Nitel Buying Hypercore Networks, Eyeing More Acquisitions

Nitel is buying Hypercore Networks in an acquisition that strengthens Nitel’s international ambitions and brings together two like-minded channel organizations.

Chicago-based Nitel and Texas-based Hypercore have signed an agreement that will bring Hypercore under the Nitel brand. The companies did not reveal the financial details of the deal, which they say will close in the next few weeks. All of Hypercore’s founders will remain at the combined company, according to Nitel.

Nitel’s Margi Shaw

Nitel CEO Margi Shaw said the acquisition reflects the aggressive expansion Nitel has embarked on following its private equity investment from Cinven. The carrier is expanding its network-as-a-service and cybersecurity offerings as well as its international capabilities.

“Our goal is to grow the business aggressively to expand our service footprint and product lines,” Shaw told Channel Futures.

Shaw said talks with Hypercore commenced earlier in 2022.

“I was extremely impressed with the breadth of their product lines, as well as the growth that they’ve achieved in a six-year period of time,” she said.

Differences and Similarities

Hypercore and Nitel resemble each other in a few key ways, executives told Channel Futures. They said both providers offer a deep national network connectivity footprint. However, Shaw said Hypercore has established strong international contracts that will support Nitel’s ambitions for international expansion. In addition, Hypercore runs a network operations and service delivery center in Costa Rica, which diversifies Nitel’s operational footprint as well.

“We’re also building out international POPs and expanding our global footprint. So we can leverage all of that work that Hypercore has done,” she said.

Both deliver managed services in SD-WAN and cybersecurity.

“We overlap to some degree on platforms, but there is some best-in-breed in the platforms that between the two companies we’ll start to build more capabilities around,” Shaw said.

However, Hypercore’s portfolio differs in that it provides a deeper set of voice services. That includes a NetSapiens-based feature server and platform.

Hypercore’s Josh Dickinson

“[Voice is] something we’ve never really spent very much time on. We’re looking forward to having those voice services added into the product line,” Shaw said.

For Hypercore and its chief revenue officer, Josh Dickinson, Nitel possesses automation and APIs that Hypercore lacked. Dickinson said Nitel’s capabilities will enable “one-click automation” that customers and partners haven’t experienced before.

“It saves five days off the provisioning process immediately for Hypercore,” Dickinson told Channel Futures.

Shaw said Hypercore also was following an ambitious growth plan.

“And the proof is in the pudding,” she said. “They’ve really been able to grow their business aggressively.”

She also noted that Hypercore, like Nitel, has built strong relationships in the agent community.

Channel Impact

Shaw and Dickinson agreed that the companies’ channel strategies resemble each other’s. Both describe themselves as channel-only.

They said Hypercore and Nitel largely partner with …

… the same technology solutions distributors (TSDs), formerly known as master agents.

“There is definitely an overlap. But it’s more just based on product sets and little niches more than it is anything else,” Dickinson said. “Partners like Hypercore, and people like Nitel, and I think they use a combination of both them sometimes, depending on what the customer solution needs to be or what we’re able to bring that’s different.”

The companies also resemble each other in their sales footprint. They both run their sales group through East and West divisions. Dickinson said Nitel’s area vice presidents will remain in charge of their respective geographies, while Hypercore’s vice president will build a central region.

Partner Perspective

Missouri-based TierOne Solutions has reached top tier recognition from both Nitel and Hypercore. TierOne managing partner Richard Reding said the companies line up well.

TierOne’s Richard Reding

“In many ways Hypercore and Nitel’s biggest differentiators and operational strengths are opposite of one another, making them perfect complements. For this reason, both providers have been top partners of ours the past several years due to the cost and service advantages they deliver within their respective strengths. We at TierOne are very excited at the potential this acquisition holds.”

Hypercore Background

Hypercore emerged in 2016 from the remnants of carrier ReaLLinx. Dickinson was the company’s vice president of business development for channel and carrier sales. He and the other partners at Hypercore had been working together at ReaLLinx for more than a decade when GTT acquired the company.

After a rapid three-day turnaround in which GTT took over the company in May 2016, Dickinson and his colleagues were unemployed. He said they decided to build the “next version” of the company they had just sold.

“We kind of created ReaLLinx 2.0, which was Hypercore,” he said.

Dickinson said partner feedback led to Hypercore expanding its carrier portfolio.

“ReaLLinx only had a handful of providers, and that was always kind of a headache for us being in sales, so one of our biggest initiatives was to sign as many carriers as our partners wanted,” he said.

According to Nitel, Dickinson will play a “key role” in its channel organization, while Hypercore chief operating officer Brian Siconolfi will lead the combined company’s operations efforts in the U.S.

“The founders at Hypercore were really important to the value equation that we found with Hypercore,” Shaw said. “Each of the Hypercore founders is going to be coming over to Nitel as key leaders within their disciplines. They’re all really solidly placed within the disciplines that they built here at Hypercore. I love the fact that they lead with an owner’s mind.”

Additional Nitel Acquisition Targets

Shaw said Nitel is eyeing other companies to buy. While Hypercore adds more “critical mass and critical talent,” future Nitel acquisition plans would bring in vendors with more technological differentiation.

“We do have acquisition targets currently in process that will be more product- and technology-driven. With that said, as we expand into the security sector in a deeper way, that may lead toward overlays. But the design will always be what best suits the channel and our partners.”

Shaw said Nitel and Cinven leadership are looking to meet a market trend they see in which customers are demanding “whole platforms of network as a service.”

“We see ourselves adding software-related products and services that enhance the experience of managing your network,” she said.