Carousel Snaps Up UC-Focused Source Inc., Expanding Inventory Logistics, Warehouse Capabilities

Solution provider Carousel Industries has 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.

The Source acquisition comes on the heels of Carousel's news earlier this month that it had agreed to buy fellow Rhode Island solution provider Atrion to help it more rapidly scale its nascent Cisco practice.

Terms of the Source acquisition, which closed last Wednesday, were not disclosed.

"There are a lot of great synergies around this," said Bill Thompson, Carousel senior vice president of products and services, in an interview just after he got off a plane Friday from Dallas where he met with Source executives.

[Related: Q&A: Carousel Execs On The Cisco Partnership And How OpEx Models Are Changing The Channel]

He described the acquisition as "an opportunity to increasingly drive value propositions for our customers. Drive customer experiences that are meaningful and provide a portfolio of services that's rich and allow our customers, against a very complex technology landscape, to really move forward with confidence."

Carousel, a $400 million solution provider powerhouse, is striving to become a $1 billion solution provider through organic growth and acquisitions such as Atrion and Source.

Source, like Carousel, is privately held and doesn't disclose its revenue. While the acquisition will make a "meaningful contribution" to Carousel's revenue, Thompson said, the real attraction for Carousel is the strategic value of Source's product and service portfolio, as well as the growth opportunities its customer base provides.

"We see huge growth potential," said Nikki Nemarich, Carousel marketing vice president, in an interview, noting the opportunities Carousel now has to bring its data and networking product and service offerings to Source customers. Geographically, the acquisition also will expand Carousel's presence in the Southwest.

Source, founded in 1971, is the 15th largest Avaya product dealer in the U.S. and has more than 10,000 customer implementations nationwide. The company's products and services include unified communications, asset management and inventory logistics solutions, e911 implementations, disaster recovery and other IT services, and a technology refurbishment and repair business.

"Source has earned a sterling reputation from both technology partners and clients as a nimble, customer-focused firm, and we are pleased to add their strong and respected management team, deep customer base and a new capability in inventory logistics," said Carousel CEO Jeff Gardner, in a statement issued Monday on the acquisition.

"The key piece that really differentiates Source in the marketplace, [and] that makes them such an attractive company for Carousel, is the innovation they have done behind their logistics services, their warehousing and their refurbish capabilities," Thompson said.

In addition to its Avaya relationship, Source works with voice, video and data technology and products from Microsoft and Cisco.

Source has its headquarters and a 250,000-square-foot, ISO:9001-certified distribution and repair facility in Dallas, as well as sales offices in Texas and Missouri. The company has more than 100 employees who, along with President Bryan Davis, are joining Carousel immediately.

Exeter, R.I.-based Carousel, No. 64 on the 2016 CRN Solution Provider 500, already has deep ties to Avaya in the unified communications arena and the acquisition of Source will strengthen that relationship.

The Source acquisition provides "the opportunity to continue to expand and grow the partnership and the strength of our relationship with Avaya," Thompson said. He acknowledged that with Carousel working with competitors Avaya and Cisco, his company would have to be "sensitive to the dynamics in play."

"It's all about ensuring for our customers that we have the ability to solve their business needs," Thompson said.

"Right now we're witnessing a massive shift in how our clients adopt omni-channel communications across multiple platforms," Source's Davis said in a statement. "By joining Carousel, Source will be better able to deliver the optimal applications, systems and platforms customers require to navigate through these dynamic transformations and achieve their desired outcomes."

Thompson said an "integration framework" for merging Source with Carousel is in place and the two companies are now working through the details of combining their operations, as well as their product and service portfolios. Carousel, for example, does have a presence in Texas and there could be some consolidation of facilities, Thompson said.

"The integration plans, the integration program, have been put together and now we're working through what is the best way for us to integrate the organizations in a way that maximizes our combined capabilities," Thompson said.

The companies are also working out the details of the combined companies' management and organizational structure, including what role Davis will play at Carousel once the integration is complete. "He's certainly going to have a role within the organization," Thompson said, noting that Davis will help Carousel get the most out of Source's core competencies, but also "plug into" Carousel's broader operations.