He’s played rugby with a former All Blacks captain, overseen a string of acquisitions and helped grow his father’s small business into one of New Zealand’s largest print and communications firms. No wonder David Atkins describes his life as a “serendipitous adventure”.
It is an adventure that has taken Image Centre Group from its roots as a one-time pre-press house to its current position as a multichannel company with a track record of mergers and acquisitions (M&A). Only this year, Atkins masterminded one of its biggest-ever deals, the buyout of large-format firm Dpod. The takeover brought Image Centre squarely into the small-format sector and proved that neither the company – nor Atkins – have lost the appetite for new markets.
The first thing that strikes you about the Image Centre managing director is how tall and broad he is. It’s no coincidence the 42-year-old is built like a rugby player: he played for Auckland in the 1990s. His teammates included New Zealand captain Sean Fitzpatrick and other famous All Blacks like Zinzan Brooke, Michael Jones, Olo Brown, Craig Dowd and Carlos Spencer. The Auckland side back then had 17 internationals competing for 15 spots, which meant Atkins was generally forced to settle for a spot in reserve grade.
Atkins’ rugby career also took him to Japan, where he played in the national competition from 1993-95. He combined his role as a number eight for Yamaha with a marketing job at the famous motorcycle company. Several factors led him overseas: he was hungry for adventure; his best mate had just signed a contract; and he was keen to experience Japanese corporate culture. Yamaha in particular appealed to him because of his love of motocross racing, a passion he still pursues. The standard of rugby may have been “pretty average”, but he enjoyed the cultural experience and became a competent Japanese speaker by the time he signed off.
Atkins returned to New Zealand with no firm career plan – until family intervened. His father, Syd, co-owned a pre-press shop in Auckland called Image Centre, where Atkins had worked on and off since he was 13. Syd was looking to exit the industry, so his son agreed to join as an accountant and prepare the business for sale. The old man then announced that with Atkins on board, there was no longer any need to sell.
Atkins moved into an account manager’s role six weeks later, before resigning in 1998 to play rugby in Japan and the UK. However, he never made it – he rejoined company just days later after snapping his Achilles in his farewell game in New Zealand. His rugby career was now over, but his professional career was about to take its next step.
Three months later, Atkins was promoted to general manager, and charged with saving the company from a mismanaged acquisition. The buyout of Institute Press in 1997 was accompanied by “poor budgeting and atrocious accounting”, which almost led to Image Centre’s collapse. Atkins learned a valuable lesson from his first acquisition experience: “It taught me to do more thorough due diligence and faster integration.”
Atkins became managing director in 2003 when his father decided to semi-retire. His decade at the top has been one of change. Back then, Image Centre was a solitary company incorporating printing, publishing, pre-press and design with a headcount of 70 and revenue of NZ$13 million. These days it is a diversified group that contains eight businesses, employs 210 staff and is forecast to turn over NZ$55 million in 2012-13.
That eighth business was added in March 2013 with the acquisition of Auckland-based Dpod. Atkins says the deal boosted Image Centre’s revenue by NZ$10 million and turned it into “New Zealand’s biggest digital printer”. The group’s other production businesses are Boston Digital, which specialises in large-format printing and signage, and Imageprint, which handles the pre-press and sheetfed offset work. The group also includes retail agency Hotfoot, digital agency &Some, digital signage firm Ngage, video production business On Digital, and publishing and content marketing agency Tangible Media.
These different arms were added through M&A and organic growth. Image Centre’s history with acquisitions dates back to 1997 when it purchased Institute Press; then came Stredder Print in 2001 and First In Print in 2005. All three were merged into the existing commercial printing operations. Image Centre then made three more acquisitions: Boston Digital in 2009, On Digital in 2012 and Dpod in 2013. The group’s other businesses – Hotfoot, Ngage and Tangible Media – were started internally.
Atkins’ strategy to turn Image Centre into a “seamless multichannel solutions provider” prompted a restructure in 2008 – and also led to the exit of a private equity firm that had held a share in the group for five years.
