Earlier this year, FluidOne, a leading cyber security, IT and cloud services provider, acquired Sheffield-based IT services specialists Highlander UK. Once the dust had settled on the deal, Phil Turner spoke to Highlander’s MD Steve Brown to discuss how he found the process from a business-owner’s perspective.
Could you give us a bit of a background to the acquisition?
We had an approach from someone around five years ago, who came up to Highlander, had a meeting with myself and Rob, who was the major shareholder and the chief exec back then, and they decided they didn’t want to pursue their interest because we weren’t doing enough of a certain type of technology.
However, one of the people that came up for that meeting I got on well with. We kept in touch via LinkedIn and built up a friendly relationship. He was later in London, talking to someone he knew who was working as a director at an IT company. This person said they were looking for businesses to purchase to build a regional network, and the gentleman that I’d met mentioned me and Highlander.
It certainly shows the benefit of networking!
Funny, isn’t it? You get people paying agents to do that sort of work, but our buyers came from a chat out of the blue with someone I had met and got on with. I got a phone call from this chap who asked what was happening with Highlander, and I told him we weren’t for sale. However, I did add that if it was the right business and exit for Rob, it potentially could be.
How did it grow from there?
I told Rob and said we’d have a chat with them first. So, I spoke to this guy, who passed me on to their mergers and acquisitions department at FluidOne. We started the conversations and then almost a year to the date, we were sold to FluidOne.They believe in a business model of people buying local, using local services, knowledge and engineers. So, rather than have one big IT business based in one place with say 500 staff, there should be one regionally that is the centre of excellence, which is us, but then there are branches around the country that service local areas, doing exactly what Highlander do: getting involved in the local colleges, universities, charities and Chamber of Commerce.
Was that the main thing that appealed to this company about purchasing Highlander?
Yes, that and the fact that the cultures matched, amongst other factors. For example, they also liked our high Net Promoter Score (NPS). They saw that our NPS was up around the same numbers as theirs, which is world-class service from both of us. So they were interested in how we did that, how we motivated the people, why so many people at Highlander have stayed here for 10-20 years, why, when they came into the office, it felt like a great atmosphere and people were really friendly. The numbers stacked up, but they were really impressed with our people, systems, processes and everything else.
Part of their remit for growth was that if they buy Highlander it would allow us to do more high end cybersecurity and connectivity with customers we previously didn’t do that with. They’ve also got a good client base of high-quality clients that aren’t buying IT or IT services, so we can get an introduction to them and offer our IT services. So, whilst we’re still growing organically, it’s allowed us to have these extras added into the business as well. So, I think from that point of view, the stars aligned; we’re a solid business, a good fit and a lively office environment.
How did you deal with telling the staff?
We’ve had approaches before and it can be very unsettling. If you tell people early doors it can turn heads and distract. It is hard work finding that balance. So I kept it to myself for as long as I thought was right. We’re a very open and honest business, and I like to tell the guys just about everything, but I didn’t want them getting their heads turned and losing their focus. As soon as I knew ‘this could be the one’ I said, “Right, you need to meet these people. You need to be happy with them and excited for the future as well.”
Then we had the meetings, talking about job roles, the business and FluidOne’s goals. The directors came away from the meetings buzzing and then I realised the problem I’d got on my hands then was if we don’t sell, they were all going to be disappointed. We’d grown organically and nicely for a long time, but some people had hit a bit of a glass ceiling here, others wanted to get into new technologies quicker. This has opened a lot of doors now. It helps that their culture is very similar to ours. And I said to every member of staff that I could look them in the eye and say we sold to the best company we’d met, who had the best values and give us all a chance to grow.
They invest in people, training and systems. I’ve personally invested in the new company and I wouldn’t have done that if I wasn’t confident.
How have things changed personally for you since the deal, and what advice would you give to someone contemplating a sale of their business?
Having a boss for the first time in 15 years or so was obviously going to be different. All of a sudden, there were little things that start concerning you before the deal goes through. What if we need to buy something? What autonomy do I have? What about our ideas? So, it’s important pre-deal to get clarity and make sure that the plan is right. Then it’s almost a case of referencing and checking the people that you’re going to be working with. You know, have they done a good job before? Speak to other people in the industry who’ve worked with them. But ultimately, it is a leap of faith because you are relinquishing some control. So, it’s making sure you spend the time prior to this ensuring that you think they’re the right fit.
What about after the sale?
I think after the sale, it’s doing everything to try and make the integration smooth and for it to not impact other the staff, who will of course have concerns. Our new CEO was keen to stress that we had been bought for who we are – we don’t need any huge changes.
Ultimately, it’s a bit like moving in with someone you’ve never lived with before: there’s going to be some Adjustment and some getting to know you. But I’ve been doing this for 22 years, and every year we’ve changed or done something different, and we’ve grown, developed and improved every year. I think this takeover has given me personally a bit of a kick up the backside and taken me out of my comfort zone a bit.
“You learn something new every day. There is so much we can work on with the wider group, whilst also learning from each other.”
With regards to reporting to someone else in terms of how successful you are, is that now more stressful?
Yeah, that is more stressful. We still cared about our results before, obviously, but if we had a dip or two we just soldier on, and we still will now, however I want to show our value and make sure we keep on the up and impress.
For the first few weeks post-deal, I was driving into work feeling a bit stressed, wondering if a curveball was coming our way but, thankfully, it’s all been okay and actually inspirational to be honest.
On that note, do you feel that the purchase has helped to revitalise yourself from a working perspective?
From my point of view, I think I’ve got my flame burning brighter again. It was interesting that some of the staff who have worked with me for 15 or so years have said they were happy pre-deal but they now realise post-deal that I and others might have been a little bit comfortable at times.
Now it’s exciting that we have the opportunity bring new ideas and products to the table and give our customers great service and more offerings. That’s exciting for us all.
Interested in selling your business? For the latest advice, read Bhayani Law’s guide here.
