Consolidation Continues: Telarus Buys TCG in Major Distribution Team-Up

Telarus has acquired TCG in a move that expands its reach geographically and establishes the firm as one of the leading players in a technology distribution market experiencing rapid consolidation.

Utah-based Telarus announced the acquisition of Florida-based TCG on Tuesday. Telarus stated in its announcement that the combined company will be the largest technology solutions brokerage (also known as a technology services distributor) in the channel. That’s based on new monthly bookings and revenue. But Telarus CEO Adam Edwards said his focused more on scale than size.

Telarus’ Adam Edwards

“I think sometimes people confuse scale with just pure size. And that’s not the case here,” Edwards told Channel Futures. “What scale really means is that with size you get additional benefits, including cost efficiencies and value creation for partners.”

The deal strengthens Telarus’ footprint on the East Coast and gives it access to a TCG’s loyal sales partner base. For TCG, joining forces with Telarus gives TCG agents a deeper set of resources, including tools like Telarus’ recently launched cybersecurity assessment. It will also bolster TCG’s engineering chops. Moreover, TCG president Dan Pirigyi said his team found a cultural fit with Telarus.

“As we looked around the landscape, we … gravitated to these guys,” said Pirigyi, who will serve as senior vice president of strategic partners. “We’ve admired them from afar for some time.”

Telarus’ Dan Pirigyi

This is not the first acquisition for Telarus. Four years ago it acquired fellow Utah firm CarrierSales. In late 2020 Telarus accepted an investment from Columbia Capital, and it has used those funds to buy Chorus Communications and Comtel Communications.

Integration

Pirigyi said all TCG employees will make the transition to Telarus. He said the combined company is still determining the organizational structure of its leadership team.

Edwards said Telarus will need to balance between methodical and speedy as it integrates TCG.

“What we learned from our past history is, you want to integrate quickly, but don’t break things. And that means partners come first. You want to make sure they’re getting the same consistent support they’ve always gotten. You want to make sure their expectations are being met and that everything is a positive. Nobody likes change when things are going well,” Edwards said.

He said partners initially will continue to interact with Telarus and TCG through the same access points as before.

“We’re not going to mess with any of that until we study it out and measure twice. And then we start integrating systems, bringing everybody on board with access tools and resources … as quickly as we can,” he said.

But commissions integration, he said, will take place at the very end of the process.

“Partners would rather have two accurate checks than one inaccurate check. So we run systems in parallel for a good number of months to make sure we don’t miss anything there. And then we bring those together last,” he said.

Edwards said Telarus ran the same playbook when it acquired CarrierSales. It held off on integrating commissions systems until the last step, he said.

“Partners don’t care if you integrate that in one month, three months, six months or nine months,” Edwards said. “What they care about is if something is miscalculated or if something is missing. That’s the cardinal sin. That’s why you run them in parallel for a while.”

Edwards and Pirigyi said Telarus and TCG both use RPM for commissions. Similarly, the previous companies Telarus acquired (CarrierSales, Chorus and Comtel) used RPM.

An Underdog Tale

Edwards said that TCG and Telarus’ bases of sales partners don’t overlap much. That’s due in part to the efforts TCG has made in recruiting partners in smaller, overlooked markets.

“It was our ground-and-pound [approach] in secondary and tertiary markets,” Pirigyi told Channel Futures. “We’ve been successful in finding people who aren’t in our industry and educating them that they can make a residual commission and a bonus by simply joining us.”

That unique partner base came in part because …