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INFINIGATE LEAPS INTO MIDDLE EAST MARKET WITH STARLINK ACQUISITION


ACQUISITIVE DISTRIBUTOR ACQUIRES CYBERSECURITY DISTRIBUTOR STARLINK, ITS THIRD
IN THREE MONTHS

Josh Budd
04 October 2022 • 4 min read

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Infinigate has expanded into the Middle East and African markets through its
acquisition of cybersecurity distributor Starlink.

Based in UAE, Starlink was founded in 2005 and claims to be the "fastest growing
and largest" cyber and cloud distributor in the Middle East and Africa with
annual revenues of $500m and forecasted year-on-year revenue growth of 20 per
cent.

The value-added distributor claims to be the largest cybersecurity distributor
in the Gulf Cooperation Council (GCC) region (comprising Bahrain, Qatar, Kuwait,
Oman, Kingdom of Saudi Arabia and the UAE) where it claims to have 20 per cent
market share.

The distributor employs 300 staff across 11 countries, carrying a portfolio of
60 vendors and a customer base of 1,500 resellers.

The deal will bring Infinigate's total turnover to around €2.2bn in 2023 and
increase its headcount to more than 1,100 staff.

With Starlink, Infinigate now sells to more than 50 countries and has offices in
more than 30.



The acquisition is Infinigate's third in just three months. It acquired the
cybersecurity and networking divisions of UK distributor Nuvias in July and then
went on to snap up UK-based Microsoft CSP Vuzion in August.

The Starlink acquisition will bring new vendors to Infinigate, opening an
opportunity for them to sell across Infinigate's core SMB customer base and
Starlink's enterprise-level customers.

Starlink will operate under the Infinigate Group banner post-acquisition, with
its joint founders Mahmoud Nimer and Nidal Othman remaining with the business.

Othman will take on a new role as CEO of the Middle East and Africa (MEA) region
and help grow Infinigate's vendor portfolio globally. Nimer will meanwhile
become president of the MEA region. Both will report to Infingate Group CEO
Klaus Schlichtherle.

Speaking to CRN, Schlichtherle said that Infinigate is "done" with making
acquisitions for the rest of this year but hinted that more M&A could be on the
agenda in the future.

"There's always a little bit of a pipeline for the future. But that's not going
to happen this year; I think we are done," he said.

Some have speculated that rising interest rates globally could slam the brakes
on M&A activity in the channel, making companies more hesitant to finance M&A
through loans as rates continue to climb.

Schlichtherle said that any smaller acquisition in the future will come from
Infinigate's cash flow, but said that the company could be more cautious about
pursuing larger M&A deals.

"Moving forward there will be maybe some second thoughts about spending big time
money," he said.

"I think we did the acquisitions at the right time with the historically low
rates that we have had."

"For bigger acquisitions, we would need to look at what the value proposition
is… interest rates increasing will have an impact, but it won't be material."

Othman said that around 70 per cent of Starlink's revenue is in cybersecurity
with the remaining 40 per cent coming from cloud.

The acquisition will bring partnerships with vendors including Palo Alto,
Symantec, Infoblox, F5 Networks and Juniper Networks into the Infinigate Group.
These vendors will now have an opportunity to expand their business into
Infinigate's core partner base in the SMB and mid-market space.

Starlink previously attempted to expand outside of the Middle Eastern market and
into Europe organically. It opened a hub in the UK in 2016 and had ambitions to
launch into the Benelux and DACH regions.

Starlink CEO Nidal Othman

Othman said that teaming up with Infinigate was the best way for both parties to
achieve geographic expansion.

"We tried to go to Europe and do something from scratch, but we found it is not
something you can do alone. That's why we felt that we need to have this
partnership that can help support us to scale now within the region.

"We need to scale into the commercial market. The vendors that we have are very
much playing in the enterprise area, so we see it as a massive opportunity in
the commercial space, and that's where Infinigate can play a key role in
enabling us to get into the commercial space with their expertise."

Schlichtherle said that after a year of several large acquisitions, the company
will spend the next 12 months pulling the businesses together under the
Infinigate brand.

"There will be a fusion of all the different cultures from all the companies. We
will stay with the name Infinigate, but Starlink will have a huge influence on
the group, Nuvias will have a huge influence on the group. Everybody has their
strengths and we need to take the best of all worlds to effectively create a new
enterprise.

"That will take 12 months at least; but we will basically put groups together
from all companies to create a new branding and a new setup. We need to align
with a new mission and purpose statement - we all have our own and they are
quite similar but we need to get together and agree on that stuff.

"And then moving forward we will create one family. It will take a bit of time,
but I'm really excited about the opportunity to have this fusion of all these
different influences in the new enterprise."

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RELATED TOPICS

 * Distributor
 * Infinigate
 * Klaus Schlichtherle
 * Starlink



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