Kiwa is one of the fastest-growing companies in the NPM Capital portfolio. As its CEO Paul Hesselink explains, this growth is predicated on a carefully managed buy-and-build strategy. He sheds light on the ins and outs of this approach by zoning in on ten keywords: ‘There’s something inherently opportunistic about a buy-and- build strategy.’
1. Consolidation
‘Our plan for 2014 was initially to focus on achieving organic growth, improving operational excellence and integration, but all that fell by the wayside when three companies which had been on our wish list for a while all came up for sale at the same time. So we decided to take a serious look at those three candidates, since opportunities like that don’t come along every day.
We ended up acquiring Inspecta in the spring of 2015 – it was a major transaction. After making that sizeable acquisition, we knew we needed to exercise some restraint and take the time to catch up with ourselves before moving on to the next big adventure. This turned out to be the right decision, as it has allowed us to optimise our corporate framework and make the kinds of changes we don’t normally get around to. For example, we are currently in the process of integrating fourteen different financial accounting systems into one centralised system. That’s very much a necessary move, as it will enable us to monitor things much more effectively. We are doing the same for our various IT platforms. I want the control framework to be fully back on track before we venture into any new territory. But I do admit that managing the dynamic in the organisation can be tricky. People here are very gung-ho – they have a real get-up-and-go attitude, and are keen to move on to the next exciting challenge.’
2. Rebranding
‘We also used this “downtime” for a major rebranding effort: we updated our company logo and introduced a new corporate identity, and we prefixed all of our company names with the Kiwa branding, as this happens to be the name in the market with the highest brand recognition. Norway recently became the First country to complete the changeover. I happened to be at a trade fair there last week, and clients told me: “We’re only now realising that you’re all part of the same family of companies and that you can provide more services as a single entity than we initially thought.” In other words: people are becoming aware of the real size of the organisation and the scope of our portfolio of services. I wouldn’t go so far as to say this was “overdue maintenance”, but I do feel this is something we may not have given sufficient priority in the past. We were already doing well before, which may have blinded us to some of the gains to be made from changing the status quo.’
3. Wish list
‘To get a buy-and-build strategy right, you always need to be on your toes. That’s why we have compiled a list within the company of businesses we consider viable alliance partners or merger targets if we decide to step up our growth. Some of these are smaller companies, which could serve to fill a gap in our product portfolio or country network. An example is the acquisition of R2B – they were an established name in the field of fire safety inspection, and we did not have that type of expertise available in-house at the time. But we have also earmarked a number of larger players, real game changers that would help us to take our business to the next level. Inspecta was one of those acquisitions: we took on their staff of 1,600, establishing a presence in new markets and significantly expanding our service portfolio in the process, particularly in the manufacturing industry. To use an analogy, rather than picking up a few pearls here and there we’re going for a full necklace straight away.’
