Carousel Industries is an IT services company that has gone through multiple acquisitions over the years. Most recently in 2017, Carousel Industries was acquired by Extreme Networks, a company that provides software-driven networking solutions. This acquisition allowed Extreme Networks to expand its capabilities in key areas like cloud, security, and unified communications.
Background on Carousel Industries
Carousel Industries was founded in 1992 and is headquartered in Exeter, Rhode Island. The company focuses on providing IT services and solutions for mid-market and enterprise organizations across a variety of industries. Some of their key technology focus areas include:
– Cloud computing services
– Managed services
– Unified communications
– Contact center solutions
– Network optimization
Over the years, Carousel Industries grew both organically and through strategic acquisitions. By 2017, they had grown to over 1,500 employees and were generating approximately $500 million in annual revenue. The company had a strong presence across the Northeast, mid-Atlantic, Southeast, and Midwest regions of the United States.
Some of Carousel’s major acquisitions over the years included:
– 2008: Acquired Infinity Network Solutions
– 2012: Acquired Activation Technologies
– 2014: Acquired Enterprise Systems Group
– 2016: Acquired Technica Corporation
These acquisitions allowed Carousel Industries to expand their geographical reach, technical capabilities, and customer base. However, even with these acquisitions, Carousel was still considered a relatively small player in the competitive IT services market.
Extreme Networks Acquisition
In 2017, Carousel Industries was acquired by Extreme Networks in a $175 million deal. Extreme Networks is a publicly traded company that offers software-driven networking solutions for enterprises, data centers, and service providers.
Some key factors that led Extreme Networks to acquire Carousel Industries:
– Expand presence in key verticals – Carousel had an established presence in healthcare, financial services, retail, government, and education sectors. This expanded Extreme’s reach into these important verticals.
– Grow services revenue – Carousel generated about 50% of revenue from services, helping Extreme grow its services business.
– Cross-selling opportunities – The acquisition created opportunities to cross-sell products and services across the combined customer base.
– Cloud and security capabilities – Carousel brought cloud management expertise and security solutions to help Extreme expand its capabilities.
– Talent acquisition – The acquisition allowed Extreme to gain Carousel’s experienced sales, engineering, and services professionals.
Details of the Acquisition
In June 2017, Extreme Networks announced it had entered into a definitive agreement to acquire Carousel Industries. Key details of the acquisition included:
– Purchase price was $175 million in cash
– Financed through Extreme’s existing cash balance and credit facility
– Expected to close within 60 days of announcement
– Carousel would operate as a division of Extreme post-acquisition
The Extreme Networks CEO at the time, Ed Meyercord, had this to say about the rationale behind the deal:
“The acquisition of Carousel adds key services expertise to our portfolio that will enable us to deliver increased value to our customers. Carousel expands our presence in key verticals like healthcare and strengthens our professional services capabilities as we solve complex problems for customers. We are focused on expanding our software and services revenue and this acquisition puts us firmly on the path to generating over 50% of our revenue from software and services.”
Post-Acquisition Integration
After the acquisition was completed in August 2017, the focus shifted to integrating Carousel Industries into Extreme Networks and realizing the benefits of the combination.
Some of the post-acquisition integration efforts included:
– Establishing an integration management office to oversee integration activities
– Combining sales, marketing, and services resources to leverage cross-selling opportunities
– Integrating systems, tools, processes, and policies to align operations
– Providing training and change management support to help employees adapt
– Unifying branding and marketing as one company
– Consolidating facilities where possible for operational efficiencies
In Extreme’s quarterly earnings calls after the acquisition, executives highlighted that cross-selling efforts were progressing well. They noted sales wins attributable to the Carousel acquisition and that they were actively cross-training sales teams to take advantage of expanded capabilities.
Within approximately one year of closing the acquisition, Extreme indicated that Carousel was performing ahead of initial expectations. The acquisition helped produce strong double-digit services revenue growth for Extreme Networks. Extreme CEO Ed Meyercord credited the Carousel acquisition with playing a major role in Extreme’s expanding position in the services market.
Carousel Industries Today
Currently, Carousel Industries continues to operate as a division under Extreme Networks. While it has been fully integrated operationally, the Carousel brand name lives on as Extreme’s professional and managed services organization.
Carousel maintains a significant presence in New England, along with regional offices throughout the US. The company’s solutions and services span cloud, cybersecurity, networking, unified communications, managed services, and more.
Some details on Carousel Industries today:
– Remains headquartered in Exeter, Rhode Island
– Employs over 1,000 people
– Operates as the services division of Extreme Networks
– Focuses primarily on mid-market and enterprise customers
– Delivers services across IT infrastructure, security, cloud, and communications
– Cisco named Carousel Industries as Americas Services Partner of the Year in 2021
– Actively hiring technical and services roles to support continued growth
So while Carousel Industries no longer exists as a standalone company, its brand, expertise, and regional presence endures as part of Extreme Networks thanks to the strategic 2017 acquisition. The deal expanded Extreme’s customer reach, solutions portfolio, and services capabilities – positioning the combined organization for continued innovation and market growth.
Conclusion
In summary, Carousel Industries was acquired by Extreme Networks in 2017 for $175 million. This acquisition allowed Extreme Networks to expand its presence in key vertical markets, grow its services business, and gain talented professionals – all while providing Carousel with the resources of a larger public company. Since the acquisition, Carousel operates as Extreme’s services division under its established brand name. The strategic deal equipped Extreme Networks to become an end-to-end networking and services leader – a transformation that was strengthened by bringing the capabilities of Carousel Industries into the fold through acquisition.