Blockbuster merger in the Canadian channel

Two CDN Top 100 Solution Providers are set to combine operations. Toronto-based Scalar Decisions Inc. and Calgary’s Mainland Information Systems Ltd., have confirmed a merger agreement. Officials from Scalar indicated that this deal will result in zero headcount reduction and could possibly place the company near the Top 5 of the CDN solution provider rankings.

Currently Scalar is No. 11 on the CDN Top 100 list up from 15 last year with revenues between $150 million to $175 million. Mainland has been growing rapidly in the last five years and has risen to No. 16 on the list with revenues between $100 million to $125 million.

This merger has the potential of becoming one of Canada’s largest solution providers. What this also does is give both organizations national prominence since Mainland operated out west, while Scalar was predominately and Eastern-based company. Scalar does have offices in Winnipeg, Calgary and Vancouver. Meanwhile, Mainland has offices in Edmonton and Vancouver.

The transaction is expected to close later in July. Scalar approximately 14 months ago acquired 3vis, a Montreal-area solution provider that specializes in digital entertainment creation and media.

According to Scalar, the transaction is mutually beneficial to employees and stakeholders and enables the newly created company to provide infrastructure, security and cloud solutions across Canada. For Mainland, the company’s solutions portfolio and technical bench strength gets dramatically improved by adding the Scalar team.

Paul Kerr, the CEO of Scalar, has said the integration of the two companies will evolve over time and the two brand names will continue to be used in the near-term.

Kerr will continue as CEO, while Jason Born serve as president of Mainland. The leadership teams of both Scalar and Mainland will work together to identify and implement integration opportunities. And, the newly formed company will be looking to add 50 more positions this year.

“We’re very pleased to welcome the Mainland team to the Scalar family and to extend our reach in the key Western Canada marketplace. The acquisition of Mainland is a nice fit for us as our companies have many similarities. Both companies are high performers, employ some of the industry’s best people and have strong, long-term client relationships,” Kerr said in a statement.

“I’m excited to bring together our teams and build a truly national IT solutions company. We’ve found a great cultural fit and set of shared values with Scalar, which was an essential component of this transaction and will be a big advantage to our clients and employees,” Born said, also in a statement.

White the Scalar/Mainland merger is the biggest so far this year in the channel. It’s far from the only merger acquisition made in the channel in 2015. In fact, 2015 has been an unprecedented year for mergers and acquisitions with solution providers.

Just last month Winnipeg-based solution provider Powerland took a major step to achieving its goal of expanding its service coverage across the Prairie Provinces with the acquisition of FACT Computers in Saskatchewan.

WBM Office Systems, a Top 100 solution provider announced the acquisition of Agilisys, an F5 solutions and infrastructure management services provider in western Canada.

IT Weapons Inc. announced its acquisition of fellow solution provider Collins IT. The two companies, both based in Brampton, Ont.

Internet service provider TeraGo Networks Inc. purchased of Kelowna, B.C.-based cloud provider RackForce for $33 million.

Another merger happened with Insite Computer Group Inc. and Edmonton-based F12 Networks Inc.

CompuCom sold off its software licensing business to SoftwareOne.

Markham-based IT provider BDO Solutions merged with Systemgroup Inc.

And, it all got started in February when CDN Top 100 Solution Provider Quartet Service Inc. of Toronto acquired En Vogue Computers also of Toronto.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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