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East Region Microsoft Partners Intellinet and ICS Merge

Two of Microsoft's highest-profile systems integrators (SIs), one in the Southeast and one in the Northeast, are merging into one East Coast services company.

Intellinet, based in Atlanta with offices in Charlotte, N.C., and Durham, N.C., and Innovative Computer Systems (ICS) Inc., with offices in Farmington, Conn., and Waltham, Mass., on Tuesday announced a definitive agreement to merge.

The combined entity will operate as Intellinet, which was an RCP Rocket Award winner in 2013, and Intellinet CEO Mark Seeley will retain that title for the combined organization. Steve Roux, founder and CEO of ICS, becomes president of the Northeast district of Intellinet. Together the longtime companies have won more than 70 awards from Microsoft, industry groups and the media. Both are back-to-back winners of regional Microsoft Partner of the Year awards.

"The merger of Intellinet and ICS will enable us to deliver more strategic, comprehensive, technology-enabled business solutions to our customers throughout the East Coast," Seeley said in a statement. "By combining our business acumen and technology expertise, our teams will drive further innovation and deeper engagement with our customers from strategy to technology solution implementation to managed services."

Mark Seeley (left) will remain the CEO of Intellinet, while Steve Roux (right) will become president of the Northeast district of Intellinet.

Terms of the deal weren't disclosed. Both Seeley and Roux participated in a panel discussion at the Microsoft Worldwide Partner Conference (WPC) last July that was excerpted in Redmond Channel Partner magazine's September issue.

Based on comments during that session, the combined firm should have revenues well into eight figures, with Intellinet accounting for about twice as much revenue as ICS. Intellinet, which started out in 1993 as a Microsoft mail migration partner, has invested heavily in moving upstream into management consulting and advisory services, in addition to projects, cloud and managed services.

The company's mix of business is weighted heavily toward larger clients, with (in Microsoft parlance) Enterprise Partner Group-level and Corporate Account Managed (CAM) engagements heavily outnumbering a small base of Corporate Territory Managed (CTM) customers.

The bulk of ICS' presence is among the customers of the CAM and CTM spaces, and the company has a strong portion of its business in managed services through its co-sourcing agreements, making the deal complementary in more than just a regional sense.

"This merger, with another award winning, committed partner, will enable us to raise the bar even higher on our customer impact," Roux said in a statement. "Our joint commitment to unparalleled client satisfaction, a strong breadth of technology expertise, and a culture of giving back to our communities makes this merger a perfect fit.  We are looking forward to collaborating with the Intellinet team to offer enhanced end-to-end solutions to our clients."

UPDATE (2/6): Mike Harvath, CEO of Revenue Rocket Consulting LLC and the M&A advisor on the deal, called it a classic merger. "It is a one-plus-one-equals-three deal in the pure sense, and I would expect their firm to do very, very well in the future," Harvath said in an interview Friday. "They definitely bring an interesting overlap of skills and geography and covering enterprise through CTM."

Posted by Scott Bekker on February 04, 2015 at 8:35 AM