Ready, Steady, Go!

Comms Business catches up with Wayne Martin, CEO of GCI and winner of our Entrepreneur of the Year Award for 2014 to find out how the company is developing and his views on the market.

Comms Business Magazine (CBM): How do you set about growing a business? For example, how should you approach acquisitions?

Wayne Martin (WM):The GCI journey and our acquisition strategy have changed over time.  Initially the company started in April 2000 as a switchless reseller with no infrastructure of its own. By 2006/07 we had taken the strategic decision to base our expansion on infrastructure ownership and started to build a data and network business. We scoured the market to buy businesses that would move us away from being a reseller to becoming a network owner where multiples are bigger. Our first purchase was IP Infrastructures in Wakefield. It was a milestone for GCI and a demonstration of our focus on the type of technology business we wanted to be – a total solution provider and in control of our own destiny and this has paid dividends.

Since then most of our acquisitions have been about acquiring technology and skill sets. We carried out gap analysis on our own operations to see what we did not have, what we wanted, what we could buy and what we could build for ourselves.

Two years ago we identified a gap and acquired technical skill sets for the business enterprise space. At the same time we also identified cloud as being strategic for us  – cloud telephony and cloud at the desktop. For the first time we decided to not pay top dollar for a firm that was likely to have technology that would be out of date quickly. Instead we recruited Scott Riley to build our own offerings in house as brand spanking new on our own networks and as our own branded labels. Today that business delivers around 20% of our business and has been achieved without the need to spend very high multiples of EBITDA on acquisitions.

CBM: Once you have acquired a firm how do you then best integrate it in to the existing business and how would you measure the success of the acquisition on the overall business?

WM: The most difficult part and one I underestimated, was the cultural issue. It’s a very complex aspect of integration. I recall a seminar some years ago that I attended where a guest speaker said the easiest thing to do in integration is to sack everyone. It’s definitely not a strategy I would advocate but after 21 acquisitions to date there are certainly challenges in integration that need to be considered.

For acquisitions to be successfully integrated we have to invest in time and bring people up to speed with our business strategy. Get staff to the point where they want to buy in to our vision in their own right and follow our journey. There will be casualties and collateral damage along the way – some cannot make the transition and this needs acknowledging from the outset and a plan to make sure you are covered. It also provides staff with the opportunity to step up to the mark.

CBM: Ofcom is currently about to start a ‘once in a generation’ review of the UK communications market. What would be on your wish list for an outcome from this review?

WM: Who have they been talking to? Ofcom has not canvassed our opinion or others we know of so I believe any outcome is likely to be flawed. I am not inspired by this.

GCI is a national business with a strong regional approach and as for a wish list Openreach is a key issue. We would like to see far stiffer penalties on Openreach in place for the damage they inflict on ourselves and our customers. We would like to see an SLA that had a representative set of penalties. Every time Openreach turns up at the wrong place and at the wrong time it is GCI that is held responsible by the customer. Stiffer penalties are the only way to govern them and the only stick to beat them with. I don’t want to be saying we want to manage the local loop ourselves but Openreach need to provide an enterprise grade service.

CBM: Looking ahead, what are your key objectives for the business?

WM: Over the last 12-18 months GCI has spent a lot on re-engineering our network ready for our next phase of growth. We have only completed a couple of acquisitions in the last two years.

Today all of our platforms, cloud, desktop integration, telephony and wide area networks are all less than 12 months old. They are ready for growth – both organic through cross and upselling our base and acquisitive growth. In fact we have just had the best ever sales month in August!

As a £55m company we need to acquire and have three large deals in play that will drive top line sales as well as EBITDA. As of 1 July GCI is 100% debt free so we have funds to drive forward with some good acquisitions over the next 3-6 months. Our aspiration is to become a £100m+ firm in the next 12 months and our achievement of this will come down to targeted acquisitions passing litmus tests and due diligence – they will have to tick all the boxes.

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David Dungay

Editor - Comms Business Magazine