Channel M&A in Action
Executive Officer: Clark Atwood
Primary Business: Master agent
Company Acquired: JB Telecom Consultants Telecom LLC
Transaction Date: April 1, 2010
What was the reason for the transaction?
We wanted to tap additional executive management to help run business functions.
What is the status of the integration?
Completed. Jana Beck is still an executive with the company. Her employee, Barbara Rode, is also still with the company.
How did you integrate this purchase, with an eye toward transformation, without jeopardizing your current business model?
Jana brought many ideas to the table. She continues to streamline internal processes and focus on back-office system enhancements. Barbara was moved from sales support to client escalation management. She has done a great job on putting out fires that seem to occur in our industry.
What challenges did you face?
The business challenges are almost always understanding what things will look like in the future. We could have done a better job modeling some of the business aspects.
What benefits have you realized?
We were able to take Jana from being a producing agent to being a part owner and a manager of the company. She brought (and continues to bring) a wealth of knowledge, experience, ideas, energy and “can-do” attitude. It was one of the best decisions made in the past decade in our company. Barbara did a great job helping transition the client base and has done an excellent job in her new role. This has allowed us to expand the value to our account managers, agents and clients.
In what specific and measurable ways will your channel partners benefit from this acquisition?
Jana has added strength to all the areas she has touched. Barbara has contributed in her roles. There is not one specific area however, here are some measurements:
- Increased sales
- Improved back-office systems and processes
- Management has a better view of the internal workings of the business since the acquisition
One of the best things was someone asked, Why do we do that this way?” This has given us the ability to take a fresh look at our company and how we service clients. This has sparked many improvement initiatives some complete, others underway.
Executive Officer: Brad Miehl
Primary Business: Telecom master agency
Company Acquired: Five Star Communications
Transaction Date: July 1, 2011
What was the reason for the transaction?
An acquisition for MicroCorp must first and foremost be strategic for the company. This would include scale, enhanced distribution and carrier relationships, but it must also adhere to our core acquisition principles, which are that an acquisition:
- Cannot in any way jeopardize the overall financial health of MicroCorp
- Must provide concentrated distribution in strategic markets
- Must enhance one or more relationships with key vendors
- Must provide incremental strategic human resource talent to the MicroCorp family
The Five Star acquisition successfully met all the core principles referenced above in that:
- The transaction did not risk the health of our company in any way.
- We have significantly greater distribution in the state of Florida.
- We have more than doubled our billing revenue with CenturyLink (formerly Qwest).
- We hired the entire Five Star staff, many of whom have a tenure with Qwest longer than they would like me to call them out on here in public.
- We significantly enhanced the processes, back-office systems, carrier agreements, training programs, etc. to the existing Five Star sales channel.
What is the status of the integration?
We are fully integrated.
How did you integrate this purchase, with an eye toward transformation, without jeopardizing your current business model?
We put an integration team together more than two months prior to our closing. This helped tremendously as we had to be fully up and running in about 20 days after closing.
What challenges did you face?
Integration was the biggest challenge since we had to have everything migrated to our Nautilus platform almost immediately after closing.
What benefits have you realized?
We added more than 50 new selling agents in the state of Florida. We have enhanced our relationship with CenturyLink (formerly Qwest). We have not only increased our revenue, but the revenue that was once with Five Star is being better managed through MicroCorps processes and systems. The people we hired from Five Star have significant CenturyLink experience, which we are carrying throughout our organization, resulting in greater revenue for us, our channel and our carrier partner.
In what specific and measurable ways will your channel partners benefit from this acquisition?
The Five Star agents and VARs are benefiting by having direct access to better systems and processes. They have much greater resources at their disposal including people, vested carrier agreements and trainings. Our existing MicroCorp agents are benefiting in that we have greater resources on staff dedicated to key vendors and the success of their programs. All said, this translates into greater success for our channel as a whole.
