PAETEC acquires XETA Technologies to expand its managed service offerings

PAETEC (Nasdaq: PAET) is anxious to get a bigger piece of the managed services pie and to do that it is acquiring XETA Technologies, an enterprise solutions provider.

Under the terms of the agreement, PAETEC will acquire XETA for about $61 million or $5.50 per share in cash.

By acquiring XETA, Paetec will complement its vertical industry focus on the hospitality, education, healthcare, and government sectors with XETA's set of products and services including software, proactive monitoring and remediation, guest and back-of-the-house support services for hospitality customers, as well as professional services.

For PAETEC, the acquisition is all about driving more business opportunities in its managed service portfolio because they will be able to incorporates XETA's 32 locations and data NOCs into its own managed offerings to serve its growing national customer base.

 "It basically doubles our managed services businesses within PAETEC," said Arunas Chesonis, chairman and CEO of PAETEC in an interview with FierceTelecom. "It really helps us drive more and stronger relationships with our partners because we engage them because they know we can do the whole bundle for our customers."

One of the key relationships that XETA brings to the table is their existing platinum partnership with Avaya.

"At the time of the Nortel/Avaya merger, they were the only guys out there that had the highest level of certification and Nortel and Avaya product sets," Chesonis said.

When the acquisition is complete, XETA will become part of PAETEC's growing Managed Services suite, which includes everything from hosted services, service lifecycle management software and Allworx's IP-PBXs.

But the implications of the XETA acquisition and opening a new data center in Phoenix tie into PAETEC's cloud service strategy that it will formally announce this May.

"What most people today are spending a lot of money on physical colocation and putting some of their equipment and gear there, but increasingly others are starting to spend more money on having some shared computing and shared storage and other applications hosted by other people that aren't critical to their business operations, but that will continue to accelerate," Chesonis said.

He added that if "you're managing and supporting a business' infrastructure at their sites for telecom services and equipment, whether it's Avaya, Cisco or Mitel, those are relationships you can build on for cloud services."  

For more:
- see the release

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