Realising the potential
Image Centre had been equally divided between Atkins’ father, Syd, and his two co-founders when it opened its doors in 1989. The three partners’ stake dropped to 73.5% in 2000 when they sold a quarter of the company to Direct Capital, with the remaining 4.5% held by Atkins. By 2008, Atkins and his key lieutenants had become convinced that the group was stagnating and needed a management buyout to realise its full potential.
“What prompted it was frustration. We had a vision of being a multichannel solutions provider and our culture had got weighed down with print and our owners had got risk-averse. They were happy to invest in machines but not people,” he says. The five-person board now owns 75%, with key staff controlling the other 25%.
Atkins is quick to praise the talent and experience of the other board members. Former Blue Star chairman Maurice Kidd serves as chairman; the directors are former Clemenger BBDO managing director Roger MacDonnell, ex-Saatchi & Saatchi managing director Mike Hutcheson and Alphabet Soup founder Craig Polley.
“Getting these guys on board to support the MBO really got us cranking. It changed perception in the market and allowed us to attract the talent needed on the executive team to diversify our offering,” he says.
A diverse mix
That diversification can be seen in the work Image Centre does for blue-chip clients Fonterra, Wattie’s and Goodman Fielder, says Atkins.
“For Fonterra we write, design and print several magazines. We do some point-of-sale print, touchscreen kiosks, trade shows and video production.
“For Wattie’s we manage [television program] Food in a Minute. We do video production, website and EDM content, retail activation and print. We also do design, print and installation of promotional print and point-of-sale. They also sponsor Café of the Year, which is a media property we own along with Goodman Fielder.
“For Goodman Fielder we do point-of-sale design and print, vehicle graphics, retail stands, fridge decals and the like.”
Image Centre can call on a diverse range of machinery to manage its production, says Atkins. The sheetfed work is handled by an eight-colour A1 press, a five-colour A1 and a five-colour A2 alongside a Luxel V8 platesetter and folding, stitching and diecutting kit. Its main digital presses are an HP Indigo 7600, Indigo 5000 and Xerox iGen4. The large-format line-up includes two Océ Arizona flatbeds, an HP Scitex FB7600, HP Scitex LX850, HP TJ850, Fujifilm Uvistar, Zund cutter and Esko cutter.
Print retains a dominant share of Image Centre’s multichannel mix, but Atkins says it has to be carefully targeted. Many printers are trying to move upstream from production into other services, but he says it can be easier swimming in the opposite direction. Once you’ve sold an organisation on a campaign, they usually won’t pay that much attention to the technical production methods needed to make it happen, he says. However, print clients can react sceptically if you try to convince them you have the skill and creativity to craft an advertising campaign.
Image Centre isn’t a traditional printer that sells brochures or banners or billboards. It prefers to use its group offering to sell ‘stories’, he says. “We’re about storytelling. We help New Zealand businesses engage their customers by helping them craft world-class stories. Technologies come and go – it’s really about how well you can craft that story and then getting that to market at an appropriate cost.”
The success of the diversification strategy can be seen in Atkins’ financial forecasts for 2012-13. Print will generate 60% of revenue, content Agency and publishing work 15%, retail agency work 11%, digital agency work 10%, digital signage 2% and video 2%.
That diversification may be driven by more M&A activity. Atkins says the group is actively considering acquiring other companies, although he is keeping the details under wraps for now.
Atkins says although selling price is an essential part of any potential acquisition, it is the last thing Image Centre considers. The first step is to look at the quality of the key personnel that would be joining the group. One of the reasons Dpod made such an attractive target was because of its talented chief executive, Andrew Nalder, Atkins says. The second step is to investigate how relevant the other company’s products and skills would be to Image Centre’s clients. The third step is to calculate what sort of economies could be produced. The board will only discuss price if all those boxes get ticked, he says.
