The deal for Dotcom Associates completed on 15 May, following a speculative approach by H&H Reeds managing director Andy Jackson late last summer.
“With all this going on the background, when you’re in the final stages of discussions, it was really difficult to get it over the line, but with what is going on, it made it even more important that we did,” he said.
“We’re going into a new world now, there’s going to be a new normal and this helps us prepare for that and gives clients and staff confidence, which is important.”
According to Jackson, he started looking for a bolt-on web development acquisition last year following a strategy meeting where the business was looking at its five-year plan.
“I felt that we needed to go more multimedia and needed to better connect with our clients through different channels and be slightly more balanced, beyond just print.
“Print absolutely has its place and will still be the major part of our business, but we can’t ignore the other channels and I think, if anything, with coronavirus you can see how people have needed to adapt quickly to other media.”
Jackson looked at developing H&H Reeds’ web design offering inhouse, recruiting a seasoned web developer, but simultaneously began approaching a variety of web development firms to explore M&A opportunities.
“What shocked us was the synergies with Dotcom, our owners H&H Group, are very much agricultural based and Dotcom dominates the agricultural market and as well as that they were very strong in tourism and hospitality,” said Jackson.
“The customer base is a really good fit and I just couldn’t believe we found someone so close [geographically] and the right size and maturity. The fit is key and when I spoke with Allan [Bewley, Dotcom owner] it just clicked.
According to Jackson, while the two firms operate in similar verticals, client crossover is minimal and the deal will present significant cross-selling opportunities for both businesses to promote the other’s offering.
“I think this deal will fast-track our five-year plan by two or three years, compared to doing it organically.”
He said he hoped the four staff, circa £500,000 Dotcom business would “at least double” sales and profits over the next three years.
Prior to the deal, H&H’s creative hub operation in Carlisle had offered some web development services, primarily WordPress-based, but its prime focus had been agency and design services.
Combining its creative offering with the web development and strategic marketing expertise of Dotcom will offer significant growth opportunities to both businesses, said Bewley, who becomes web and digital services director of H&H Reeds.
Dotcom Associates will retain its current branding in the short- to medium-term.
“There is no doubt that the combined skillsets resulting from this merger presents a new and exciting opportunity to provide a full creative agency service.” aid the signage side of the business is booming producing social distancing graphics and screens for retailers,” he said.
This latest acquisition follows the company’s deal for Print Graphic around 18 months ago, which Jackson said had been “a great success”.
At the start of the lockdown, £3.5m turnover H&H Reeds briefly suspended production but quickly reintroduced staff with around a third of its 45 staff now back at work, with remainder on furlough.
“Our signage side is now back up to capacity and we’re also printing on commercial side, which is slowly returning – we’re just waiting for the tourism trade to come back,” said Jackson.
While the business operates across a range of industries, a significant number of the firm’s clients are dependent on the travel and tourism industry in the Lake District.
“All the signs are that it’s going to get going later this year, and I’m hopeful that not only will they have the summer, but there will also be more business in the winter as a result of people not being able to get away in the spring.”
As evidence of the firm’s confidence that the commercial print side of the business will soon return, he said that it was pushing ahead with a new Heidelberg Suprasetter A75 platesetter installation, which begins next week.