Southeastern regional telecom provider C Spire is acquiring TekLinks Inc. one of the top managed service providers in the country, in a deal that instantly creates a nationwide end to end hybrid IT services powerhouse that can design, implement and deliver a full suite of IT services for enterprise customers both on and off premises.
The deal puts C Spire into a position to aggressively grab share from telecom behemoths in an enterprise IT services market where customers are demanding a single IT partner that can deliver and control an end to end consumption based IT platform for both wired and wireless.
The deal makes the combined company the top end to end IT enterprise services provider in the Southeast with over 500 services professionals, four owned and operated data centers with space in others, and 8,000 miles of fiber network serving business customers.
C Spire, which is headquartered in Ridgeland Mississipi and is the largest privately held wireless provider, has a full suite of wireless, TV and internet services for business and homes
C Spire already had a fast growing enterprise business, but with the acquistion of TekLinks that business is now five times bigger.
"This is one plus one equals three," said C Spire President Stephen Bye in an interview with CRN. "We are going to see an acceleration of growth as we integrate what TekLinks has with what we have into an end to end solution all the way from the desktop to the cloud. We are going to not only be able to grow within our existing customer base as we offer them a more complete solution, but also compete more aggressively to take market share away from others."
C Spire expects to complete the acquisition and merger integration process within the next 60-90 days.
Terms of the deal for Birmingham, Alabama headquartered TekLinks, which is privately owned by Pamlico Capital, were not disclosed.
TekLinks, No 146 on the CRN SP500 with 325 employees, did $146 million in sales in 2017. TekLinks is one of top partners for Cisco, Dell EMC, VMware, Microsoft, Veam and Citrix.
The deal is set to launch C Spire -- the largest privately held wireless provider in the country - on a bold bid to accelerate its enterprise IT services business share throughout the country as part of what it calls a "natural" response to customers.
The acquisition comes even as as larger rivals like AT&T, which is acquiring Time Warner in a blockbuster $85.4 billion deal, are focusing on media content at what some call the expense of their foundational connectivity and networking services for enterprise customers.
Bye, a former CTO for Sprint and vice president of wireless for Cox Communcations, said the deal is a game changer for the industry and for customers.
"What this really does is allow us to provide the entire spectrum of services to the customer: voice, data, applications and the distribution and management of their content," he said. "We can now deliver a full suite of services from desktop support all the way through networking and the performance and high availability of applications that ride across that. We clearly bring a lot of networking experience and TekLinks brings a lot of capabilities in the enterprise infrastructure business as well as the cloud."
The deal is sure to have a dramatic impact on the ability of customers demanding higher performance, end to end SLAs (service level agreements) for both on premises and off premises solutions, said Bye. "This is huge in terms of its impact on end to end SLAs," he said. "When you are providing that end to end solution with the ability to support it, monitor it, manage it and maintain it that leads to much higher performance."
In fact, Bye said, that combining the assets of the two companies in an end to end platform is sure "to lower the amount of pain and reduce the amount of friction" in the end to end network on premises and off premises. "This is going to allow customers to worry less about the infrastructure and focus more on growing their business," he said. "Now we have better tools and more capabilities that allow us to make that infrastructure even more efficient for the customer."
Just as important than the breadth and depth of the combined services from the combination is the cultural characteristics that unite C Spire – a long time TekLinks customer- and TekLinks- A C Spire customer, said Bye. "What I love about our business and the way we approach it and how TekLinks operates is we both never lose sight of the customer," said Bye. "The customer is what matters. That sets us apart. That breaks the mold from a lot of other companies. While other companies talk about service, we deliver it. When you look at our Net Promoter Scores, and how we serve our customers that is what is important. At the end of the day, great customer satisfaction leads to a strong business."
C Spire, which was originally Cellular South, changed its name seven years ago as part of a move to diversify into other segments of the market including enterprise IT services. "As we grew that business, we grew to love that business," said Bye. "It's a great business serving enterprise and business customers. When we looked at TekLinks we saw them doing some similar things, but getting deeper into the customer's network. As a network provider we were building out to really the premise and they were building in the premise offering higher end services and applications. When you combine the two of those you end up being able to serve the customer's needs end to end across every product and every service. That is what we love about the combination of the two."
