Nuvias and Infinigate bosses on bringing two disties together, the future of Nuvias' UC arm and potential for further acquisitions

Today, Infinigate announced it has acquired UK-based value-added distributor Nuvias in a deal which will create a €1.4bn-revenue cybersecuity and secure networking player in Europe.

The CEOs of Infinigate and Nuvias - Klaus Schlichtherle and Simon England respectively - spoke to CRN about what the acquisition achieves and what the market can expect from the enlarged Infinigate business in the years to come.

What was the rationale behind Nuvias and Infinigate coming together?

Klaus Schlichtherle, Infinigate CEO:

The logic was apparent for a long time. The two companies actually have a very good coverage in Europe and there is obviously consolidation happening as in many industries. The logic in putting these two companies together and making something big in Europe is quite apparent.

The talks have been going on for a while, but they accelerated in the last couple of months because we all think it's good timing right now. It's good timing to join forces and create a real pan-European player focusing on security. There's such a complimentary setup in terms of country and vendor coverage and it gives us the ability to operate in three main markets - Germany, the UK and France - on a completely different level because of Nuvias' strengths in the UK, the combined strengths in France where together we are considerably bigger, and obviously the DACH strengths of Infinigate.

So there's a real natural fit for those two companies. And that's why we said at some point in time, ‘hey, let's get serious now.'

Simon England, Nuvias CEO:

We gave ourselves a three-year timeline to decide how we wanted to evolve. We've been making acquisitions, we've been growing very strongly and really succeeding in what we're doing. But relevance plays a role. In our business model, we want to be your preferred partner, we want to be driving relevance and contributing to our partners' business. And I think it's fair to say that's a statement for both organisations and we built our business on doing that.

Relevance is key; think of digital investments, think of services that need to be augmented in a subscription economy, think of the opportunity to enter some of the new threat scenarios and make them truly available for mid-market, not just for enterprise accounts. There's challenges and opportunities where relevance helps.

The fit of the organisations from Nuvias' perspective is super complimentary. We do the same thing with a focus on cybersecurity and secure networking, but we do it with different vendors and with slightly different strengths and different geographies that means we can gain relevance without having to give up focus - and how often does that happen?

Schlichtherle:

The other rationale is we would have competed for the same vendor contracts and maybe for the same acquisition targets. It seemed odd to us that we would go into a competitive situation whereas it actually would be easier for us to join forces and then not compete in those two areas.

I think we can offer the vendor community a much better value proposition as a combined entity and we could also do better future acquisitions and not try to compete in that area, but to basically cooperate.

Nuvias' UC business is not included in the acquisition. Why was that left out?

Schlichtherle:

Infinigate is focused on cybersecurity, secure networking and secure cloud. And we believe that this marketplace is offering so many opportunities so it is better to focus on those areas. We want to have a laser sharp branding around security, so that was the reason.

I think [Nuvias UC] is a great business with really fantastic numbers but it just doesn't fit into our brand image and into our development moving forward in a market which is growing nicely. And we want to keep that focus.

England:

The Nuvias UC business is actually on a really strong roll. They just grew with us the last fiscal calendar year by 72 per cent so the business is flying. It has significant growth opportunity, looking at what's happening from a technology point of view. Rigby Group is a better home as a strategic investor and taking that forward.

How will you approach any overlap between the two businesses?

Schlichtherle:

There's a process in place which means, between signing and closing, there will be a couple of months to go through governmental approval. In that period, we need to act as competitors, and we will. But moving forward we will look into how we can move together as a joint company.

We have offices in Hamburg, for example, which are very, very important for us so we can cover the north [of Germany] a bit better. We have many new countries joining us, which is also very good. We will build a joint operation moving forward, but we are in such a growth environment that the overall topic for us is how can we generate profitable growth together, grab the opportunities moving forward and have the appropriate organisation plus all the people with us to really keep on having the same momentum we have individually right now, but together.

Will Nuvias' branding change post acquisition?

Schlichtherle:

We will over time move to the Infinigate brand which will probably take 12 months. Obviously, the Nuvias brand is well known in many markets, but in the end, we are going to move forward with the Infinigate brand. We will brush up the Infinigate corporate design a little bit, because I think Nuvias looks a bit better than Infinigate, to be honest. We want to take the best of both worlds and come up with something which uses the Infinigate colours, corporate design and the tagline, and use Nuvias' expertise, who has done a better job there, from my perspective. I'm not downplaying what Infinigate is all about, but it looks a little bit dusted. So we can use this as an opportunity to polish it up.

England:

Infinigate is very much a forward-looking company, as Nuvias has been a very forward-looking company. And, moving ahead, I think it's important we make sure that translates into what the brand stands for. It's difficult for people, and for customers and vendors, to give up a brand that they've developed a connection with. I think it's fair to say we want to really make sure that brand equity that's behind Nuvias is successfully transferred into a richer brand equity of an expanded Infinigate brand.

Is there any vendor overlap between Infinigate and Nuvias?

Schlichtherle:

There's almost no overlap. I would say very, very little. When you consider that as a combined entity we will be €1.3bn, it's insignificant, very small.

England

I think we have two vendors in Germany and two vendors in the UK, and that's it. If you look at the growth path that both organisations are on and the need for people which is happening in the market, there is no concern of the synergies and there's nothing that will be of concern to our people or to our customers.

How aggressively will Infinigate continue to grow post acquisition?

Schlichtherle:

It's not the end - we will certainly develop Infinigate in the next couple of years quite aggressively to drive the relevance and the size of the business. Size is not everything, as we want to keep our heads and the heritage to serve our customers as well as possible, and we have a reputation of serving small and medium sized customers very nicely. And we will not forget that heritage.

But it is a matter of fact that you need to stay relevant in the market. And that would entail long term that we go for other acquisitions as well on top of that, which Bridgepoint is enabling us to do. And I'm very grateful; they support us really, very nicely in that development. So it's not the end yet, there will be more to come.

What's Infinigate's largest country by revenue post acquisition?

Schlichtherle:

Germany, because Nuvias also has significant business in Germany so those two entities put together, with the Munich office and now the Hamburg office of Nuvias, will mean it's still the biggest - by far actually.

But the biggest [expansion through the acquisition] is the UK for sure. It's a great business there and they've been doing a nice job. With the revenue and the size we had in the UK, we were nowhere, so with Nuvias it's a different ballgame. And I'm really grateful for that.