"I say this in all humility: a lot of people are intimidated by the US market."
That's Nana Baffour's musing on why his large reseller competitors - such as the UK's Computacenter, and France's Sopra Steria - are still just looking for a strategic entry into the US, as opposed to having achieved one.
Indeed, just two months ago, Computacenter chief executive Mike Norris confirmed to CRN that a US deal was "no closer" to fruition, despite revealing that he was eyeing "an eight-figure" acquisition as far back as July 2017.
Meanwhile, despite only taking the reins as CEO of the Amsterdam-based IT services firm Getronics in October 2017, Baffour shocked the channel in July this year when news first broke that his firm had bought out US IT services company Pomeroy.
It claims to employ 4,000 staff across 25 locations in the US and Canada and holds 10 locations in western Europe.
Headquartered in Kentucky, and with a vendor portfolio including HPE, Intel, Dell EMC, HP and Cisco, Pomeroy produces revenues larger than Getronics' €500m a year.
With its buyout, Getronics more than doubled its size at a stroke to $1.3bn (£1bn), and created a company with more than 9,000 employees.
In an exclusive interview with Channelnomics Europe, Baffour said that its mammoth acquisition will be fully integrated within 12 months and, when completed, will give the IT services firm an edge over its competitors.
"I think we have a huge advantage," Baffour said.
"The US is a large, important market…But it really feels like home to me. I spent 10 years of my career as an entrepreneur building businesses in the US before I went global. I ran Strategic Technologies which I sold to Datalink in 2012.
"And I'm a US citizen. I live in New York. That all gives me an advantage over other European companies - I understand the culture and psychology of a US company such as Pomeroy."
Baffour puts his success in securing a major US acquisition so quickly down to three factors: being a private company, Baffour's background as a former banker, and the company's managerial diversity.
"We are definitely helped by being a private company. We were able to raise close to $820m, which is an incredible amount of money.
"We could do this because we are more agile and could get the investors together to make our case that we had a compelling proposition more quickly," he said.
"I also used to be a banker in New York and London. I've led global acquisitions before, so I didn't need anyone else to come in and run this for me. I think that experience is really invaluable."
A global mentality
Baffour added that diversity on Getronics' management board is helping the company to be "truly global".
"Our new global head of sales, Paul Fox [who was appointed last month] used to live in Kentucky, so he really knows the culture," said Baffour.
"Imagine a UK company coming in and trying to do this; they wouldn't have the same insights as us. There's no substitute for living abroad and so the diversity in our management board is a significant benefit for our business over the long term."
Providing more details on the integration of Pomeroy, Baffour said he has instructed his team to seek a "five to seven per cent cut" in Getronics' $1bn cost base.
He didn't specify how much of this would be made through job cuts, but did indicate that the majority of cost savings would come from Pomeroy, rather than Getronics' European operations.
Needless to say, since Nana Baffour took control of Getronics the company has already undergone a rapid transformation.
Baffour himself conceded that, in the past few years, the firm had "lost its shine", with a failed foray into the US market, assets being sold off by owners, and subsequent declines in revenues.
Between 2006 and 2012, Getronics was owned by Dutch telco KPN, which led its first attempt to expand into the US.
However, with Getronics unable to maintain both its core European operations and expand into the US, it proved a failed initiative.
KPN eventually pulled the firm out of the US, Canada and Mexico through selling up to US reseller giant CompuCom for a loss.
Alastair Edwards, senior analyst at Canalys, explained that Getronics' first attempt to dominate as an entrant in the US was a hugely costly gamble.
"It's interesting to reflect on Getronics' ‘transformation' over the last 15 years," he said.
"Before it was acquired by KPN in 2006, it had revenues of €2.6bn and coverage in 25 countries. KPN's acquisition at the time, for €766m, was one of the biggest examples of SP/SI convergence, and seen as an opportunity to boost KPN's position as a provider of IT services.
