A little less than five years after first expanding beyond the west coast and into Texas with the Telwest purchase, TelePacific has made an even bigger inorganic move. Today they announced an agreement to acquire DSCI, a managed services and cloud communications provider based in Waltham, Massachusetts.
DSCI started out reselling services as a CLEC back in 2001, but quickly refocused its efforts onto its own network in 2004 and then hosted PBX and other business services starting in 2005, and most recently into the realm of Unified Communications. They serve about 1,500 businesses, with a national footprint but mostly focused in their original home turf in New England and New York.
TelePacific gets two big benefits out of this deal. First is a quick expansion of the company's product portfolio. While TelePacific offers some of these services (such as hosted PBX) in its current territories, they are via partners rather than with their own platform. They will surely be taking the DSCI platform and making it available to their existing customer base, hopefully generating some nice revenue synergies.
The second benefit, however, is a network and data center presence in multiple major markets on the east coast, the first time the company has really done much of anything east of the Mississippi. It's a foot in the door that isn't all that different from the one they started with in Texas with the Telwest deal, and it suggests further in-depth market development over the next few years. DSCI will be operating as a subsidiary on the east coast under its current brand with its current management team intact.
A further thought is that acquiring DSCI may work perfectly well as a foothold on its own, it might work even better with some additional assets. A followup purchase of Broadview Networks, for example, would add some fiber and revenue scale pretty quickly, including another growing cloud communications footprint.
Financial details of the transaction were not disclosed. Q Advisors advised TelePacific, while Brightwood, Carlyle Group, and Tennenboum and provided the necessary debt financing.
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