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The acquisitions of these companies will bring hosted PBX and data center assets, respectively to the California CLEC.

May 5, 2011

4 Min Read
TelePacific To Buy Telekenex, OCiX

By Khali Henderson

TelePacific Communications, a Los Angeles-based CLEC serving small and medium businesses in California and Nevada, announced Thursday definitive agreements to acquire two companies Telekenex, an IP services provider with offices in San Francisco and Seattle, and its sister company Orange County Internet Xchange (OCiX Inc.), a dedicated provider of colocation services.

Both companies share some owners, including CEO Brandon Chaney and COO Anthony Zabit. Telekenex, however, also has venture capital owners, including Walden Venture Capital and ALTOS Ventures. Further, Telekenex sold its data center business to OCiX in spring 2008.

Under an agreement with IXC Inc. and IXC Holdings Inc., which does business as Telekenex, TelePacific will buy the assets and customers of Telekenex. When the transaction closes, which is expected in third quarter, TelePacific Communications will gain approximately 1,000 business customers and 122 employees as well as the addition of a nationwide hosted PBX platform, a nationwide MPLS backbone, a fiber network in the San Francisco-Oakland Bay area, and managed network and security services.

TelePacific plans to operate the business assets of Telekenex its service offerings and customer operations — as a separate channel led by Telekenex CEO Chaney.

The acquisition of OCiX brings a second SAS 70 data center to TelePacific. It also gained a data center in its acquisition of O1 Communications last summer. OCiX operates a 10,000 square-foot SAS 70 Type II certified facility, located in Santa Ana, Calif., which is near the former O1 facility in Irvine.  TelePacific has additional colocation facilities in San Jose, San Francisco, San Diego, Los Angeles and Las Vegas.

Chaney told Channel Partners that the acquisitions will bring cloud, VoIP and managed services to TelePacific. The CLEC presently offers IP, voice, data and Internet services, as well as business continuity, security and managed solutions.

Like TelePacific, Telekenex has an indirect sales channel, which is managed by Tom Sprinkle. Well use the approval period between now and closing to determine how best to fold the program into TelePacifics ensuring that Telekenexs agents arent impacted and TelePacifics Telepartners realize upside as a result of the transaction,” said TelePacific spokesperson Rebecca Rosen, director of marketing communications.

Chaney told Channel Partners that Telekenex has about 50 agents with some overlap to Telepartners. OCiX also has an agent program with a lesser degree of overlap, brining more data center focused agents to TelePacific, he said.

In a communication to its indirect sales agents, TelePacific said the transactions and other developments, such as it recent investments in building an Ethernet over copper network and introducing mobile services, have been done with its channel in mind.

Specifically, the memo stated the data center acquisitions open up all new vertical markets to our agents, allowing them to sell to industries that require specialty certifications in the data center marketplace.” With regard to Telekenex, the memo pointed to the hosted PBX product, in particular ,as an attractive proposition to SMB customers.” The CLEC, however acknowledged that some of its Telepartners sell traditional premises-based PBXs and positioned it as an option for those that want to sell cloud-based services.

Master agent Jeffery Ponts, executive vice president, Datatel Solutions Inc., agreed. The purchase gives Telepacific an immediate go-to-market hosted VoIP offering, with tenured implementation and back-office personnel.

Ponts also noted that TelePacific, which operated exclusively in California and Nevada, will have a national MPLS and SIP product, which rounds out its core offerings.  TelePacific will now be competing with the national CLECs with the advantage of their legendary customer care group, he said.

Ponts also gave kudos to TelePacific for its handling of the recent spate of acquisitions. Telekenex is TelePacifics sixth acquisition since we signed our master agency agreement.  With each acquisition business and care disruptions were minimal to non-existent, which gives me complete confidence in this merger of cultures and customer support.

Alan Sandler, president of master agency Sandler Partners, agreed. TelePacific has grown rapidly through both organic growth and acquisition, and has one of the few management teams that has been able to manage acquisitions and integration in a  manner that has been painless to the agent/customer, he said.

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