"Ten years later it was sold for only €220m and had revenues of €500m."
Nonetheless, Baffour said that he saw potential in an organisation with a portfolio that can help customers "manage complexity in a holistic manner", going so far as calling it "the most undervalued tech services firm in the last decade".
Putting his money where his mouth is, he snapped up Getronics via his Brazil-based investment company Bottega InvestCo, of which he is the main investor.
Baffour was installed as chief executive shortly after, and has set about turning Getronics into a true "global powerhouse player".
$2bn by 2020
Part of that is being achieved via acquisition, such as that of Pomeroy.
"Negotiations with Pomeroy started in November. They approached us," Baffour said.
"There were a lot of potential buyers; a couple of companies had fireside chats with Pomeroy's management. We left that meeting feeling like it was a good fit with what they were trying to do and how we are going to accelerate their vision in five years.
"And for us, we wanted to be in the US because it was a big gap in our geographic coverage, and it was a great way to do it - rather than buying something small and then building it up."
Expressing steadfast confidence, Baffour said he has already told his employees that the company is now targeting almost doubling in size again, hitting revenues of $2bn by 2020.
Baffour said he envisages only 30 per cent of that growth to be achieved organically, revealing that he will continue being aggressively acquisitive.
This means Getronics is aiming to add $490m to its top line through M&A alone over the next two years.
Breaking down the worldwide growth targets
So where next for Getronic's M&A road map?
Despite now having a larger business and headcount in the US, Baffour said he still considers Getronics to be a European company.
What has changed is that although Getronics is officially headquartered in Amsterdam, the CEO said its London office is considered to be a more important corporate base.
Baffour also spoke about the importance of growth in the French market, following Getronics' second acquisition this year of Paris-based integrator ITS Overlap, which logged sales of €52.7m in 2017.
The CEO claims that Getronics' French business is now gunning for €250m revenues by 2020, more than double its current size of "a little less than €100m".
"France is increasingly becoming one of the more interesting, dynamic economies in Europe," Baffour said.
"We also have some unique assets in France that we don't have anywhere else.
"A significant part of our cloud platform is actually a result of the Colt acquisition [in 2016], which is disproportionate to the other services we have.
"So we needed to get some other complementary solutions to that, which is where ITS Overlap came in.
"France is also one of the top six countries where most multinationals are from. And, for us as a global business, it's great to be where the headquarters of these multinationals are."
Germany, too, is an M&A target. Getronics currently pushes around €35m in Germany, a figure Baffour is determined to grow to around €100m through acquisitions.
"We would also love to be bigger in Germany. When I think about where I want to be, our current proposition is a mismatch: we should be bigger in Germany than we are, much bigger," he said.
Following the news that Getronics had re-entered the US market, Canalys' senior analyst Alastair Edwards suggested that for all the high-profile attention Getronics' acquisition of Pomeroy has generated in the channel, the firm may have more difficulty overcoming the negative connotations associated with its past.
"I think one of Getronics' biggest challenges is its brand, which will hold negative associations and links to a legacy, slow-moving business for many," Edwards previously said.
In response, Baffour rejects the portrayal, insisting that Getronics has merely evolved with the times.
"The idea that there is this huge question mark on us is just not accurate," he said.
"Our market is different. The Getronics of 11 years ago was very much large enterprise, end-user support, like Shell [the oil and gas company]. As it turns out, that ended up being quite a low-margin business.
"The Getronics of today has two types of customers. We also have the large enterprises, but frankly most of our gross margin is coming from mid-market customers who we do a lot more for than just end-user support. What we do now is a much more holistic solutions set that is consistent with customers… So from a brand perspective, we've changed.
"From 1 September, Getronics will be 131 years old. I think we are older than IBM.
"Of course nobody is around for 131 years without getting some dents and bruises along the way, but also without having at its core some key fundamentals, and in our case it's always having a focus on the end users of our clients."
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