Acquiring a new outfit to produce new outfits
Monday, October 15, 2018
It was the right time for Keith Boyce. And it was the right place for his latest takeover target. The print managing director wanted to buy a business to expand the capabilities of one of the UK’s most successful companies in the Minuteman Press franchise.
This isn’t the first time Boyce, who runs the operation in East Anglia with his wife Paula, has bought another company. But the latest acquisition was located much nearer. Not quite on his doorstep in King’s Lynn, Norfolk, but about 20 miles away in the Fens of Cambridgeshire.
If mergers and acquisitions are common, success is not. Against the potential pros – a faster, easier, often less risky route to growth – come the possible pitfalls: hefty costs, integration issues and a dilution of focus.
YourWear in the Fenland market town of Wisbech was up for sale and the Boyces were keen to move into its line of work – printing on clothes for corporate, sports, safety and promotional clients. This wasn’t a million miles away in terms of the market YourWear served from that of Boyce’s first acquisition two years before. But its physical location might just as well have been.
Echo Promotions specialises in promotional gifts and was based in another market town, but over 100 miles away from King’s Lynn in Banbury, Oxfordshire. The company was a good buy in 2016 and a smooth fit. But the customer base was too far away to nurture, develop and grow, says Boyce. A closer location, he says, enables you to maintain levels of service and develop core customers.
So both the place and time were right for YourWear and Boyce to come together. He says: “They no longer wanted to offer a service that had got too big for them, and they were keen to wind down business. Meanwhile we knew if the right opportunity for acquisition came along we would get the support from the Minuteman franchise owners.”
This is because at a franchise conference only a few months before, in January 2018, Minuteman had called for a big push from its 70 or so UK franchisees to move into clothes and dye sublimation. They realised the potential of cross selling, says Boyce. Customers wanting letterheads, business cards and posters, also often need logos and artwork printed on to workwear, mugs and chargers.
Minuteman Press is a global franchise business that has been running for around 40 years and now has about 1,000 companies producing digital print, design and promotional items to firms across all sectors. Keith Boyce, whose background is with large commercial B2 printers, was looking to move in a new direction but did not know how to go about running his own business.
“In 2004, I was seeking a new challenge. Both Paula and I wanted to run our own business. We felt a franchise operation would be good for us as we both had little experience with direct selling or marketing. What drew us to Minuteman was it felt like a family firm rather than a corporate titan like Prontaprint or Kall Kwik.”
And just as the Boyces had little experience with direct selling or marketing in the early noughties, their knowledge of textiles and dye sublimation was sketchy a decade later. “So rather than go out and try and break into a new market from scratch, we could use an acquisition to expand capability by taking over an established company with a pile of kit and about 200 customers.”
Not only were the time and place right for the acquisition, but the Boyces’ King’s Lynn company had dealt with YourWear in the past: “As a consequence they were known to us. It was the right fit at the right time: they were wanting to sell and we were wanting to enter into a market place where clothes are now being seen by Minuteman as a complementary product.”
In some ways, he adds, clothing is more complementary than a lot of the “jobbing two-colour” brochures, leaflets and business cards that people used to buy often and regularly, but these days were scaling down. More reason, then, to move into a new, emerging market and twin this with internet ordering, which is a “running steam train enjoying relentless growth”, says Boyce.
The deal, he adds, was straightforward, but it was reassuring knowing that the might of Minuteman was there if franchisees need it, he says.
“If we needed help, Minuteman would have given it, but this was a relatively straightforward transaction for a modest amount of money raised from existing working capital. In the past when we’ve looked at acquiring a general print company, they have become more involved. As it was, we absorbed the business, database and equipment fairly smoothly. We sent a cheque and this was followed by a month of changeover.”
No YourWear staff moved over to the new owner, but Minuteman Press King’s Lynn took on an extra employee while existing staff trained on the new garment kit, which included two heat presses, a plotter-cutter from Roland, an OKI printer and a Ricoh dye-sublimation machine.
Key to the success of the acquisition was the customer base, and the 20 miles between Wisbech and King’s Lynn proved just about perfect: close enough to nurture, but far enough away to ensure this was a totally new, fresh customer pool. If you are going to acquire a company, insists Boyce, “don’t underestimate how difficult it is to grow and develop the customer base”.
What it needs is a “champion”, he says, and wife Paula took on that role and continues to do so. Rather than both husband and wife juggling the work, it was deemed better if one director took on the task to give dedicated focus. Paula recruited a work colleague and together they developed the business. The only way to blend an acquisition is to “nominate a champion”, he insists.
One of the main challenges for Paula has been convincing YourWear customers that the service is not only as good, but better than it was, even though it’s now based 20 miles from the old base in Wisbech. Minuteman Press rolled out a daily delivery service to and from King’s Lynn to reassure any die-hard customers back in the Fens that still needed convincing.
“We were conscious we had to get the service at least as good as customers were used to and then try to build on that. Fortunately we have greater resources than the old company to make sure we could indeed offer a better level of service. We purchased the company this April and it has brought us month-on-month growth. We are actively trying to cross sell and turnover is up about 10%.”
The YourWear name may now have gone, but its business has now been totally integrated into the Minuteman King’s Lynn brand – a prerequisite for the Minuteman franchiser, which opposes dual brands in its operations.
“At a time when core sales of business cards and leaflets are proving harder and harder to come by, this acquisition has made what would have been reasonable growth this year much more healthy. This acquisition gave us instant market penetration into clothing and dye-sub and has been an important means of growth for our business.”
Location King’s Lynn, Norfolk
Inspection host Keith Boyce
Size Eight staff
Products Printed stationery such as letterheads, envelopes, business cards and labels as well as print for workwear
Kit Two Xerox Iridesse printers, Xerox 1000, Xerox D130 black-and-white machine and Duplo finishing kit, plus new workwear setup
Inspection focus Acquiring a business to expand capabilities
Location location location. Boyce says: “The biggest lesson I learned was you need to get the location right to maintain levels of service and develop the customer base”
Choose a champion who can give dedicated focus to growing the business and developing the all-important customer base of the acquired company
Have a plan in place; success is more likely if you have a well-thought-out strategy for finance and growth and integrating printed products, equipment and staff
Communicate the reasons behind the acquisition to staff and customers to ensure buy-in from everyone involved especially former customers of the new acquisition