10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
From Sphinx to VADition and Ignition, the UK channel has always had a bustling cohort of cybersecurity-focused value-added distributors.
Without these market makers, the likes of Fortinet, Palo Alto Networks or Meraki arguably wouldn't have enjoyed such a swift rise to ubiquity.
Many, however, burn brightly for a few years before joining forces with a larger distributor (or in one or two cases private equity), with the entrepreneurs behind them often repeating the cycle several times.
Going by revenues, Cloud Distribution is the fourth largest UK security VAD to sell up in recent times, with revenues of around £28m. Here we count down the top 10 from the last 12 years. How many do you remember?
10. Cohort Technology
Size: Enterprise value of £5m
Acquirer: Exertis (then Micro-P)
Year acquired: 2013
Time from inception to sale: 6 years
Deal rationale:
Founded in 2007 by former equIP MD Grahame Smee, Cohort Technology counted Stonesoft, Forescout and ShoreTel among its key vendor franchises.
Exertis' parent DCC - whose distribution activities were then trading through the Micro-P and Gem brands - described Cohort at the time it acquired it in 2013 as "a modest business" that would nonetheless "strengthen significantly" its UC and security offering. Cohort's revenues weren't disclosed, but the deal had an enterprise value of £5m.
What's happened since?
DCC's distribution business - now known as Exertis - has more than doubled in size since 2013, recently posting 2021 revenues of £4.5bn.
Serial entrepreneur Smee, meanwhile, went on to found and sell another VAD in the form of 4SEC Group.
Who was the £10m-revenue security VAD that sold up in 2020? See next page for more
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
9. AlphaGen
Revenues: £9.6m (AlphaGen only)
Acquirer: QBS Technology Group
Year acquired: 2020
Time from inception to sale: 4 years
Deal rationale:
Having sold his previous distribution venture, Arc Technology, to Exclusive Networks in 2009, Stuart Reay and his former colleagues bounced back with another security VAD, AlphaGen, in 2013.
The Thycotic and Snow Software partner effectively sold up twice, first to Grahame Smee-owned start-up 4Sec in 2017, and then again as the key brand of 4Sec when it was bought by QBS Technology Group last March.
"We're highly focused on enterprise software, so a company like AlphaGen, which is incredibly fast growing with a focus on security and value-add, complements everything that we have already," QBS CEO Dave Stevinson (pictured) said at the time.
What's happened since?
Having left the business last year, Alpha Gen MD Stuart Reay is currently "recharging", according to his LinkedIn profile.
QBS has ploughed on with its international expansion drive by acquiring in Germany, and now has a revenue runrate topping £125m.
Who was the £13m-revenue security VAD that sold up in 2012? See next page for more
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
8. Vigil Software
Revenues: £12.6m
Acquirer: Infinigate
Time from inception to sale: 11 years
Year: 2012
Deal rationale:
Founded in 2001 by Alex Teh and Murray Pearce, London-based Trustwave, SecurEnvoy and Wave Safend distributor Vigil was turning over £12.6m at the time it was acquired.
Having spent years running the rule over various UK targets, Switzerland-based Infinigate finally found its "soul mate" in the 30-strong outfit in 2012.
"For three years, we have been analysing UK companies and I was not happy with the results. When I found Vigil, it was the same company [as us] with a different name," Infinigate CEO David Martinez told CRN at the time.
What's happened since?
Teh left Infinigate UK in 2016, and is now running New Zealand VAD Chillisoft, while Pearce (pictured) moved on last year after 19 years in the hotseat.
Recently taking on a new private equity owner in Bridgepoint, Infinigate is now a €570m-revenue distributor with 450 staff. Its UK arm turns over north of £30m.
