**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2014.**
Global integration powerhouse Dimension Data has dramatically increased its U.S. footprint with the purchase of Nexus, a California-based, Cisco Gold-level solution provider with 19 offices and 650 employees throughout the western U.S. and key metropolitan areas.
The acquisition is part of a broader push by Dimension Data to become a bigger supplier of IT goods and services in the Americas. A year ago, the company, which does just north of $1 billion worth of business in the region, said it wanted to triple its sales in the Americas in a mere few years through organic growth and acquisitions. The deal with Nexus, which generated nearly $500 million in sales last year, should go a long way to helping Dimension Data realize its ambitions.
With Nexus, Dimension Data gains in several important ways. For starters, it gets a bigger footprint in the western U.S., where its impact has been minimal. Nexus will help Dimension Data in Texas and California, especially. (In addition to these states, Nexus also has offices in Nevada, Colorado, Arizona, Utah, Washington, Georgia, Florida and North Carolina.)
Nexus also will give Dimension Data a bigger presence in the all-important state and local government market, which is a segment in which Dimension Data has not penetrated to the extent that it has in other countries. And, Nexus will provide Dimension Data a foothold in the Apple retail market, where it does not have a presence. As for Nexus and its customers, they will gain immediate access to Dimension Data’s global expertise, which spans nearly 60 countries.
Jackie Funk, vice president of marketing for Dimension Data Americas, said the two companies have remarkably similar cultures.
“We’re thrilled to have found such a good fit,” said Funk. “Studies show most deals go wrong not because of technology or strategy but because of culture. In Nexus, we found a partner with a very complementary culture.”
From a technology standpoint, both organizations represent top vendors including Cisco, VMware, EMC and others, and participate at or near the highest levels of their programs. In March, for example, Nexus was honored as the “Americas Partner of the Year” by Cisco. In addition, both organizations provide enterprise customers with traditional data center and cloud solutions expertise.
For now, Dimension Data plans on retaining all of the 650-plus Nexus employees and their 19 offices. As leases expire, it may consolidate facilities. But Dimension Data will maintain the Nexus brand where appropriate and leverage its assets wherever possible. In addition, Nexus CEO Deron Pearson will stay on and oversee the Nexus business. He will report to Dimension Data Americas CEO Mark Slaga. Nexus President and COO Waheed Choudhry, meanwhile, will continue to run Nexus’ day-to-day operations, reporting to Pearson.
As for terms of the deal, they were not disclosed.