This is the type of story that just will not go away despite the denials from Xwave.
In the middle of last week one of my trusted sources told me that MetaFore was acquiring Xwave.
I called Xwave's director of communications Karen Ewing, who after some checking, said to CDN that it was not happening nor were their any discussions. Ewing then posed a question to me: Why would Xwave sell when they have 19 per cent growth?
A good question.
Then on Sunday an insider at Xwave told me that the company is all a buzz with anticipation of being acquired by MetaFore.
So this morning I again called Ewing, who again denied that anything is happening. I have also placed a call to MetaFore CEO Bryant Jackson for his comments.
On the surface I can't see why MetaFore could buy Xwave. After some research I think MetaFore can make this deal happen.
MetaFore is No. 5 on CDN's Top 100 list at $250 million to $300 million. Xwave is No. 4 with the virtual the same amount of revenue. MetaFore can afford Xwave more than likely on its own. If you factor in Hartco, which owns MetaFore along with MicroAge, MicroServ and NorthWest Digital then they would have plenty of cash to make this type of a deal.
This still does not answer Ewing's question on why Xwave should sell when they are so profitable.
I can only venture a guess. Xwave is a division of Bell Aliant, which is a company made up of regional telco providers such as NorthernTel, Telebec, and KMTS. Xwave isn't exactly a regional telco provider. And, the best time to sell an asset is when it is at its most profitable so that the seller can maximize the most from that asset.
There is another reason. According to Janet Waxman of IDC, VARs are acquiring other VARs and this trend will not decline. The market is consolidating because customers are demanding more integrated solutions. These mergers and acquisitions will alter the very fabric of what the channel is, she wrote.
A merger or acquisition between Xwave and MetaFore would do exactly that. If this deal were to happen then a combination of MetaFore and Xwave would rival SoftChoice as a $400 million player at the very least.
To reiterate this is all speculation. Nothing has been officially confirmed by either party. CDN will be tracking this story and providing it to you when or if it ever breaks.
Three quick hits before I go. Sorry for not blogging more regularly. I have been off. But I am back and ready to inform you on many topics concerning the channel.
My first quick hit involves that Xbox tester who exposed the poor manufacturing in the product. Well he lost his job. Robert Delaware worked officially for Excell Data, a temp agency as a tester, but he was told of his fate by his Microsoft manager.
David King is joining Acision as COO from UTStarcom.
And, Honeywell's channel chief Martin Kirmis has lef the company to become the European sales director of BlueStar, a POS and RFID distributor.