Which £14m-revenue security VAD found a trade buyer in 2010? See next page for more
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
7. Codework
Revenues: £14m
Acquirer: Altimate (then part of DCC Group)
Year acquired: 2010
Time from inception to sale: 13 years
Deal rationale:
Codework had built up a strong reputation as a Symantec distributor in the noughties, particularly around the vendor's Altiris IT management software offering. It was only a matter of time before a bigger VAD like Altimate (part of DCC Group) came knocking.
"We are delighted to be joining Altimate, a successful operation within a large and financially stable group," Codework founder and MD Divyesh Lakhani said at the time of its acquisition in 2010.
What's happened since?
Lakhani (pictured) went on to found another security VAD - Distology - along with Hayley Roberts in 2015.
Alimate dropped the Codework name in 2011 before its owner DCC Group promptly sold Alimate to Arrow ECS in 2012. Arrow ECS closed the Stockport office Codework called home in 2014.
Which £15m-revenue security VAD gave Exclusive Networks its first UK foothold in 2009?
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
6. Arc Technology
Revenues: £15m
Acquirer: Exclusive Networks
Year acquired: 2009
Time from inception to sale: 15 years
Deal rationale:
Despite launching a local office a year earlier, Exclusive Networks was struggling to gain a UK foothold back in 2009.
Buying Chesterfield-based Arc gave the then fledgling Paris-based VAD a ready-made, £15m-revenue UK operation complete with vendor franchises including McAfee and Safenet.
"We realised after a few months that it is difficult to start from scratch in the UK and have credibility with vendors," Exclusive's then CEO Olivier Breittmayer told CRN at the time.
What's happened since?
Exclusive went on to acquire VADition - and a host of other disties around the world - and is now a €2.6bn-revenue distribution juggernaut.
Arc's directors, including MD Stuart Reay (pictured), meanwhile went on to found and sell another VAD in the shape of AlphaGen.
Which £26m-revenue security VAD is gunning for European growth after finding a private equity investor in February? See next page for more
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
5. Distology
Revenue: £25.8m
Acquirer: NorthEdge Capital
Year: 2021
Deal rationale:
Founded in 2014, this Okta and LogRhythm distributor has grown from zero to £26m revenues in the space of seven years.
Talking to CRN at the time it landed investment from NorthEdge Capital in February, Distology CEO Hayley Roberts said taking on private equity backing would help it step up international expansion, make acquisitions and expand its senior management team.
What's happened since?
Distology's ambition is now to become "Europe's leading value-added distributor of cloud-based cybersecurity software", and it this month added to its vendor portfolio by inking a partnership with passwordless authentication vendor Beyond Identity.
Talking to CRN for the upcoming CRN Distribution Report, Roberts stressed that a trade sale is "not something I have an appetite for - certainly not in the next five years or so", as she laid out her plans for growth.
Which £28m-revenue outfit is the latest UK security VAD to sell up? See next page
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
4. Cloud Distribution
Revenue: £28.3m
Acquirer: Nuvias
Year: 2021
Time from inception to sale: 12 years
Deal rationale:
Founded in 2009 by Greg Harris and Scott Dobson, Cloud shot to success partly on the back of its partnership with Meraki. Today it counts Pulse Secure, Vectra, Extreme Networks and Arista among its key vendors, turning over £28.3m in its year to 31 December 2020 (according to figures it shared with us).
Cloud had grown to the scale that made it a natural target for a larger trade buyer, with Rigby Private Equity-backed Nuvias duly sealing a deal with the Newbury-based distributor today.
Nuvias said the move would expand its emerging technologies business in the UK.
"For an emerging vendor to move from almost nothing to its first £1m actually requires a lot more hand holding than most larger distribution organisations can do. We have been doing some of this within Nuvias; it's not foreign to us, but we believe we can step up our investment to really be able to engage in those emerging technologies," Nuvias CEO Simon England (pictured) told CRN.
What's happened since?
With the ink still drying on the deal, who can say? But Nuvias said it plans to operate Cloud as separate business for at least the next few years, with its branding changing slightly to 'Cloud Distribution, a Nuvias company'. Members of Nuvias' executive team will join Cloud's board, but the VAD will continue to be run and managed by its existing team.
