Academia adds 'string to bow' with acquisition of Apple schools reseller

Toucan has annual turnover of around £5m

Tom Wright
@TomWrightCRN
09 June 2020

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Academia has added "a string to its bow" with the acquisition of Apple schools reseller Toucan Computing, CEO Mike Bacon has told CRN.

Academia is already an education specialist, but Bacon said its expertise has typically been in the higher education space.

Discussions about the acquisition started before the coronavirus pandemic took hold but the CEO said that deal helps Academia diversify its customer base, at a time when spending in the education sector is fluctuating.

"We've got parts of the business that are quiet, but we're still making money," he said.

"We've got the Apple framework which is a big contract for us, but having lots of eggs in one basket is never a solid business strategy.

"We're seeing warning signs from higher education, particularly because foreign students are probably not coming and they pay four times what UK students pay, so a lot of the big capex projects are suspended which usually means they get put back 12 months.

"Higher and further education is probably 70 per cent of our revenue, so the schools piece was the missing part of our solution and that is what Toucan does.

"It can become our schools department, which is perfect."

Toucan has 14 members of staff, all of whom will be kept on, and is a stone's throw away from Academia's Enfield base. Bacon said the firm turns over around £5m annually.

It specialises in Apple solutions and was one of Apple's original education partners in the UK.

Bacon said the Toucan brand will be retained, but the business will be merged into Academia.

He added that terms of payments have been made more flexible since COVID-19 took hold, but said that the overall fee, agreed before the pandemic, has not been changed.

However he said that M&A activity in the channel could be impacted, particularly for struggling firms seeking a buyer.

"In this incident we had agreed a deal, but could have bumped the price and said the reasons are obvious, but as long as I'm running Academia that is not the profile that I want to project.

"There are tough decisions to be made and I imagine that with more scrupulous M&A in the channel, how much will a buyer want to spend on a company that is tumbling in value on a weekly basis?"

Bacon said to "watch this space" when asked about future M&A activity, saying that the firm would look to pay up to £1m for complimentary businesses.

The firm took a stake in York-based device-as-a-service supplier Vital York in 2018.

On the vendor front, he said that suppliers have helped the channel operate in tough trading conditions.

"Apple were very, very quick with payment terms," he said.

"They gave extended payment terms to distribution with a clear expectation that distribution would pass it on to us, which they did,.

"All the big vendors have been good to us and we've just had one of our best marketing events, which was a whole conference online.

"The vendors, instead of saying they're not spending on marketing, they've said that as long as it is something with some value they'll chip in. Vendor funding has been reassuringly supportive."