When husband and wife team John and Jenny Hodson set about looking for larger premises into which to move their rapidly growing exhibition stand business, buying another company had not been top of their to do list. But when they were “tipped off” about a potentially perfect acquisition opportunity, explains John, they put the brakes on a deal to purchase a new unit and decided to explore the idea.
The challenge
It wouldn’t be the first acquisition the pair had undertaken, having bought GH Display from John’s father Graham in 2013, when he decided to retire after nearly 40 years at the helm. Founded as signwriting business Graham Hodson Design in 1976 by Hodson senior, he grew and evolved the business from a tiny operation in his garage through various premises over the following 20 years, finally settling in Werrington, outside Peterborough, in the mid-1990s.
When John and Jenny Hodson took the business on in 2013, their first acquisition and foray into the world of exhibition graphics and display, the rebranded GH Display was turning over £186,000. But with a growth trajectory of 30% year-on-year since then, the business pushed through sales just shy of £1m last year and was, by all accounts, bursting at the seams of its 557m² premises.
“The immediate pressure was that we were winning more complex custom exhibition stand jobs as our reputation grew and the more complicated stand builds we did the bigger they generally got,” explains Jenny.
“It was the physical space we needed to be able to build up stands of those sizes and also have a number of stands being built at one time. And equally, on the other hand, we needed more people to be able to deliver the work, more toilets, a proper area to be able to have breaks and lunch – generally better facilities for the team.”
John adds: “We also wanted to automate processes and production with some larger pieces of equipment, which we just didn’t have space for.”
So, to avoid being stifled by their own success, the pair began looking for a new, larger site towards the end of 2017, but without much luck. Eventually they were on the brink of settling for a new unit when they learned of a small business, 12 miles away in Washingley, with an almost identical product portfolio, but more than triple the production area footprint, that was looking for a new owner. Hytner Exhibitions had been launched by Gary Hytner in 1993 and built up to a four-staff, circa-£600,000 business before he began looking for the right hands into which to pass it so that he could retire.
The method
“The first stage was speaking to Gary on the phone, going over the numbers and what they were looking to do, and giving Gary all the information about us that he wanted,” explains John Hodson of the initial contact between the two business owners.
“After that I thought there was enough mileage to set up a meeting where we all put our heads together to discuss the two businesses and their potential. With that information, we went to our accountants and bank manager with a comprehensive business plan prepared by me and Jenny,” he adds.
The support of the firm’s accountants, Balwins, and bank, Barclays, was invaluable, Hodson states, with their experience in acquisitions and also their ability to pick apart the strategy and numbers. “They looked at cost and targets and also in this scenario where we had two companies that were so well aligned, to explain the overhead we could save by selling our premises and combining the two into a single site and to help us understand whether we were over- or under-egging this potential opportunity,” he said.
The fact that GH Display and Hytner Exhibitions were two businesses with very similar histories helped give the Hodsons the confidence they needed to drive the acquisition through, explains Jenny. “Where we might have felt that we were making it up as we went along with the purchase of GH Display this time we felt like we had the experience,” she adds.
So, with a deal hammered out, the Hodsons were acutely aware of the need to be inclusive and open with all staff about the situation in both businesses. On one hand they were asking their own team of seven to move to a new premises on the other side of Peterborough and on the other, they would be “invading” the workplace of Hytner’s four staff who had each a been with the firm for between five and 20 years, says Jenny.
She explains: “We went into the acquisition with a very open dialogue and making sure the staff knew that we felt they were doing a great job and had no reason to fear for their jobs.”
In the terms of the deal, it was agreed, after consulting with staff and local employment lawyer PJH Law, that the Hytner Exhibition team would, on paper, continue to be employed by their company under new owners, rather than transferring under TUPE. Meanwhile their contracts would be brought in line with those of GH Display, which, if anything says Jenny, was an improvement for them due to stronger benefits offered by the latter.
With all paperwork in place by the beginning of December the move got underway and thanks to good planning and solid teamwork, involving packing equipment and stands into shipping containers as jobs were being finished, the move was completed in under four weeks with GH Display’s old premises being sold the same month.
“We were very lucky obviously, because it was an existing functioning exhibition company which had all the tools needed, so once we finished in the old place we were immediately up and running in the new one,” John says.
The result
“Since we acquired Hytner everyone has worked so hard to make it a success and we have delivered the two biggest shows that either company has delivered in their histories,” says Jenny, with John adding that the teams have integrated well.
He says: “Jenny and I have continued our culture of inclusion; we keep staff invested by including them in everything that’s going on, ensuring they are aware of all of the pressures the company is under and ensuring they enjoy their successes as well.”
Happily, there have been no job losses, with some new ones even being created where John and Jenny have been able to shed some duties they were previously being stretched to cover. Headcount has grown by five since January, including dedicated designer and print manager roles, and with the Hodsons using the process to learn what staff want from their jobs, many existing positions have been broadened with new skills and responsibilities and supported by the firm’s new business management software.
“Where people had strengths on the Hytner side we seemed to have weaknesses on the GH Display side and vice versa so it seems meant to be as far as the team pulling together goes,” explains John, with Jenny adding: “We want our staff to be happy and so we work on the basis that people are much better when they’re doing something they enjoy.”
Additionally, team lunches and an upcoming family day labelled GH Fest are some of the events the Hodsons have encouraged to build relationships beyond the production floor.
Meanwhile, on the business side the pair say that communication and nurturing relationships has been key in reassuring clients, particularly Hytner’s, that not only is it business as usual but that capacity and skill is now better than ever.
John is confident that the business will continue to hit its 30% annual growth trajectory and says that key to that is keeping on top of standards and quality, which both firms are known for.
“Empowering our staff to take responsibility for their particular area is the way to maintain that effectively,” he says.
“We hope that everyone feels like they are driving the business and that they are part of that and are invested in it. Openness and honesty are very important in terms of how we want our business to grow,” Jenny adds.
Vital statistics
GH Display
Location Peterborough
Inspection host Jenny and John Hodson
Turnover £1.7m; Staff: 17
Established GH Display: 1976; Hytner Exhibitions: 1993
Products Custom-built exhibition stands, custom displays, lightboxes, roller banners, pop-up stands, fabric exhibition stands, modular exhibition stands, custom modular exhibition stands, exhibition and office graphics
Kit EFI Vutek QS3200pro, Blackman & White digital cutter, Mimaki JV300 160SP, Roland Soljet III, Summa S120, Graphtec FC7000 – 130, Casolin Astra 400, Stribig wall saw, AXYZ CNC router
Inspection focus
? Completing a successful acquisition
Top tips
? Be prepared Writing an honest and realistic business plan is imperative, says John Hodson. It will not only show that you have really thought it through but also the process of writing the plan will throw up potential issues
? Get sound advice Whether it’s your accountant, bank or consultant, choose carefully, trust their experience and knowledge and build a good working relationship
? Be considerate Prioritise getting to know the staff and owner of the new firm before the acquisition happens so that you can reassure them about the changes and if possible introduce your teams
? Involve everyone in the journey Be open, honest, respectful and inclusive with everyone – they should feel that the company’s success is their success and the whole team is part of it