"We will be looking for obviously where we can benefit from each other. We want Cloud Distribution to keep on doing what they were doing, but also see how we could fuel the business further and add to Cloud Distribution's remit," England said.
Which £34m-revenue VAD was sold in 2011 by a duo of serial entrepreneurs? See next page
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
3. VADition
Revenues: £34m
Acquirer: Exclusive Networks
Year: 2011
Time from inception to sale: Just under 5 years
Deal rationale:
Having sold their previous VADs Data Connectivity and equIP in 1998 and 2005, respectively, serial channel entrepreneur duo Neil Ledger and Ian Morris founded VADition in 2006.
Within five years of VADition's inception, the Palo Alto Networks, Fortinet and Isilon partner was turning over £34m and the rumour mill was already linking it with a possible sale.
And it was France-based Exclusive Networks that swooped for the firm, just two years after its first UK acquisition in the shape of Arc Technology.
"There are so many similarities between the two organisations. Both started around the same time, both focus on innovative and disruptive technologies, and both share exclusive and preferred partner status with vendor organisations." Exclusive's then CEO Olivier Breittmayer tol CRN at the time.
What's happened since?
Along with Arc, VADition formed the basis of Exclusive's now £340m-revenue UK operation.
Ledger (pictured) went on to receive the British Empire Medal in the Queen's Birthday Honours List, recognising his efforts in raising over £300,000 for over 40 local and national charities.
A co-founder of Kite Distribution sold his previous £55m-revenue security VAD to Arrow in 2010. Who was it? See next page
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
2. Sphinx
Revenue: £55m
Acquirer: Arrow ECS
Year: 2010
Time from inception to sale: 24 years
Deal rationale:
At the time it sold up to Arrow ECS, Sphinx was the largest UK-HQd security VAD (Computerlinks was bigger - but based in Germany), with revenues of £55m and vendor partnerships with the likes of RSA Security, McAfee and Juniper Networks.
Arrow said acquiring the Nottingham-based outfit would hand it a "leadership position" in the UK security and networking space.
What's happened since?
Sphinx MD Mark Hatton (pictured) left at the time of its sale to Arrow, and in 2014 founded Kite Distribution with former colleagues Dave Marshall and Kip Tumber.
Arrow ECS is today a £1bn-revenue business in the UK, counting Check Point, Citrix, Fortinet, Palo Alto Networks and VMWare among its vendors. It closed the Nottingham office it inherited from Sphinx in 2017.
The largest UK security VAD to sell up in recent times had revenues of £70m. See next page to discover its identity...
10 biggest UK security VAD acquisitions of recent times
Cloud Distribution today announced its acquisition by Nuvias. But it’s not quite the biggest security VAD sale or investment of the last decade or so. How many of these do you remember?
1. Wick Hill
Revenue: £70m
Acquirer: Rigby Private Equity
Year: 2015
Time from inception to sale: 39 years
Deal rationale:
Having undergone several reinventions since it was founded in 1976, by 2014 Wick Hill was the UK's largest independent security VAD, turning over £70m in the UK alone and boasting vendor partnerships with the likes of Check Point, WatchGuard and Kaspersky.
In the words of chairman Ian Kilpatrick, the Woking-based outfit had become a "tall poppy" in the UK and Germany and required investment to fund its EMEA expansion.
Enter Rigby Private Equity, which selected Wick Hill as the first of three major UK acquisitions that would form the basis of its new ‘Nuvias' distribution brand.
What's happened since?
Nuvias went on to acquire storage distributor Zycko and Siphon, and is now a £400m -revenue pan-European gorilla. Six years on from acquiring Wick Hill, it moved today to acquire a second UK security VAD in the form of Cloud Distribution.
The Wick Hill brand was retired in 2017, with Kilpatrick (pictured) himself stepping back from the business last year.