Aiming to take charge of the education market, Commander Communications has acquired IT consortium, Axon Group, in a deal worth up to $21 million. Both parties claim the agreement will see the communications integrator become the largest full-service education solutions provider in Australia.
The Axon Group consists of five IT independent resellers: Metropolitan Business Machines (in Sydney), Axon Computers (Melbourne), PT Computer Professionals (Perth), General Business Machines (Adelaide), and Computerquest (Canberra).
Each provides technology solutions to the education, government and corporate sectors, specialising in notebooks and mobile computing. The group was formed specifically for the Commander sale by reseller and consortium leader, Axon Computers.
General manager of Commander's enterprise division, Steve Evans, said its current education business was about two-thirds of the size of the combined Axon Group.
"But they are very strong in mobiles and in notebook programs," he said. "We had nothing compared to them on this."
The Axon Group boasts strong links with Fujitsu and Toshiba, according to Evans, and would retain relationships with both vendors.
"We'll provide the most appropriate solution for each case," he said. "We're big enough to do that."
Commander claimed the acquisition should add $70 million to the balance sheet next year.
Evans said Axon had put together the consortium and approached Commander with a view to a sale.
Commander was attracted to the group's national coverage.
"It would have been very difficult to purchase these companies individually," he said. "None of them were of a sufficient size in the market on their own.
"Education is a key vertical for us. The Axon Group is a collection of quality companies that have been around for a long time."
Negotiations had taken about 12 weeks, Evans said: "It's taken a long time to make it happen. It's a complex transaction - we had to make sure these were the right companies we were buying. The acquisition had to give us a leading position in the education sector."
Axon Computers managing director, Rodney Con Foo, said the reseller had been working on constructing the group since December. "We decided the way forward [for Axon] was to either shrink in size or grow dramatically," he said. "Growing the business looked like the best way to go."
Con Foo said Axon had identified education as key growth area which could give the company a competitive advantage nationally. The company then set about finding similar resellers to form the consortium.
Those companies asked to join the cooperative were all Toshiba education accredited resellers and were leading IT providers in their respective states, he said.
Evans said Commander had made offers to retain all 65 employees from each reseller that dealt with customers. They included technical support, sales, and repairs staff. An unspecified number in back office positions such as warehousing, billing and collections were not retained.
All of the companies under the Axon Group would be rebranded Commander, Evans said.
The deal is scheduled to be completed on 16 August.