The chairman of managed print player Ethos Group has weighed in on rival Apogee's sale to HP following his own firm's latest acquisition.
Ethos Group has moved a step closer to its goal of hitting £40m and £10m revenue and EBITDA, respectively, in its fiscal 2019 by grabbing Ricoh partner BCM for an undisclosed sum.
BCM represents privately owned Konica-Minolta, Xerox and Ricoh partner Ethos's sixth acquisition in three years.
Talking to CRN, Ethos owner and chairman Paul Norris said the deal thrusts the London-based firm's revenue and EBITDA runrate to £36m and £8m.
"We're pretty much there [at our target]," he said. "Hopefully we've got another acquisition we should be completing before the end of the calendar year."
Ethos' most recently filed annual accounts on Companies House show EBITDA of £3.8m on revenues of £19.7m, equating to an EBITDA margin of 20 per cent - relatively high even for the lucrative managed print space.
"I'm an accountant by profession and we tend not to shout a lot," said Norris.
"Ethos is a 25-year-old business and we were very established before we started the latest acquisition cycle. About 55 per cent of our business comes from services and recurring revenue, which is high margin.
"What we do well is we transform businesses well. We tend to buy business that are capable of looking like we look once we've integrated them, and the high EBITDA is a result of that."
The managed print space was shaken up last week when its largest protaganist - £170m-revenue Apogee - was swallowed up by vendor partner HP for £380m, with some speculating HP's prime motive is to slowly convert all of Apogee's estimated 110,000 machines in the field to its brand.
Norris claimed the move would have taken all the large print vendors by surprise.
"Now they are looking around thinking ‘what do we do'," he said. "Obviously something was going to happen with Apogee, whether that was a placement or trade sale, but coming when it has come will be a bit of a wake-up call. It quite clearly shows there is high value in the industry, and that [managed print] is a very good, long-term business, and that's a good thing for me. I'm sure that HP do see an element of transformation towards an HP brand, but I think it sends a very clear message to all the very large manufacturers, and I think that's great to see just before Brexit - as I'm sick of all the doom and gloom concerning that.
"I think it would have caught a lot of people on the back foot and caused a lot of players to question their model; whether they should landgrab; their plans for the UK. I actually think it's a paradigm shift. We might look back at this and think pre Apogee-HP and post Apogee-HP - I do think it's that important."
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