Infinigate to 'take breath' before shifting M&A focus to bolt-on deals, UK boss reveals
“The goal of the organisation globally is to be the number-one cyber VAD. We’ll continue to look to acquire, but we want to make sure anything we do is now complementary,” Infinigate UK MD Justin Griffiths tells CRN
Infinigate isn't ruling out further "complementary" acquisitions in the UK as it pursues its goal of becoming the world's number-one cybersecurity distributor.
That's according to the newly crowned managing director of Infinigate's enlarged UK business, Justin Griffiths.
Infinigate's acquisition of Nuvias - which received EU clearance in October - created a €270m-revenue operation in the UK, with its purchase of Microsoft cloud distribution Vuzion in August adding a further €50m in revenue.
The latter will continue to run independently under existing Vuzion MD Michael Frisby, while Infinigate and Nuvias' UK teams have been combined under the leadership of Infinigate incumbent Griffiths (whose Nuvias counterpart, Lee Driscoll, is leaving the firm).
M&A play
Talking to CRN, Griffiths said that the two acquisitions give Infinigate three revenue pillars in the UK, namely cybersecurity (Infinigate), secure networking (Nuvias) and secure cloud (Vuzion).
But Griffiths stressed that the VAD is "not stopping when it comes to further potential acquisitions", both in the UK and elsewhere.
"The goal of the organisation globally is to be the number-one cyber VAD," he said.
"We're taking a breath. If you add up [Middle Eastern acquisition] Starlink, [French purchase] D2B, Vusion and Nuvias - which all happened in the space of 12 months - we've moved from a €780m business to a €2.2bn business.
"We'll continue to look to acquire, but we want to make sure anything we do is now complementary and an addition to the technology stack."
As a yardstick, Exclusive Networks - which is the world's largest independent VAD - generated revenues of €3.1bn in the first nine months of 2022 and claims it is on course for a €4.2bn haul for the full year. The Paris-based outfit IPOd last September, while Switzerland-based Infinigate took on a new private equity backer last March.
Exclusive and Infinigate have emerged as two VAD superpowers in a select squad of European-HQd disties with a €2bn-plus top line (see chart, bottom). Switzerland-based broadliner ALSO is the only one to turn over more than €10bn, while UK/Irish duo Westcoast and Exertis are now €5bn-plus outfits following M&A moves in Germany and the US, respectively.
Vuzion fusion
Looking at the enlarged UK business, Griffiths said that Nuvias hands it "scale and power". While Infinigate's largest vendors were Progress Software and SonicWall, Nuvias held bigger partnerships with the likes of Juniper Networks.
But he described Vuzion, a Microsoft CSP with its own platform, as "the real winning piece", adding that the priority is to add Infinigate and Nuvias' vendors onto Vuzion's platform.
"Nuvias was a well-established brand in the UK market and Infinigate had a lesser known brand, so the combined entity now creates that powerhouse," Griffiths (pictured above) said.
"And then Vuzion gives us that credible play in that MSP space. Many distributors claim they can sell seamlessly into the service provider market, and I'm never convinced that that's the case. The Vuzion piece has a dedicated platform. It provides API connections, the monthly billing and annuity opportunity, and it has dedicated consultants that know that market really well."
Because it has a different sales motion and integrating it "would have been a disaster", Vuzion is being kept separate, Griffiths said.
"They're seen as a virtual team to the Infinigate family", he explained.
That's what makes this acquisition cool. The Infinigate Barracuda business was nominal and Nuvias have about 60 per cent market share, so there is no overlap
The reverse nature of the Nuvias acquisition in the UK (at last count, Nuvias' UK revenues were £209m and Inifigate's £33m) has made the integration of the two businesses "very easy", Griffiths claimed. The marketing and sales teams have already been combined, although the duo's systems are set to remain separate for another six to seven months.
Nuvias was not necessarily a prime competitor of Infinigate before the deal, with the duo sharing only two vendors in the form of Barracuda and Avanti, Griffiths said.
"That's what makes this acquisition cool. The Infinigate Barracuda business was nominal and Nuvias have about 60 per cent market share, so there is no overlap," he said.
"It's 100 per cent a growth play, and we're still recruiting like crazy."
Vendor agenda
When it comes to vendor expansion, extending the geographic reach of existing partnerships will be the initial focus, Griffiths said, emphasising that the CSP contract Vuzion held with Microsoft has already been rolled pan-EMEA.
Although he would not be drawn on other examples, a cursory glance of partner locators confirms that Fortinet and Sophos are among the big vendors held by Nuvias or Infinigate in some mainland European territories but not the UK.
"If you look at the entire European organisation, there are a number of vendors that sit in different locations that that don't fulfil the complete European landscape," Griffiths said.
"So we're working very hard to do that."
Forging completely new relationships with tier-one vendors is a laborious task, however, Griffiths added, which is where acquisitions may come in.
I can't remember the last time a large vendor left [any distributor] of note, so acquisition is the quickest and smartest way to do it.
"Nothing is off the table [regarding acquisitions] and for us, it's about filling the gaps where we need to be a little bit more relevant. Getting new vendors on board takes a tremendous amount of time because the UK market, especially, is very crowded. They don't leave [existing distributors] very often unless things are really bad - and then you have to be ready to catch them and that could take forever," he explained.
"I can't remember the last time a large vendor left anyone of note, so acquisition is the quickest and smartest way to do it. But, equally, it's got to be the right one."