With its own premises in tatters, the company moved into those of Buckingham Colour Group. Both companies had long considered a merger, and were finally prompted to complete one in February, 14 months after the explosion.
“We were right in the very thick of it [the explosion],” says Spence. “Our building was rendered totally useless – the shock wave from the blast moved the cylinders on the presses. We had 60 pallets of promotional print ready to go out that Sunday morning. We lost work that all had to be replaced by clients because our machines were all out of commission.”
Fortunately, Colour Quest had thought ahead. All of its data was saved, so client continuity was assured. The company was up and running again within three- and-a-half weeks. But there was still the problem of the damaged site to be overcome.
Fortuitously, help from a neighbour was at hand. Richard Knowles, founder of Buckingham Colour Group, says: “Tyrone and I knew each other through the BPIF and had been talking for a year or so, mostly in various bars, about the possibility of joining forces. Although we’re both predominantly Heidelberg B2 houses, I can recall only one customer that we ever overlapped on. After Buncefield, it made a lot of sense to talk again.”
Perfect fit
The merged company, which is also known as BCQ Print, operates from within Knowles’ 2,600sqm premises outside Buckingham. The freehold site had been custom built five years earlier as part of the business’s expansion plans. While most mergers might reflect the trading difficulties of at least one of the parties, this one has parity written all over it. At a stroke, BCQ has doubled two £5m turnovers, generated through complementary, rather than conflicting, customer bases. Buckingham Colour’s solid core of end-users now sits neatly alongside Colour Quest’s reach into the on-demand print management sector.
Existing skills sets have meshed equally comfortably, with the merger having resulted in only a 15% fall in the companies’ combined staffing levels through natural wastage or the reluctance of a handful of Colour Quest personnel to relocate.
The number of five- and six-colour Heidelberg Speedmaster 74 offset presses has been pared down to four, after an old model was ditched. But BCQ has invested £300,000 on a Heidelberg ST350 stitching line and a Screen 6600S thermal platesetter.
Spence and Knowles, meanwhile, have slotted happily into their roles of joint managing directors, with Spence focusing on the customer-facing aspects of the business, and Knowles overseeing the operational and financial side. IIn sync as they clearly are, Spence and Knowles are something of a double act. They regularly supply the punchlines to each other’s jokes. But for all the chemistry, they still had to undergo a rigorous three-month legal process of due diligence before the merger. While coy about the costs incurred, the outlay on fees alone clearly wasn’t cheap.
Juggling schedules
Then there were the logistics of shifting 70 tonnes of machinery from the Hemel Hempstead site, plus juggling two sets of schedules to minimise any disruption to work in progress.
A mutual trust and respect for points of view that were not always complimentary were a given from the outset. A clear understanding of personal long-term goals beyond the balance sheet, however, is a key ingredient that other mergers sometimes overlook, says Spence. “That is why two out of three marriages fail: they work on the current, but are not thinking ahead,” he adds.
With all the right ISO14001 and FSC accreditation boxes ticked, and a state-of-the-art building to move into, Spence has now been relieved of having to tidy the post-Buncefield mess. It would be missing the point, though, to assume that Colour Quest had most to gain. Knowles too has benefited significantly from spreading Buckingham Colour Group’s overheads. “The hedge still needs cutting, whether there are one or two occupants on the site,” he says.
B2 is a fiercely competitive sector to be in. “With the web guys poaching from the B1 area, they in turn are poaching from B2 – which itself is now everywhere – it could be digital, it could be B3,” says Knowles.
“There is a lot of offset capacity that will remain in the future. But there is so much going the digital way, and these digital presses are only the mark-one stage. The next-generation kit is going to be truly amazing.”
BCQ is surely unique among UK printers in maintaining both Indigo and iGen3 systems in equal strength, with Spence having invested in a seven-colour Indigo 5000 press only six months before decamping to the Buckingham site.
Knowles says the combined capacity works well. “Probably 20% of our turnover is generated via more than 1,000 different customers online, of which 80% is digitally printed,” he adds. “That, along with direct work, makes digital about one-third of total turnover. Our digital output is highly versioned. Many digital printers are into litho replacement, which is just short-run jobbing production. Even the kit suppliers will admit those using digital to its full potential are relatively few.”
Helping to feed BCQ’s twin iGens and Indigos is Buckingham Design Associates (BDA), an in-house venture established by Knowles before the merger that now generates more than £1m in turnover on its own account. There are other digital drivers, too. For example, BCQ is the only UK printer that can digitally print the stochastic backgrounds compliant with the revolutionary Anoto digital pen-and-paper technology.
School yearbooks
BCQ has a majority stake in a company specialising in the production of class yearbooks. This side of the business is doubling every year and this summer, 268 schools were serviced, with each order averaging out at 100 books. The firm also has a tie-in with Mirror Group Newspapers to reproduce versioned front covers drawn from an archive dating back to 1903.
“This industry is not just about ink on paper,” says Spence. “That will reduce over the years. Run lengths will go down and digital forms of delivery will increase.”
Consolidation, rather than investment, seems to be the order of the day, although the development of a 1,300sqm warehouse facility has the planning approval to go ahead as soon as the new company is ready.
Knowles and Spence say they would like turnover climb to about £13m within the next two years. The platform for growth is in place, and BCQ has the shared vision and drive to make it happen.
FACTFILE
Printer Buckingham Colour Quest (also known as BCQ Print)
Turnover £10m
Number of staff 117
Problem Healthy trading, but a need to take costs out of each business
Solution Pooling resources under one group name
A SUCCESSFUL MERGER
The ingredients
1 Mutual respect and trust are essential, but are not enough. Be prepared to allow for a full due diligence audit of what each party will bring to any merger
2 Establishing a legally binding agreement may be time consuming and costly, but it is worth it. Both parties know where they stand, and if there are any flaws in the proposition, the lawyers will find them out before it’s too late to back out
3 Hitching your wagons together is just for starters. What lies ahead is likely to be infinitely more important. You must have a forward plan and an end-game in view
4 Play to your strengths. Partnerships work best when they give full rein to complementary skills – that way you can both be boss
5 Don’t look back. For whatever reason, you’ve joined forces because you needed to
Firms realise double vision
Buckingham Colour Quest (BCQ) started with a bang literally. The blast at the Buncefield oil storage depot in Hertfordshire, to be precise, in 2005. The damage this inflicted on B2 litho and digital print manufacturer Colour Quest, in nearby Hemel Hempstead, resulted in an ascent for the business that owner Tyrone Spence could hardly have expected.
