PAETEC buys Quagga to beef up its VAR capabilities

PAETEC (NASDAQ GS: PAET) has found a new weapon to target medium and large businesses that desire IP-based voice video systems with the acquisition of Sacramento, Calif.-based systems integrator Quagga.

A major West Coast Avaya value added reseller (VAR), Quagga also provides a suite of business process management, consulting, design and communications systems maintenance services. Although terms of the deal were not revealed, when the acquisition closes, Quagga will become part of PAETEC's Integrated Services Group (ISG) and run by co-founders Ken Apperson and Scott Knorp.

Quagga, which was founded in 2003 by Apperson and Knorp, is the third VAR acquisition PAETEC has made in the last decade. Previously, PAETEC acquired East Florida Communications Inc. and Cisco VAR Data Voice Networks Inc. However, what's different about the Quagga acquisition is that it's focused on medium-sized businesses.

The acquisition has benefits for both PAETEC and Quagga alike. PAETEC will gain a VAR element that's complementary to its telecom services offerings.

"The acquisition of Quagga fits our five-year strategic plan and further extends our ability to fight unfair in the marketplace by offering unique capabilities which our competitors simply can't match," said Douglas Derstine, PAETEC's president of wholesale also overseeing equipment sales in a release. "For nearly 10 years, we've had a robust Value Added Reseller presence in the Eastern United States. The addition of Quagga now allows our equipment capabilities to more geographically mirror those of our national network business."

By becoming part of PAETEC's ISG group, Quagga's co-founder Apperson said in an xchange article that they will gain the "scale it needs to compete with the largest VARs for high-profile accounts" and the credibility of PAETEC's $1.6 billion revenues.

For more:
- see the release here
- xchange has this story

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