It can pay to buy yourself bigger

By Max Goldbart, Monday 24 April 2017

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It’s not exactly a common career move: to go from being a buyer for a company that imports children’s rucksacks to setting up your own print company, but this was exactly the turn that the career of Graham Knight ended up taking.

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In 1991, Knight’s employer was moving its operation up north and he was told that to remain with the company he would need to move too, away from his Sussex home town. Disinclined to make such a move, Knight came up with a Plan B – and with a little help from dad Ken, he set up Xpress Group on the Crawley industrial estate, just south of Gatwick Airport. 

“We started off with a couple of contracts, beginning with artwork and the creative side of things, and that led us to being asked to get brochures printed,” says Knight, who exudes positive energy and always seems to have his head in the next project. 

The challenge 

Xpress built itself up slowly through the 1990s under Knight’s savvy leadership and he was quick off the mark in spotting the opportunities that digital print could bring, fascinated by the sorts of work that the new digital kit could produce and, around 10 years ago, invested in its first digital press from Xerox. 

Knight printed some leaflets and dropped them through the doors of a number of local businesses, including that of FMCG giant Unilever’s local office. It was then that things really started taking off. Unilever liked what it saw and quickly sought out an appointment with Knight, beginning a relationship with Xpress that still flourishes today. 

Unsurprisingly, Knight kept investing in more digital kit, HP Indigos, a move that he has never regretted, and he continues to upgrade as more become available, with a new 7800 coming in last summer. His now 21-staff outfit also runs HP Latex wide-format machines and suite of finishing machinery.

However, towards the end of 2013 Knight wanted to give Xpress’ organic growth a significant boost and began to look around for potential acquisition targets. With only a handful of staff at his disposal, the process turned out to be anything but easy. 

He began searching for organisations that would complement his business and fit well with what he was trying to achieve. 

“We really wanted to increase the size of our business without uprooting anything, so we wanted a business of a size that we could easily handle their work in-house, with the equipment, staff and expertise that we have here,” he says. 

“So it had to be something fairly similar to what we are doing or something that would at least fit quite well.”

The method

Knight didn’t hold back when doing his homework. He approached several agencies that advertise businesses up for acquisition and ended up looking at six or seven companies before settling on a suitable buy. 

It was an enormously time-consuming process, more than Knight first imagined. He continued to rigorously follow the agents that were advertising businesses for sale and they would get in touch if anything came up that matched with his brief. 

“Somehow you just make it work. We are a small business and are used to juggling things and one of the joys of running a small business is you end up doing quite a lot yourself.”

Some of the companies were too far away for Xpress to be realistically able to manage, another issue for Knight was the size of some of the businesses on offer.

“We’re not a huge company by any means but some of the companies we did look at were very small; to be honest they were too small, so that if we took them on there was only really the owner that was running it who either wanted to retire or do something different.”

An agent approached Knight with the details of a firm called Calico and he was immediately impressed, the outfit seemed the perfect fit. It was a good size, wasn’t too far away and, most importantly, it had a customer base that Knight said “really set them apart”.

Based in Hurstpierpoint, around 18 miles south of Crawley, four-staff Calico had sales of around £500,000 pre-acquisition. It specialised in creating and developing SME brands and brought with it additional expertise in web design, which Xpress previously lacked. 

“We could only really see the positive side of things: it would increase our turnover and make us more profitable in the long term.”

Knight signed confidentiality agreements with a number of Calico’s clients and, along with sales director Adrian Marshall who joined him on the endeavour, he went on trips to assess Calico’s competency. What he heard only confirmed his desire to acquire. 

Knight conferred with Marshall and a decision was taken last summer, at which point he visited accountants, liaised with solicitors and had his first initial meetings with Calico managing director Alistair Veness, who has remained in his role. The deal completed on 1 November 2016, at which point Calico took the 18 mile-trip north and joined Xpress in its 557m2 premises. 

The result

“Things have been pretty good so far,” says Knight. 

“I am surprised how on board everybody has been to help make it work. There are a few things that we hadn’t thought about, which could potentially have caught us out, but they didn’t.”

Slight niggles involving differing processes were dealt with quickly. Xpress is ISO 9001, 14001 and 18001 accredited, so once Calico’s staff had moved over, they had to be brought up to speed on the accreditations, which Knight says went smoothly.

The staff relocation went seamlessly, all of Calico’s employees were approached early on and kept in the picture in terms of the premises move. Within a few weeks, Knight was pleased to see the Calico staff easily gel with his Xpress team.

Calico’s digital kit also came along, and was slotted into the Xpress premises, which had spare capacity. However, Knight is keeping his eyes out on potential new premises in the area as he remains fixated on further expansion.

Calico had expertise with digital print, there have been no issues there, and it was also responsible for bringing over a number of contracts, so as time goes on Knight sees more and more why the move this was really a no-brainer. 

“The creative side of things from Calico is very useful. We’re not seen by all our customers as a creative company although we do quite a lot of creative work and one or two of our clients had almost pigeonholed us as printers and one or two see us more as designers.

“By having the two companies in effect we can cross-sell and those who don’t see us as creative, we can sell them the Calico side of things.”

Knight is confident in what is to come and already has aspirations for another acquisition. He has looked at other companies with his accountants, but is again wary that any acquisition must be a good fit. 

He says the next acquisition will be at least the same size as Calico, if not larger, and with a premises relocation in the pipeline, plenty of new contracts in the offing, and a £5m turnover target by 2020, things aren’t looking too bad for this former children’s rucksack importer and his band of merrily acquired men. 


VITAL STATISTICS

Xpress Group 

Location Crawley, West Sussex

Inspection host Managing director Graham Knight

Size Staff: 21; turnover £2m (aiming for £5m within three years) 

Established 1991

Products Creative design, web design, POS, training material, brochures, technical manuals, signage, graphics 

Kit HP Indigo 7800, two HP latex printers, two HP DesignJet Z6100s, bookletmaker, perfect binder, laminator, plan printer 

Inspection focus Acquiring a business


TOP TIPS

Do your homework Don’t be afraid of a bit of hard work, check out the market and don’t cut corners in your preparation. 

Be prepared for it to take a bit of time “Maybe I’m impatient but things did take a lot longer than hoped, even finding businesses to approach, they’re not always available straight away,” says managing director Graham Knight. 

Customers are important Bringing a good client base is integral to a good acquisition, and was one of the key attractions of Calico for Knight. 

Don’t aim too small Small companies tend to be run by those looking for a way out of the industry and may not make for the best fit. Keep your targets realistic but be clear about what is the required size of target business.

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