What can push a company renowned for its SIS and ERP solutions to purchase a company in the financial aid category? This is probably what people asked when they read about the most recent acquisition made by Ellucian. The main reason for such purchases is mainly linked to potential growth in the client base or to upsell products. In this specific case, it seems to be something else.
As clearly visible in the graph, over 70% of institutions that are clients of CampusLogic have already bought one of the Ellucian products. For Ellucian, the idea behind this purchase is most likely to integrate more financial aid capabilities into its product suite to create opportunities to help students with their financial challenges. In its press release, Ellucian mentions that this acquisition “provides a more connected and interactive experience creating more speed and certainty for students to meet their financial needs.” In the future, this also means that the Ellucian suite will integrate features currently offered in CampusLogic and vice versa.
Is Upselling Off the Table?
As we can see in the second graph, the majority of Ellucian clients are not clients of CampusLogic. By controlling the CampusLogic product suite, Ellucian ensures that the future growth within its current client base will benefit its success.
When an acquisition is announced, we like to look at the enrollment distribution of their clients to see if one performs better in a specific enrollment band. Over 50% of CampusLogic clients are mid-size institutions (5,000-19,999) while Ellucian better performs in institutions of 9,999 students and less. For both companies, the larger universities (20,000) are not a target of choice, even though CampusLogic has a larger proportion of its clients in this category. Since it’s a financial aid product, we understand why they have clients in all enrollment bands, but especially in larger institutions.
The Future of Ellucian
We updated the following paragraph following some great input from our readers.
This purchase represents the first transaction made by Ellucian since its acquisition by Blackstone and Vista Equity in June 2021. In the last decade, Ellucian bought CampusIT in January 2014 to increase its market share in Ireland and the UK and bring more innovative technology solutions to the HigherEd community. It also purchased Helix LMS in April 2015. At the time, Higher Ed Dive announced that “[this] LMS acquisition is expected to take the data analytics piece even further, giving clients more information about students to aid in retention and other initiatives.” However, a few years later, the product is no longer mentioned on Ellucian’s website, and we expect that Ellucian has integrated parts of the technology into its other products. Given that the purchase of CampusLogic comes not even a year after the arrival of Blackstone and Vista Equity, we believe this acquisition could be the first of a series under the new management team. Will Ellucian continue to improve its product offering by buying other companies?
When looking at the big picture of this recent acquisition made by Ellucian, the rationale behind this choice is clear. Financial challenges are a day-to-day struggle for most North American students. By combining the expertise of CampusLogic with the Ellucian product family, Ellucian ensures that the integration of both product suites will give institutions the capacity to increase their productivity and better serve students.