Two chance upgrades on a flight to Anchorage four years ago have led to two prominent Canadian solution providers coming together.
Edmonton-based F12 Networks and Toronto-based Insite Computer Group have merged in a deal that the company’s principals say will result in a solution provider able to expand both in geography and reach into the SMB market.
Insite brings with it a background in cloud and managed services, while F12 specializes in hardware-as-a-service and offers a unique customer support solution. Together, the two companies aim to be able to provide a single monthly invoice for their SMB customers’ technology needs.
“It’s a complete IT offering for a monthly fee that includes hardware, connectivity, network, security, and cloud,” said Alex Webb, CEO of F12, of the vision of the combined companies.
“We have a more mature cloud product than F12 does, and F12 has a great HaaS product. It’s a great fit for our current clients, and gives us the capacity to serve customers across Canada,” said Doron Kaminski, COO of Insite.
The combined entity, which will be integrated over the next year to 18 months and will ultimately go to market under the F12 brand, the executives said, although some Insite branding, particularly around its ThinDesk cloud-based desktop offering, will stay with the combined company. Combined, the companies have five Canadian data centres, which will prove a major differentiator, Kaminski noted.
While there isn’t a lot of overlap in their customer bases, both F12 and Insite focused on very similar customers – the typical customer profile is a multiple-location SMB large enough that IT is a key enabler, but too small to have an internal full-service IT department. Both solution providers focused largely on their home territories (Alberta and Ontario), but had some “outlier” business outside of those regions. With the merger in place, they feel they’ve got a better story to expand the business to a Canada-wide scale, Kaminski said.
While the business will inevitably lead to some midmarket clients, Webb said that both organizations want to retain their focus on the SMB market where the new message of a complete IT infrastructure on a single invoice and on an as-a-service basis is most compelling.
The road to the two organizations started about four years ago, as both Webb and Kaminski reached upgrades on a flight to Anchorage, Alaska. Both were en route to Anchorage for a meeting of the VentureTech Network-based Masterminds chapter to which both solution providers belong. Kaminski said the two got talking, and at that point put together a “napkin sketch” of what a merger might look like. While the two stood in touch – both from VTN and Masterminds and outside of it – it wasn’t until last fall’s One Ingram Micro event that things really started to heat up, and by December, both sides were conducting the necessary due diligence to come together. Kaminski and Webb both agreed that being in the same Masterminds chapter, wherein solution provider owners serve as an external board of directors to each other, helped the deal come together quite smoothly.
“It really helped us keep the trust factor throughout the deal,” Webb said. “It was easy because we’ve been reporting to each other in that peer group for four years now.”
Both solution providers have their own history of acquisitions. Insite purchased virtual desktop specialist ThinDesk two years ago, while F12 built out its presence in Calgary with the purchase of CPU Technologies in 2006 and Twin Solutions in 2010.