Dimension Data has made big steps into the U.S. market with the acquisition Wednesday of $471 million solution provider Nexus for an undisclosed amount.
The $6 billion global solution provider acquired 100 percent of the company, No. 78 on CRN's SP500 and No. 80 on CRN's Fast Growth 150 list. The acquisition expands Dimension Data's presence in the U.S. market by 40 percent, with the addition of 19 offices bolstering its presence in the West, Southwest and Southeast regions. The Valencia, Calif.-based Nexus has nearly doubled its sales since 2011.
The move is a strategic geographic step for the company, Dimension Data CEO Brett Dawson said in a statement, and will deepen the skills and services needed to support clients. In particular, the deal provides Dimension Data, one of the top Cisco partners in the world, with one of the most highly-respected Cisco solution providers in the U.S. Nexus was named the 2014 Cisco Global Americas Partner of the Year, 2014 Cisco Nationals Services Partner of the Year and 2014 US Cisco Capital Partner of the Year.
"For over three decades, Dimension Data has been building expertise and experience in ICT solutions and services that deliver real business value to our clients. Nexus increases our ability to support both our U.S.-based and global clients with significant West Coast presence," Dawson said in the statement.
The new geographies have very little overlap with the current Dimension Data U.S. presence, Mark Slaga, CEO of Dimension Data Americas, said in a statement.
Just two months ago, Dimension Data made one of the biggest acquisitions in its history with the purchase of NextiraOne, vastly expanding the company's presence in Europe. At the time, Slaga told CRN that the company planned to continue growth through acquisition in the U.S., EMEA and Japan.
Slaga also said at the time that Dimension Data was looking to triple revenue in the U.S. alone, compared with Dimension Data's global goals to double revenue.
In addition to geographic reach, the 657 employees being added to the "Dimension Data family" will bring new skills and services into the company's portfolio, Slaga said. In particular, he said Nexus' expertise in data center, collaboration, enterprise networks, security and cloud will be great benefits to the suite of capabilities already offered by the company.
Nexus CEO Deron Pearson said hes was "very excited" by the acquisition and will continue to lead the Nexus business under Dimension Data, reporting to Slaga.
Singu Srinivas, partner at Waterstone Management Group, a technology business consulting firm, said he recently is seeing more of this kind of consolidation in the solution provider and services market due to a "crowded and mature market," especially where cloud is concerned.
In particular, Srinivas said he sees a lot of acquisitions of solution providers that cater to small and midsize businesses, which is part of the Nexus portfolio.
"Certainly in the large service provider market, we're seeing a rise in acquisitions ... focusing on SMB and midmarket," Srinivas said. "A lot of these companies are independent focused midmarket and small businesses. Being attached with a large infrastructure player ... makes a lot of sense."
PUBLISHED APRIL 23, 2014