PAETEC Acquires Avaya Partner

By Khali Henderson

PAETEC Holding Corp. announced Tuesday that its wholly-owned subsidiary, CLEC PAETEC Corp., has closed on the acquisition of Quagga Corp., a privately-held Sacramento-based systems integrator and the top Avaya partner on the West Coast. Terms of the deal were not disclosed.

Upon the closing of this acquisition, Quagga will become part of PAETECs Integrated Services Group (ISG), which is focused on delivering equipment-based communications solutions to businesses nationwide. ISG also includes the assets of two earlier acquisitions of PBX dealers, including East Florida Communications Inc., Daytona Beach, Fla., in 1999 and Cisco VAR Data Voice Networks Inc., Springfield, Pa., in 2000.

Founded in 2003 by Ken Apperson and Scott Knorp, Quagga has expertise in IP-based voice and video systems for medium and large businesses. It also specializes in data and business process management  as well as consulting, design and maintenance of communication systems. Over the past six years, the company has grown to 80 employees and is the largest Avaya partner in the western region as well as a leading integrator of Polycom, Lifesize and Tandberg video collaboration applications.  It has sales offices throughout California, New Jersey, Texas, Arizona, Missouri and Nevada.

“The acquisition of Quagga fits our five-year strategic plan and further extends our ability to fight unfair in the marketplace by offering unique capabilities which our competitors simply cant match, said Douglas Derstine, PAETECs president of wholesale, in a press statement.  For nearly 10 years, weve had a robust Value Added Reseller presence in the Eastern United States.  The addition of Quagga now allows our equipment capabilities to more geographically mirror those of our national network business.”
Unlike the previous ISG acquisitions, Quagga targets medium to large customers rather than SMBs, rounding out the expertise of the division, Apperson added.

For Quagga, the acquisition offers the VAR the scale that it needs to compete with the largest VARs for high-profile accounts, Apperson said, noting that PAETECs $1.6 billion revenues adds the credibility larger clients require. This is a game-changer for us, he said.

In addition, Apperson said the combo creates a new animal in the VAR marketplace that sits somewhere in between the $200 million independent VARs and the behemoth mass market LEC equipment divisions. PAETEC will be able to offer the financial stability/reputation of the larger telcos but the expertise of the independent VAR, he said.

Quagga initially will keep its name and continue to operate under the leadership of Apperson and Knorp. PAETEC spokesperson Chris Muller said Quagga will operate primarily as it has and will continue to represent its present suppliers. The field force, however, may be called on the implement sales of the companys new IP Simple bundle, which combines PAETECs SIP products with its Allworx IP PBX.