportunity to cross-sell 8×8’s contact center into Fuze customer accounts and leverage Fuze’s vertical expertise.
Some partners called the acquisition a no-brainer, citing the seemingly affordable cost. Others questioned how 8×8 will integrate with Fuze’s technology.
Read all the partner reactions to the deal.
The indirect technology sales channel experienced an unprecedented number of mergers and acquisitions in 2021.
Although the channel has witnessed consolidation in the past, M&A has predominantly occurred on the vendor/carrier side. However, a wide balance of vendors, distributors and customer-facing partners turned to consolidation in the last year. Two of the largest distributors came together, multiple brokerages accepted private equity, and several UCaaS providers found buyers.
A mix of factors helped drive consolidation in the past year. In some cases, like that of the UCaaS space, competitors made bold moves to keep up with the pace of their largest rivals. At the same time, the pandemic put many companies in a position where they needed to sell their business. Furthermore, private equity firms saw the perfect opportunity to make investments.
Indeed, private equity courted the channel in a massive way in 2021. It led to one of the largest investments an agent partner has ever received, and MSPs have also faced a stampede of prospective investor. Moreover, partners have expressed concerns about how private equity will impact the channel, particular several years from now when investors are seeking a return.
We decided to cover two dozen of the biggest mergers and acquisitions that occurred in the business technology indirect channel this year. The list, as you can imagine, is not exhaustive. For example, we must give an honorable mention to Zoom, whose $14.7 billion proposed purchase of Five9 fell by the wayside. We based this list off the size of the deal and the involved companies’ proximity to channel partners.
Scroll through the 24 images above to see the biggest channel-impacting consolidation stories of 2021.
Check out our October M&A wrap if you missed it.
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