In a two-part acquisition, Dimension Data will acquire European solution provider NextiraOne to grow its geographical presence in the region and make big steps toward its goal of doubling revenue over the next five years.
The acquisition is one of the largest buys in the company's history, Dimension Data said, although the amount of the purchase price was undisclosed. Over the next year, the $5.8 billion solution provider is looking to double its revenue from $6 million to $12 million, and this acquisition and geographical growth is part of that move by almost doubling revenues in Europe, Dimension Data America's CEO Mark Slaga told CRN.
"It is part of the overall global geographic strategy plus the portfolio strategy," Slaga said.
The deal, effective immediately, will take place in two parts, the first of which acquires NextiraOne's businesses in Austria, Belgium, the Czech Republic, Germany, Hungary, Ireland, Luxembourg, the Netherlands, Poland, Portugal, Slovakia, Spain and the United Kingdom. In mid-2015, Dimension Data will complete the second part of the deal, acquiring Nextira's business in France and Italy, pending performance conditions being met.
Along with further extending Dimension Data's geographic reach into Europe, the deal adds 1,850 employees and more than 43,000 private and public sector clients across the region. The big jump in employees means that Dimension Data was extra careful to make sure it was a cultural fit before adding them to the "Dimension Data family," Slaga said. The employees come from skill sets that "extend and complement" the current company offering, he said.
The move will help partners that are looking to break into the EMEA marketplace or have global partners with a foothold in multiple marketplaces, said Willem Hendrickx, senior vice president EMEA at Riverbed Technology, a Dimension Data partner.
"If you really look at the EMEA customer base as well as the North America base, they're all global, they're looking for a partner that can deploy their solutions globally," Hendrickx said.
In particular, Hendrickx said that the six countries in Eastern Europe added to the Dimension Data portfolio will be crucial going forward. He said that many companies, such as banks, are looking for solution providers, especially with data centers, in Eastern Europe. It will help his own company reach into the area, Hendrickx said.
As more and more companies go global, Hendrickx said that he sees them looking for a solution provider who can stretch across regional borders. He said that many of the providers in Europe can't provide the range of services that Dimension Data does, with many moving instead to focus on niches. For companies looking to expand to Europe from North America, or vice versa, it makes it a lot easier to have a single solution provider, he said.
"You need to be there and you need a service organization that can help that partner across the board," Hendrickx said. "I truly believe that it's always better to have one single contact and one single contact to do that. I believe they can do that."
Going forward, Slaga said that Dimension Data plans to continue on the acquisition path as well as encourage organic growth from within to reach its goal of doubling revenue. Slaga said that the company's growth is focused in Europe, the U.S. and Japan. He said that while the company is looking to double worldwide, it also hopes to triple revenue in the U.S.
"Knowing that a partner will double their revenue in a couple of years, it's easier to be strategic with them than someone who doesn't want to double. Our ambitions are in line with each other,"Hendrickx said.
PUBLISHED FEB. 5, 2014