It was a little over a year ago when Blue Hill Research wrote about “The $500 Billion Communications Race in TEM.” Back on December 9, 2013, the investment firm Clearlake Capital had announced the creation of Calero, which aggregates the businesses of three veteran TEM organizations: Veramark Technologies, Movero, and PINNACLE. The consolidation is financed by Wells Fargo Capital Finance and Stellus Capital Management. Mooreland Partners provided mergers and acquisitions advisory services.
Today, Asentinel, a leading provider of Telecom Expense Management (TEM) software and complementary services, announced that it has been acquired by Marlin Equity Partners, a global investment firm with over $3 billion of capital under management, and an extensive and successful track record in the technology industry of over 85 acquisitions. The following quote from Asentinel CEO Tim Whitehorn describes the potential opportunity:
“Since 2002, Asentinel has been a technology and service leader in the TEM market. With Marlin as our new strategic partner, we will aggressively pursue opportunities for innovation and expansion that will redefine the benefits of TEM solutions, and further enhance the value we deliver to our clients.”
What makes Asentinel unique is that it is a leading TEM provider who competes aggressively against the likes of the largest industry players such as Calero, Tangoe, and WidePoint, but, unlike the aforementioned, is a privately held company that has not previously grown through acquisition. Asentinel serves a global client base of approximately 200 customers (with global Fortune 500 companies in the mix) across a variety of industries, which include banking, technology, services, retail, energy, manufacturing, logistics, healthcare, and insurance. Asentinel also owns three key United States patents in TEM (U.S. Patent Nos. 7,340,422, 7,805,342, and 8,712,878), covering over 100 claims.
This acquisition by Marlin Equity Partners is further validation of Blue Hill’s position that the Telecom Expense Management (TEM) industry is consolidating into distinct groups in order to compete globally. What was once call accounting, wireline, wireless, and billing has truly morphed into new go-to-market opportunities. Blue Hill sees terms like “Communication Lifecycle Management” and “Technology Expense Management” as keys to this market, and to future market opportunities to manage corporate wearable technology assets and the Internet of Things (IoT).
The keys to success for the evolution of TEM will be for companies in this industry to have a full portfolio of technology management, asset management, cloud SaaS capabilities, and a global footprint made up of key strategic partnerships or growth by acquisition and consolidation. The latter of these is the path that current market leaders Tangoe, WidePoint, and Calero have shown in their market strategy over the past several years. As I stated previously, this is a testament to the activity in the industry, given that each of their acquisitions had themselves previously acquired smaller vendors of their own.
Companies previously content to leverage partners to fill gaps in service, capability, or vertical expertise are increasingly finding that, strategically, it is more valuable to own these capabilities. By combining wireless, IT management, sourcing, and consulting skills in-house, TEM companies continue to expand their competencies and market expectations.
Blue Hill expects that Asentinel will be able to pursue new opportunities based on its acquisition of Marlin Equity Partners, including, but not limited to, managed mobility, TEM outsourcing capabilities, larger IT and technology expense management efforts, IT and facility-based analytics, and global TEM implementations. As a result, the TEM industry will evolve as Asentinel both pursues these opportunities and has the ability to partner with Marlin Equity Partners’ portfolio companies in adjacent spaces such as IT services, data center, project management, and performance management.
For more information on the Asentinel acquisition, please contact Blue Hill’s research team directly at firstname.lastname@example.org.