SOS Systems have recently completed a management buy-out led by Sales Director Chris Sills, a move that sees Managing Director Alun Evans step back from the day to day and adopt a high-level strategic role in driving the business forward
When we speak, Sills is buoyant about the MBO of the business he joined in 1989 and rose through the ranks to become Sales Director and shareholder. “Alun set up the company in 1985 and we’d got to the point when it was time to consider an exit strategy, one which would enable him to spend less time on the operational side of the business, but still continue to remain heavily involved strategically to support our passion for ongoing growth.”
Sills pointed out that the print industry is no stranger to M&A activity, with completed deals making the headlines on a regular basis. “We often ask ourselves the question – what’s our differentiator?” he said, adding: “While we can say it’s that we are all good salespeople in front of clients or that we deliver a great service, the truth is that the industry has been decimated by PE- backed acquisitions and the marketplace has actually evolved to give us a true differentiator. We are a privately owned, independently run business with a passion to grow. And, importantly, we’re not about to split the business or drive all the costs out of the business to increase our EBIT for a sale.”
SOS Systems is a Canon Platinum Partner and is also one of the OEM’s leading European dealerships.
“We have an incredibly strong relationship with Canon, we’ve maintained our single-line status for many years and we are looking to strengthen that partnership further as we move forward,” Sills continued.
“Our position as a mono brand reseller is quite unique, in a market that’s seen private equity firms move in, pressure to cut costs has seen a lot of businesses diversify and start selling another cheaper brand to bring service costs in. In our experience, the private equity investment usually dilutes the offering, we’re committed to maintaining our single-line status and that’s part of why we believe this MBO is good news, especially in terms of us achieving the growth plans we have put in place.”
The MBO has seen the formation of a new board comprising Business Development Director James Overton, Commercial Director Graeme Savage, and Solutions Director Gary Tomlinson, who will work side by side with Sills and Evans, to deliver on the business’ growth strategy.
The company has a solid business plan and a marketing strategy that is aligned to support its goal to increase turnover to significantly above 2019 (pre-COVID) figures by 2023. The strategy is focused on expanding both its print hardware and solutions business, but also on growing its digital services portfolio where it partners with brands including DocuSign and MFiles.
“The solutions side of the business has been growing at a significant rate and we see that as being very important to our overall growth plans. We’ve seen huge success with MFiles and DocuSign as well, particularly over the pandemic, and we’re about to launch our own brand accounts payable piece of software that we’re quite excited about,” Sills said.
Bucking the trend
Each of the board members are responsible for performance in each of their respective areas. The MBO was completed in March 2021 and since then the team has been working on defining a clear strategy, and putting a plan in place for future growth.
Headquartered in Crawley, SOS Systems currently has a staff of 40 and plans to expand its footprint in the UK opening new offices to the north and south of HQ. “We’re really bucking the trend with what’s happened in our sector. The key message we want to communicate to our staff is that we really have such a fantastic opportunity to go out there and win new business, to grow, and create more jobs,” Sills said.
Partnering on a global scale
The company taps into Canon’s nationwide network to service customers across the UK. “The partnership with Canon works really well in that respect and we’ve also been really successful attracting customers with a global footprint,” Sills explained.
In a somewhat unusual move for a dealership, SOS Systems has over 15 years’ experience in project management and has partnered with other Canon resellers across the globe to offer clients what is essentially 24/7 service coverage.
“We have leveraged some great contacts we have made across the globe though our partnership with Canon. Through collaboration with like-minded businesses, we’ve effectively taken the pain away from clients in terms of dealing with problems in different time zones etc.” Sills explained. “So for example, we have a very strong relationship with a partner in California and we work with them to provide clients with what we call follow the sun support – so we support the EMEA region and they look after the US and Asia regions. We’ve also worked on similar deals in the UAE and other regions.”
He continued: “Offering clients 24 hour support can be really critical, especially when it comes down to software solutions. Say a uniFLOW client is London-based but they have offices all over the US and Asia – if their servers are in Europe but they have a problem in one of the US offices, they’d have to wait until the next day when the UK wakes up to get it resolved. Instead our US-based partner will take action and resolve it for them, which is a real value-add. That service is a really key part of our business and a profitable one, clients really appreciate the fact that we can deliver this service and we have a full-time project manager who looks after our global accounts,” he added.
Sills points out that the partnership works both ways: “Talking to other partners in the Canon network it’s clear that we’re all facing similar problems, and by teaming up we can help each other. We’re working on some enormous projects at the moment which could be really exciting and could see us massively over achieve on our growth plans,” he added.
Sills acknowledges that the business has not been immune to the impact of the COVID-19 pandemic. “Without a doubt the pandemic has hit the industry and our business very hard, and so our initial focus is for us to recover the business to its pre-COVID profitability, and we anticipate being back to that by 2022.”
He continued: “At the lowest point, we were 80 per cent down on our service revenue, that quickly recovered to about 50 per cent, but nevertheless that’s still an incredibly large amount of money. We’ve actually planned that it won’t come back to 100 per cent, we’re looking at probably about 80 per cent of what it was. However, we believe that we can make up the difference by growth in other areas.”
Interestingly, the business plan didn’t factor in any big wins for 2021 but to date the company has completed two deals. “We’re 50 per cent ahead of the game already,” Sills said, adding: “We’ve seen a shift in mentality, people are going back to work and businesses are back buying again, spending in other areas such as solutions.”
Speaking about the impact of lockdowns on the business, Sills said they had to keep going in order to support customers in key sectors and notably, completed their biggest ever MFiles deal in April 2020 at the height of the first lockdown.
“People make this business unique and we are a really close knit group here, that culture has been driven very much by our founder. So when COVID hit us, everybody did pull together, and we didn’t see any drop off in our ability to operate as a business, we were all able to work remotely and we’re very proud of how we all continued to support clients when they needed us.
“Now, with the MBO completed, we are all looking to the future, and to deliver on our plan to grow the business to over £10 million turnover,” he concluded.