Exclusive Networks acquires Nextgen Group

Exclusive Networks has acquired Australian-founded specialist distributor Nextgen Group in a bid to boost its Asia Pacific (APAC) presence. 

Headquartered in Sydney, Nextgen Group was founded in 2011 by ARN Hall of Fame members John Walters with the backing of Steve Murphy.

The deal will see Exclusive Networks plump up its software and services capabilities particularly in Australia and New Zealand (A/NZ). 

“This acquisition is a major step forward in our growth strategy in APAC; it significantly strengthens our business and allows us to expand and develop further our value proposition. We are very pleased to welcome John Walters and Nextgen’s highly talented teams to the Group and look forward to working with them,” Exclusive Networks CEO Jesper Trolle said. 

“Together, we will aim to create a regional leader and break new ground. The combination of resources and experience will help accelerate our growth and competitiveness in this very dynamic market and beyond.”

Walters will remain as Nextgen Group A/NZ CEO along with key leadership members. During FY23 ending June 30, Nextgen generated gross sales of $266 million with double digit growth on the horizon.

“To capture the next phase of Nextgen Group’s exciting growth, we had to find the right global partner that brings the appropriate investment into our model and aligns with our culture,” Walters said.

 “Exclusive Networks, led by Jesper, aligns strongly with our shared ambitions and values, including a passion for innovation and an entrepreneurial spirit.

“After 13 years of building a business from start-up, it is with great confidence and enthusiasm that we begin this new phase with Exclusive Networks. This step marks the start of an exciting new chapter in which our growth will be accelerated by the resources and expertise of a global cyber security leader.”

According to Exclusive, Nextgen presents a hyper-growth vendor portfolio coupled with a wide array of services. Apart from Rubrik and Cloudian, the two vendor portfolios have little overlap.

The combination of Nextgen and Exclusive will offer unique end-to-end value-added channel management services, supported by real-time data analytics and AI-backed insights, benefiting the entire APAC region and providing Exclusive with the ability to roll-out digital channel services at a global scale.

Nextgen’s strong expertise in cloud migration assessment, digital marketing and lead generation solutions will expand Exclusive Networks’ value proposition by leveraging Nextgen’s in-house state-of-the-art platforms and developed initiatives with hyperscalers, laying the foundations for the next phase of growth.

Following the acquisition, Exclusive’s A/NZ presence will be more than doubled and, based on FY pro-forma figures as of 31 December 2023, the combined entity would have represented gross sales of around €615 million in APAC, a region with attractive growth prospects and a total addressable market estimated at $10 billion.

From start-up to growth mode

It was during his time working at Ingram Micro that Walters spotted an opportunity to focus on enterprise software and technology, along with cloud computing which was picking up pace. Murphy supported the ambitious venture and in 2011, Nextgen took form.

“I was really disillusioned where traditional distribution was or wasn’t going and rather than whinge, I decided to do something about it,” Walters said. “I really did think there was a gap in the traditional space and there was an opportunity if we got the model right.

“So, we went for it and after a couple of years, we chewed through a lot of capital and Steve’s advice was, “John, you’ve tried hard, but close it down, it’s not going anywhere.”

“My perseverance, whether it’s from farming stock or my military background, decided to give it a go.”

Thirteen years later, the business has grown into a force in the specialist distribution landscape, with over $400 million in revenue, a presence in six countries and 200 plus staff.

“Steve and I have not taken a cent out of the business, everything has been tipped back into fuelling future growth, acquisitions and geographical expansion,” Walters said. “The real catalyst for Jesper and his team is to capture the opportunity that’s ahead of us, which is huge in the enterprise software, cloud and cyber security market.”

Throughout the years Nextgen continued to gain momentum – branching out into cyber security and beyond distribution offering a range of channel services including Stratus, a cloud centre of excellence’ CyberLab, a proof-of-concept cyber training and solution facility and Optima, a software advisory firm.

Other offerings span oSPACE, a data insights business; Elastic Digital, a creative digital marketing agency specialising in MDF and pre-sales consulting services; Connect, a carrier-grade cloud provision, billing and ISV platform and Orbus Capital, a payment solutions platform designed to increase partner cashflow and deal sizes.

In 2013, Nextgen branched out to New Zealand with Lynne Jeffery at the helm, followed by Singapore in 2020 led by Wendy O’Keeffe. 

Facing the moment of seeking out further capital, Walters said he considered a few options before settling with Exclusive, who had been pursuing Nextgen for the past few years. 

“We needed to find the right home for what we built,” Walters said. “The leadership, philosophy and culture of Exclusive is very aligned. Jesper also got our model and our vision to take it global through the network around modern distribution and channel services, which was really important for us.

“They also wanted to give my key people an opportunity to grow and be part of a global organisation.”

Next steps

Trolle said for now it will be focused on ensuring the Nextgen team deliver a solid year before commencing the integration process of the two businesses. 

“I’m very confident this will go smoothly. There’s almost no overlap with the vendor partnerships,” Trolle said. “This is more about getting the processes and systems right. It is about revenue synergies and what we can do for our vendors and downstream partners.”

In terms of the services side of the business, Trolle highlighted the two organisations were very complimentary. 

“There’s opportunities to cross-pollinate resources and technical capabilities,” he said. 

Walters added he looked forward to working with Exclusive’s APAC SVP Andrew Assad for the benefit of its vendors, partners and staff. 

“We’re keen to make sure we’ve got an A-class team that provide differentiation in the market,” Walters said. 

“Once the deal closes, both Nextgen and Exclusive will come together to develop solid plans for integration and leadership.

“We’re in this together to leverage the opportunity, which is great.”