Carousel Industries Closes Atrion Acquisition To Become $525M Solution Provider Powerhouse

Fast growing Carousel Industries completed its acquisition of fellow Rhode Island solution provider Atrion on Tuesday, aiming to become a $1-billion company with its new Cisco practice and services focus.

For years, Exeter, R.I.-based Carousel refrained from becoming a Cisco partner, but the solution provider is now making the leap thanks to Atrion.

"By not having Cisco, you're not able to say 'yes' to a lot of things. So this really plugs a hole for us nationally and with Atrion's size and scale, it's really going to help sales," said Carousel CEO and co-founder Jeff Gardner, in an interview with CRN. "We've been working together for two or three months now and we have a funnel in excess of $35 million with 75, 80 opportunities. So closing that business should be great for us."

[Related: 10 Things Partners Should Know About Cisco's $2 Billion Security Business]

Terms of the deal were not disclosed.

Carousel, No. 64 on the 2016 CRN Solution Provider 500, now has annual revenues topping $525 million and more than 1,400 employees in 27 locations nationwide -- forming one of the largest and fastest growing privately held IT services firms in the country.

Atrion derived about half of its $140 million in sales from Cisco products and has a robust product and managed services practice around the networking giant. Both companies specialize in clients with 250 to 10,000 seats, and are strongest in the Northeast.

Carousel is a top Avaya and Juniper Networks channel partner and with the addition of Atrion, the company is seeking to eventually become a top Cisco partner as well.

"We do an awful lot in managed services and adding the Cisco expertise has always been a little bit of a challenge for us. So when we talk about managed services and cloud moving forward -- Atrion and Cisco will help us plug a couple of those holes," said Gardner.

Last year, for the first time in Carousel's 24-year history, service revenue outpaced product sales – 51 percent to 49 percent. Gardner said that gap will widen next year, projecting that 55 percent of Carousel's revenue will be derived from services, with 45 percent coming from products.

"In the market today, we're trading large premise sales for recurring revenue. So the $1 billion is a nice goal to have -- we certainly have a shot at that," said Gardner.

In June, Carousel also revealed that it acquired Source Inc., a Dallas-based solution provider and leading Avaya product dealer, in a move that expands Carousel's asset management and inventory logistics solution and service offerings. Source was the fifteenth largest Avaya product dealer in the U.S. and owned more than 10,000 customer implementations nationwide.

"We've had Source for three months now, they just had their largest sales quarter that they've had in their history – so we're off to a great start there," said Gardner.

Gardner said Carousel will continue to look at strategic acquisition opportunities in 2017.

"We'll be looking around the security industry and storage industry [for acquisitions] that would make sense for us and our customer base," he said.

Since 1992 Carousel has grown by an average of 30 percent annually and has more than 6,000 customers, including 35 of the Fortune 100. The Atrion brand name will be maintained, along with its offices in Warwick, R.I. and Flemington N.J.