At the beginning of 2015 Kiwa acquired Finnish company Inspecta. It was the first big acquisition after a year of focusing on consolidation and integration. Paul Hesselink, CEO of Kiwa, and Johan Terpstra, investment director at NPM Capital, look back on a hectic period.
There didn’t seem to be much happening at Kiwa for a while…
Hesselink: “That’s right. At the end of 2013 we had completed 25 acquisitions in a period of four years. At that point we needed to stop and take stock and concentrate on integrating and consolidating. So in 2014 we gave ourselves a year to establish a new structure. We integrated a number of business units, sold off activities that we felt other players could do more with and discontinued activities for which there was no longer a market. And, last but not least, we built a new information system, which will be implemented at the end of 2015. So we certainly weren’t sitting around doing nothing. It was more a case of regrouping and restructuring before moving forward.”
Terpstra: “It also gave us the opportunity to re-examine the strategy. Kiwa and its sister company Shield have grown enormously in recent years through what I call a ‘string of pearls’ approach. It’s an approach that works but it requires tremendous effort. So in 2015 we wanted to see if we could pull off a game changer by acquiring an organisation that was more or less the same size as Kiwa. But first you have to create a suitable platform before you can take the next step.”
Hesselink: “We wanted to continue to operate as a flat organisation but because Kiwa had grown so rapidly, there were more and more reporting lines to a very small board of directors. This was something we needed to address. We now have three ‘service lines’: hazardous substances such as asbestos, certification and knowledge transfer, or, to use our terms, Compliance, Assurance and Information. Each of these service lines has its own executive vice-president with a seat on the executive council, together with the members of the executive board. We developed this structure together with NPM Capital, and I have to say it was a very harmonious process. You could call it strategic thinking with your feet up.”
The acquisition of Inspecta was a certainly worthy challenge. Kiwa suddenly became a company with 4,000 specialists operating in 27 countries. How do you ensure that a process such as this runs smoothly?
Hesselink: “We had known Inspecta for a long time. The acquisition opportunity arose in the autumn of 2014 and the process gained momentum in February 2015. The vendor, 3i, gave us five weeks to arrange the financing and complete the acquisition. That often meant working long hours and conducting frenzied teleconferences with 25 people at three in the morning in order to gain a clear understanding of the legal details. The time pressure was very intense. Neither of us got much sleep during the months of March and April. There certainly wasn’t any time to enjoy life.”
Terpstra: “Some days I would get home just as my neighbour was leaving for work. At a certain point my girlfriend asked me if I had arelationship with her or with Paul.”
Hesselink: “We also went on a trip to Scandinavia to visit the companies and meet Inspecta’s second and third-tier management staff on site. This is something we always do whenever we are considering an acquisition: we want to see how the company is doing with our own eyes. We want to gauge the atmosphere and get a sense of the mindset of the middle management, because these are the people that will have to work with you and for you. I want to know what makes them tick. I also want them to know what makes us tick. The only way to find out is to visit the lab together and then go for a drink in the bar. Then you usually see through the façade pretty quickly. You learn what motivates people and what they're in it for. Are they going to take the money and run the moment the money is on the table, or are we really going to work together to build something? You get a sense of this by wandering around behind the scenes.”
