DataSolutions acquisition highlights value of solid management
It’s been a busy 12 months or so for US-based Climb Global Solutions. In August 2022, it acquired Spinnakar, a UK-based distributor, for just under $12 million. Spinnakar’s main areas of focus were storage, cloud, security and data management and its vendors included Vast Data, Cloudian and Rubrik.
In August this year, as it unveiled second quarter results, CEO Dale Foster stated that it would “continue to evaluate M&A opportunities that can enhance our service and solutions, in addition to our geographic footprint”.
Barely a month later, Climb announced the acquisition of DataSolutions, the Irish distributor which has made significant inroads into the UK market in recent years and “achieved exponential growth of over 30% per annum for the last four years”. According to an 8-K filing on 6 October with the Securities & Exchange Commission, the deal to take over DataSolutions will cost almost $15.5 million.
Last year, DataSolutions, which has been operating since 1991, revealed it had doubled its turnover between March 2019 and March 2022, reaching €98 million and attributed the rapid growth to its security and hybrid multi-cloud divisions. This year, the distributor, which counts Check Point, Citrix, Vercara and HPE Aruba among its vendors, easily breached the €100 million mark, growing turnover by nearly 30% to €126 million.
Commenting on the takeover, DataSolutions managing director Michael O’Hara said that joining forces with Climb would “enhance the offering we provide through our existing expert team, continuing to deliver service that powers success and adding value to customers in both Ireland and the UK”.
He highlighted the synergy between the businesses, describing the acquisition as “a very positive and exciting phase for the business. The future of DataSolutions is in excellent hands under the leadership of Dale Foster as it integrates into Climb’s global platform”.
For his part, Foster described the purchase of DataSolutions as enabling Climb to strengthen its business with new strategic, cutting-edge technology vendors and bolstering its geographic footprint in Western Europe.
The quality and variety of DataSolutions’ vendors would “create cross-sell opportunities and enable us to deliver greater value together, positioning Climb as the distributor of choice for partners and resellers”. He also highlighted DataSolutions’ “robust recurring revenue base, with more than 90% of its fiscal 2023 revenue coming from existing reseller partners”.
That’s what they call a very loyal customer base. What’s interesting is that while you might expect the distributor to have built a strong customer base in Ireland during its 30 year history here, it looks as if it has managed to replicate that loyalty in the UK as well.
End of an era
How the integration with Climb and its existing UK operation happens and what that means for DataSolutions in terms of the overall operation in the UK and Ireland are not issues that can be discerned this early in the process. From an Irish channel perspective, however, it does appear to signal the ending of an era after 32 years.
In March 2021, O’Hara co-founded Techies Go Green, with the aim of bringing together people and companies from across the IT and tech industry committed to decarbonising their businesses and making them green and verifiably sustainable. A month later, DataSolutions announced its commitment to become the world’s first carbon-neutral IT distributor by 2022.
It may not have quite hit that target but it announced reductions in Scope 1 and Scope 2 emissions of 75% as measured by the Market Based Method in 2022. At the time, O’Hara said: “We made doubling the business and going carbon neutral key objectives, and I’m as proud of reducing our emissions as I am of increasing our profits.”
At last count, more than 200 companies had signed up to Techies Go Green, including a number of channel businesses, such as Ergo, Softcat and MJ Flood Technology.
It’s intriguing to think that while the acquisition of DataSolutions may well mark the completion of O’Hara’s well-deserved legacy of 30 years in the distribution business, his focus on sustainability over the past two years could create another that, hopefully, has profound consequences and leaves its own long-lasting impact.
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