PAETEC, XETA Close Straightforward Merger

PAETEC Holding Corp. has wrapped its acquisition of Avaya dealer XETA Technologies Inc.

The merger, announced in February, was valued at about $61 million and XETA now operates as a wholly owned, indirect PAETEC subsidiary. XETA shareholders approved the deal at a special meeting on May 26 and the details were finalized on Tuesday. As a result, XETA has become a privately held company even though PAETEC remains public and its stock no longer trades on the NASDAQ.

PAETEC which owns a CLEC, software unit and equipment division, among other groups decided to buy XETA for its managed services and cloud computing arsenal. XETA specializes in Avaya gear and targets vertical industries including healthcare, financial, hospitality and education.

For PAETEC and XETA channel partners, little should change in fact, the purchase provides a lot more opportunity, since PAETEC is doubling the size of its managed services division, Arunas Chesonis, chairman and CEO of PAETEC, told Channel Partners in February.

Weve been selling equipment and managed services throughout the United States already its a $100 million business for us,” Chesonis said. With XETA in tow, PAETEC gains deeper reach, and will boast technicians and engineers in all parts of the country. There were no changes in partner compensation to announce.

Its very straightforward what were doing here,” said Chesonis.

To that point, PAETEC is bolting XETA onto its managed services group that includes previous acquisitions Avaya distributor Quagga Corp. and Allworx, an IP PBX manufacturer. XETA fits right in to PAETECs strategy of selling software, voice and data gear, cloud computing, and professional services to enterprises and other larger organizations.