C Spire has been successful competing in the hyper-competitive wireless market and also in its bid to expand into the enterprise services business. One sign of that growing enterprise servicds esuccess came with the recent award of a statewide landline services contract with Mississippi that is being contested by AT&T.
"We intend to take on AT&T and other competitors in our space and we are very confident that with the assets and capabilities we have, we can continue to take market share away from them," said Bye.
While telecom behemoths have more resources, they are simply not as customer focused as C Spire, said Bye. "We are winning business today and we are going to win even more business tomorrow because a lot of the other guys aren't as focused on the customer," said Bye. "They have a lot more resources but they are more interested in perhaps buying a content company or an entertainment company. At the end of the day we are focused on delivering a product that makes a customer's business run more efficiently or effectively. That to me is the essence of it. That is why this is going to be successful. That is why we have been successful to date and why we are going to continue to be successful."
Don Monistere, former president of TekLinks and the new general manager of C Spire Business Solutions, said the TekLinks team is "totally pumped" about the game changing synergies of the deal. "The strategic nature of this is spot on," he said. "This is going to make ripples in the market. People are going to take notice of this bold move by C Spire."
Monistere said the TekLinks acquisition is just the beginning of an aggressive enterprise services expansion. "This is not just a one and done," he said. "This is not C Spire coming in and acquiring TekLinks and saying we have arrived. This is a push to bring our brand of IT services nationwide. That is something we have been talking about at TekLinks for a long time."
The combined business solutions group will continue to look at other acquisitions and organic growth in adjacent territories, said Monistere.
"We just got way stronger on all three aspects of our business: in professional services, our resell business and our managed cloud services business. We just picked up an extensive group of operations people focused on servicing and supporting customers and for that matter a brand new, shiny state of the art, tier 3 data center in Starkville, MIssissipi. It's an impressive facility. I can't wait to take it for a spin around the block."
The natural growth path for the C Spire business solutions group will be to look toward expanding in Houston,Tex. Dallas, Tex. Baton Rouge, La., Memphis, Tenn., and Little Rock, Ark, said Monistere. Eventually the company will look at expanding into Florida and the Carolinas.
Monistere said he sees C Spire creating comprehensive hybrid platform for customers. "There is no part of the IT infrastructure that we don't own now," he said. "We now have the capability to lay our own fiber into a customer premise all the way to management of the IT devices. Soup to nuts it can all be done now with one company."
Monistere said he does not see a competitor that has the breadth and depth of the services across the entire integrated spectrum of services both on premises and off premises. "You might find a competitor that will compete in portions of the business but not with the entire integrated model we have from the design phase, implementation phase and then into the support phase all handled under one roof," he said. "There just aren't many organizations that can do that from start to finish."
TekLinks CEO Jim Akerhielm, a 30 year veteran who built TekLinks into one of the most respected cloud and MSPs in the country, said the combination of the two companies with "one playbook" is a game changer for customers.
"The managed services talent of TekLinks coupled with the incredible network talent in both consumer and small business of C Spire is incredible," he said. "Customers want a partner who can design, implement and support a complete IT solution starting from the infrastructure with fiber and data centers, the hosted services, on premises gear, the professional services to manage all of that on premises gear, sophisticated managed services and the monitoring capabilities of an MSP. C Spire will be able to deliver all of that."'
Akerhielm, who was previously CEO of telecom provider NuVox before it was acquired by Windstream, said the deal checks all the boxes for customers looking for an extensive infrastructure capabilities for private and public cloud, with system integration and managed services capabilities both on premises and off premises.
"I have been on both sides (telecom and managed services) and that is why I am so excited about the combination," said Akerhielm. "When you go to a small to midsize customer and say I am responsible for your connectivity, wireless, on premises gear, the workloads that we host, manage and workloads on premises, there is no other competitor that can offer that. No one else can do that."
Akerhieim said he expects to spend a short amount of time as a strategic consultant to C Spire and then take some time off before looking for the next opportunity. "I am definitely not going to immediately jump back into the next thing that comes up," he said. "I think it is good to take a look at the lay of the land and reflect. It has been six great years. It is nice to take a breath."
Akerhielm said the day after he signed the formal acquisition agreement earlier this week he felt a sense of tranquility. "I had a peaceful smile because I know it is the right place for TekLinks," he said. "That is my job as CEO: to make sure TekLinks is in the right place for all our customers and team members."