One key lesson he’s learned from 15 years of M&A activity is that passion often trumps logic and can easily scupper deals. “Mergers and acquisitions are easy to do on a spreadsheet, but it’s the human side of it that really counts.
“The biggest thing with acquisitions is that it’s an emotional decision. People think it’s rational, but it comes down to emotion. It’s emotional for the people who are selling. You’d think you’d look at it rationally, but people are more concerned with where they park their car, their name over the door and what it means to them in terms of hierarchy.”
Atkins doesn’t want new acquisitions to be squeezed into a one-size-fits-all group. He is wary of creating a bureaucratic and leaden-footed monolith, which is why the different businesses have their own identities. Staff are also encouraged to be flexible, curious, innovative and open-minded, he says.
Part of a team
Teamwork was a key lesson he learned from his rugby days. He could play three of the positions well, but was poor at the other 12, which made him realise that corporate success comes from assembling a diverse range of personalities and making sure everyone is striving for a common goal.
“Internal fragmentation is our enemy and so is ‘silo thinking’. For us, it’s about staying focused on clients. Of course, that’s easier said than done. It’s a constant battle. Cultures change and shift all the time. It’s about dialogue and conversation.”
Image Centre’s solution is to focus on the results the group achieves for each client rather than the financial performance of the individual businesses. The future aim is to foster teamwork across divisions. Another tactic has been to bring the staff from the eight businesses under one roof; 200 of the 210 employees work out of the same Auckland site, with all the creatives on one floor and the production staff on another.
All this emphasis on ‘teamwork’ and ‘flexibility’ may sound like touchy-feely management-speak, but Atkins stresses that it’s the only way the group can provide the sort of efficient one-stop shop he says clients are increasingly demanding. And that this emphasis is only likely to increase. Atkins says Image Centre’s future growth and success will come from more diversification and more cross-selling, which in turn will demand better teamwork and greater flexibility.
Atkins says the future is bright for Image Centre, and that it will continue to help businesses grow with well-crafted stories. “I’m still optimistic about the industry, but I think we’ve got to move upstream and become more relevant to our clients, particularly because in New Zealand we don’t have the scale of Australia. Hopefully we’re moving into smarter and more effective print.”
Career history 2003-present: managing director, Image Centre Group; 1998-03: general manager, Image Centre; 1996-98: account manager, Image Centre; 1993-95: Yamaha Motor Company (Japan), international marketing manager
Education 1989-92: economics and accounting, Auckland University
Hobbies Rugby, motocross, surfing
Family Wife and three children, aged five, eight and 11
David Atkins on…
A life unplanned
I describe my life as a serendipitous adventure. None of it has been planned – it’s been a series of great opportunities, but you’ve got to be able to spot that opportunity when it comes.
New Zealnd vs Australia
I think we’re a lot smaller and, therefore, there aren’t the same niches you can play in. In New Zealand, you have to be more of a generalist and innovative, because you don’t have the scale to focus on one thing.
Playing rugby in Japan
It was pretty cool to have that independence. I look back now and the lessons I learned were cultural – Eastern philosophy versus Western thinking. It was nice to be paid to play. It was bloody good money.
The secret of success
It’s the people. We’ve assembled a great team. Our culture is also important. Because we’re multichannel, we’ve got cultures that align to the markets they serve. We’re not a one-size-fits-all. We’ve got a flexible and curious culture. Learning and innovation is at the heart of it. It’s a place where people can develop.
The value of teamwork
To give that multichannel solution, you’ve got to have teamwork. Anyone who thinks they’re the smartest person in the room is now gone. I’m big on the team focus.
The years ahead
I’m really optimistic about the future. We’ve grown really rapidly. For us, it’s moving more and more from integrated and multichannel to seamless omnichannel.
Future print volumes
I’m expecting our large-format and grand-format along with small-format print to continue to rise. It’s really hard to predict with sheetfed. We will certainly grow this year but beyond that it is hard to forecast both market conditions and the strategic direction we will choose.
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