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Both companies are based in Utah and have "complementary" portfolios.
October 30, 2017
**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from August.**
Sandy, Utah-based Telarus announced Monday that it is buying CarrierSales to become the second largest master agency in its industry.
CarrierSales’ office is five miles down the road in Draper, Utah, but Telarus CEO Adam Edwards tells Channel Partners that location was, if anything, a secondary motivation. He says the marriage of the companies helps Telarus scale and will give partners a better experience as a result of increased resources.
Telarus’ Adam Edwards
“We saw CarrierSales as being a great complement to what we’ve got,” Edwards said. “They’ve got contracts and practices that we don’t, and vice versa. Bringing the companies together is good for both partner communities.”
Edwards praised CarrierSales’ mobility, data center and unified communications as a service (UCaaS) practices. The company recently reached $1 million in monthly billing with inContact and has a strong relationship with CenturyLink. Edwards also says the two companies differ in their operational approach.
“If you look at the field, we’ve got about 12 channel managers out there. They really didn’t take that field approach. They’ve been focused more on operational excellence,” he said. “So they’ve got great tenured support people that are going to complement our operational team. Then as far as field, we’ve got the same familiar faces who are out there right now. We’re going to continue with our regional approach with them.”
Telarus said the deal will add $1.5 million in monthly revenue and lead to annual revenue of more than $85 million. Telarus also benefits from CarrierSales’ relationship with Cox Communications, which has selected only two master agents to deliver its fiber and coax services.
CarrierSales’ RIchard Murray
CarrierSales President Richard Murray will serve as chief operating officer for the combined company. He touted the synergy that will be apparent with the two operations coming together.
“When you look at our supplier portfolios and our partner support structure, it becomes evident how much our two companies complement each other,” he said. “Together, we will be able to provide better, deeper support to our sales partners and continue building tools and adding resources for their success.”
Murray told partners last month that they should expect consolidation in among master agents. He said at the time that he personally was “not out looking” but indicated that he was open to opportunities. CarrierSales acquired CMS Communications in 2013 and Concierge Communications in 2016.
Scott Forbush, Telarus’ recently appointed senior vice president of sales, worked with both master agents when he led Integra’s channel program. He says the combined company will be a leading distributor of cloud and networking services.
“CarrierSales has always had a great reputation for doing what’s right for its agents, helping them with everything from marketing to sales engineering to ensure their partners’ success,” Forbush said. “Our combined company will have over a dozen channel managers in the field which means we’ll …
… be in constant touch with our partners, making sure they’re getting the services and support they want. With our combined back-office staff of industry veterans, we’ll also continue to deliver the white glove, personalized service our partners have come to expect.
Edwards says he believes partners of both companies will benefit from more contracts, tools, expertise and scale.
“Our litmus test for the transaction is that the partners have a better experience, that they have access to more resources, more support, more tools at the end of the day — then we’re doing better,” he said. ” If by their judgment, they feel like we’re clunky and aren’t as responsive, then we’ve blown it.”
While consolidation has been a trend in the channel over the last few years, you could say mergers of master agents and distributors are becoming a sub-trend. It was just a year ago that ScanSource bought Intelisys for $84 million and Sandler Partners bought X4 Solutions. Earlier this year, Synnex spent $600 million on Westcon-Comstor’s Americas business and Tech Data bought Avnet Technology Solutions for $2.6 billion.
Read more about:Agents
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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