boxxe's Doye on Total acquisition and the road to £1bn

CEO and investor Phil Doye talks to CRN about the scale, capabilities and relationships gained in the acquisition

York-HQ boxxe has fully acquired Total Computers, just over a year after boxxe CEO Phil Doye first invested in the business.

The deal is set to close on 31 January, 2024.

The move exposes boxxe to a new set of clients and adds further growth prospects to a business that has already seen rapid organic expansion over the past two years.

Doye tells CRN the acquisition felt like a natural fit after several years of close collaboration with Total CEO Aidan Groom.

"I've known Aidan for a long time. Over the years we talked a lot about Total and the wider market and in 2022, those conversations progressed to the point where I made a personal investment into Total, Doye explains.

"During the course of 23, it became obvious to both of us that putting Total and boxxe together just made good sense. Being part of a bigger group means they are going to be able to solve some of the challenges that they've faced over the years and really accelerate growth."

Groom himself will take on a non-executive role in the wider boxxe business.

Complementary market position and network effects

On the Total side, these challenges include a lack of scale, which previously may have prevented Total from working with some of the larger clients that the business has been in conversation with.

"We've got a larger combined business with bigger, greater financial strength. One of the things that the Total business has suffered from is that their customers want to do more business with them, but for the larger projects or contracts they represent a financial risk, says Doye.

"Being part of the boxxe group, that issue goes away. We transact some of the largest deals across the public sector and our financial strength gives our customers the confidence to really commit to our relationship. Our market positioning is different to that of Total."

Beyond sheer scale, Doye is firm in his conviction that the two businesses' capabilities are deeply complementary.

"We've got a set of products that will really benefit their customers, and they've got a set of products, certifications, services and solutions that will benefit ours.

"For example, our heritage in software licensing, including our Microsoft LSP status, is a real game changer. It does seem like a win-win for everyone"

Total's experience and foothold in devices was another obvious draw.

For boxxe, the move adds exposure to a corporate segment with which Total has established inroads.

"Meanwhile at boxxe, we've experienced rapid growth since I took over the business in 2019. We finished 2023 with sales of around £440m ($558m).

The boxxe business has grown from £135m gross revenue at the time Doye acquired it in 2019, to £365m for FY 2022 (placing it at No. 13 in CRN's Top VARs 2023), to a projected £440m for FY 2023.

According to the Kelway founder, the combined boxxe business is yet to reach its headroom for organic growth. And with the scale added by the Total acquisition, he has his sights set on the elusive £1bn figure in the coming years.

Even with the organic and M&A growth achieved since 2019, Doye is quick to point out that the aim is sustainable expansion and committing to a specific timeframe for £1bn would be counterproductive.

Scale and services

For Doye, sustainable growth means diversifying client segments and adding a layer of certifications to boost services.

"But one thing that we haven't been that successful in, although we've had notable wins, is in the corporate space. This is where Total has really excelled, where they have around about 2000 customers across corporate mid-market and enterprise," Doye says.

This marks a new opportunity for boxxe, which, itself, boasts established relationships in the public sector.

"For us, this means we gain significant traction in the corporate market. We've grown within our own space, in the public sector and specifically in defence, local and central government and NHS but we have struggled to really ignite growth with corporate customers.

"They also have some great public sector customers, too, in areas where we are not that strong so crossover of accounts is minimal."