July 22, 2020
The Canadian SD-WAN as-a-service provider is buying Elfiq for $800,000. Executives said the purchase improves Adaptiv’s SD-WAN portfolio with a “natural complement.” Consequently, Elfiq’s office and 16 employees will come under Adaptiv’s ledger. Adaptiv Networks CEO Bernard Breton promised that the integration process will suffer “no interruption” for partners and customers.
Adaptiv Networks’ Bernard Breton
“We are delighted to add Elfiq Networks’ advanced networking solutions to our portfolio and to welcome their experts to the Adaptiv team,” Breton said.
A recent Martello financial statement said Elfiq no longer aligns with Martello’s digital experience monitoring (DEM) ambitions. Martello recorded an operating loss of $1.4 million for its Elfiq division in the most recent fiscal year.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
“The company has made a strategic decision to divest itself of the SD-WAN and link balancing business to focus on its DEM strategy, and expects to benefit from the elimination of losses relating to this segment in the near-term,” the company stated.
Martello noted in a news release that Elfiq partners will continue to resell the Elfiq solution.
Martello is divesting of its SD-WAN business to focus resources on its #DEM strategy. By acquiring Elfiq, @adaptivnetworks will broaden its portfolio of SD-WAN solutions for mid-size enterprises and accelerate its international expansion. Read the PR: https://t.co/u76bKbDNPt pic.twitter.com/n0XynZv7SF
— Martello Tech (@MartelloTech) July 22, 2020
Both Martello and Adaptiv operate out of Ontario, although Elfiq’s office is in Montreal. Martello CEO John Proctor said Adaptiv “offers natural synergies for Elfiq.” Elfiq’s edge solution functions on layer 2 – the data link layer – of the network. That will fit well with Adaptiv’s “cloud-native” SD-WAN.
Martello’s John Proctor
“… I’m pleased that the Elfiq team can move forward together under new ownership to accelerate growth of the Elfiq technology,” Proctor said. “At the same time, Martello can now adopt a strengthened focus on our core growth opportunity in the DEM market and accelerate the path to positive adjusted EBITDA.”
“We can say to this guy who founded it, ‘Your baby will live. We want it to grow,'” Proctor said at the time. “We’re not going to dissolve it into this massive organization.”
Adaptiv, formerly known as TELoIP, targets the midmarket and boasts a 100% channel go-to-market strategy. The vendor acquired internet acceleration provider LiveQoS earlier this year.
We recently compiled a list of 20 top SD-WAN providers offering products and services via channel partners.
It’s the third notable SD-WAN acquisition in five months. Palo Alto Networks announced in March that it would buy CloudGenix for approximately $420 million. Subsequently, HPE shattered the news wire by announcing a $925 million purchase of Silver Peak Systems.
After Cisco and VMware in 2017 bought market share front runners Viptela ($610 million) and VeloCloud ($449 million), respectively, analysts waited for another round of SD-WAN acquisitions to launch. But only Oracle’s 2018 Talari Networks purchase broke the silence of the previous two years. Now things seem to be cooking again with the Adaptiv Networks SD-WAN move.
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