{"id":48934,"date":"2022-02-26T06:34:34","date_gmt":"2022-02-26T14:34:34","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=48934"},"modified":"2022-02-27T02:30:15","modified_gmt":"2022-02-27T10:30:15","slug":"acquisition-fueled-growth-buoys-all-copy-products-as-it-battles-toughest-challenges","status":"publish","type":"post","link":"http:\/\/www.enxmag.com\/twii\/dealer-spotlight\/2022\/02\/acquisition-fueled-growth-buoys-all-copy-products-as-it-battles-toughest-challenges\/","title":{"rendered":"Acquisition-Fueled Growth Buoys All Copy Products as it Battles Toughest Challenges"},"content":{"rendered":"\n

It\u2019s been 28 years since he entered the office technology industry, but Brad Knepper loves the business as much now as he did when he was just starting out.<\/strong><\/p>\n\n\n\n

He still gets a charge out of talking to clients, closing deals, locking horns with the competition and, of course, besting them. Knepper\u2019s top executives have been with him pretty much since he purchased All Copy Products in 1999; one is a friend from his grammar school days, another from college. He doesn\u2019t say as much, but loyalty appears to rank high on Knepper\u2019s list of favored traits.<\/p>\n\n\n\n

\u201cI love that things are so different every day\u2014the new products, acquisitions and challenges,\u201d Knepper related. \u201cI love the deal, the strategies, beating the competition. And I\u2019ve got some great leaders to help me along the way.\u201d<\/p>\n\n\n\n

\"\"
Brad Knepper, president and CEO, All Copy Products<\/figcaption><\/figure>\n\n\n\n

For anyone who keeps tabs on the pulse of the industry, Knepper is a familiar face. Whether it\u2019s the Copier Dealers Association, dealer advisory boards for several manufacturers or any number of OEM dealer meetings or excursions, Knepper is there. The president and CEO wonders if he spends too much time away from his ever-growing, Denver-based dealership, but he knows these gatherings\u2014such as the Executive Connection Summit\u2014are too vital to miss. They provide a forum for gaining insight into business\/market conditions, and unfortunately, these meetings also yield a validation and an empirical truth\u2014life in the dealer space is currently more challenging than it\u2019s ever been.<\/p>\n\n\n\n

The last two years may have tested Knepper\u2019s love for the industry, but his resolve remains steadfast. Many questions remain unanswered, such as a clear path to rebuilding and restoring culture in the age of the Great Resignation (or as one dealer noted at ECS, the Great Relocation). It\u2019s a dilemma with no simple answers.<\/p>\n\n\n\n

The loss of print volume has long been reconciled, but supply chain issues and other pandemic-related challenges pale in comparison to the plight (or flight) of employees. While there have long been account executive vacancies at most dealers, including All Copy Products, Knepper currently has a need for 30 to 40 sales reps. He\u2019s also in the market for talented IT professionals to fortify his Verticomm IT services division, a $10 million business on the verge of a bona fide profit breakthrough. Security cameras and hosted phones have provided a much-needed shot in the arm, and an influx of IT professionals may be the missing piece that enables Verticomm to realize its potential.<\/p>\n\n\n\n

Culture Issue<\/strong><\/p>\n\n\n\n

\u201cThis is as big a battle as we\u2019ve had in the past 28 years,\u201d he offered. \u201cWe have to watch our culture very closely. It\u2019s all about setting expectations and not compromising on them. We need to set the right examples; otherwise, we can lose what we spent a lot of time building.\u201d<\/p>\n\n\n\n

But through all the challenges, one thing remains clear. Knepper and All Copy Products continue to build. That\u2019s evidenced by one crazy day during 2021 in which he pulled off two M&A deals totaling 14 branches that added approximately $30 million in sales. The integration of these holdings continue today, but let\u2019s start at the beginning of Knepper\u2019s journey.<\/p>\n\n\n\n

M&A Genesis<\/strong><\/p>\n\n\n\n

Much has changed since Knepper took the helm of a seven-employee operation in 1999. He\u2019d worked for IKON Office Solutions, but made the bold move of taking out a half-million dollar loan at a criminally high interest rate and spent the next 10-12 years building the company primarily through organic growth. Initially a Konica dealer, Knepper added Sharp around the five-year mark and then started down the road of acquisitions, mostly branches in Colorado. He added a small Canon dealer in the mid-2000s and made inroads into Fort Collins and Colorado Springs before reaching outside the state into Phoenix. Today, the dealer has a strong Colorado network as well as a presence in Kansas City, three cities in Arizona (Flagstaff and Tucson in addition to Phoenix), along with Omaha and Lincoln, Nebraska.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

After the initial decade or so, the acquisitions began to steamroll. In all, he\u2019s closed on 26 deals, more than half of which fall in the sub-$1 million range; mostly additions that helped fortify existing holdings. Still, through April of 2020, 65% of the dealer\u2019s growth was organic in offering Konica Minolta, Sharp, Canon and HP products. Verkada security cameras and hosted phones through Intermedia have proven to be pandemic-era springboards to profit, and the January acquisition of a mailing systems dealer (Multiple Services) gave All Copy Products another customer segment in which to offer its rich catalog of products and services.<\/p>\n\n\n\n

Still, COVID-19 has proven to be a tough business maze. At its lowest, All Copy Products\u2019 service revenue dropped to 72% of pre-pandemic levels, a figure that\u2019s rebounded to 94% and is expected to level out courtesy of new client acquisitions.<\/p>\n\n\n\n

\"\"
All Copy Products hosted a client batting practice event at Coors Field, home of the Colorado Rockies. Shown from left are Brad Knepper, president and CEO of All Copy Products; Jeff Huson of the Colorado Rockies; All Copy’s Jamie Ford; Cory Sullivan of the Rockies; and All Copy’s Troy Baranek<\/figcaption><\/figure>\n\n\n\n

\u201cWe\u2019ve gotten to the point where we can stop looking back and start looking forward,\u201d Knepper noted. \u201cWe didn\u2019t sell a lot of new business in 2021, and we\u2019ve traditionally been able to do 50-60% new business and expand into new territories. We\u2019re probably in the 15% range for new business through COVID. We\u2019re growing through existing clients with the security cameras and phones, and we grew the IT business some, but new imaging clients are tougher to obtain the last two years.\u201d<\/p>\n\n\n\n

The Big Close<\/strong><\/p>\n\n\n\n

Wheeling and dealing reached its climax in 2021 when Knepper closed on two deals, one with Konica Minolta for branches in Fort Collins, Colorado Springs and Grand Junction, Colorado; Cheyenne, Wyoming; Flagstaff, Arizona; and Omaha and Lincoln, Nebraska. Seven more southern Colorado locations came in a deal for Gobin\u2019s Inc., a Canon and Konica Minolta dealer not previously covered by All Copy Products. Roughly 70 Konica Minolta employees and 40 Gobin\u2019s team members joined the ranks of All Copy Products on the same day. Knepper also obtained Innovative Office Systems\u2014an FP Mailing Solutions equipment dealer\u2014in late 2020, and the dust has yet to settle from the flurry of deals.<\/p>\n\n\n\n

\u201cThe timing never works out right. I will say that I\u2019ll never try to do two acquisitions totaling 14 branches on the same day ever again,\u201d Knepper remarked. \u201cI handle the due diligence, along with my executive vice president, CFO and VPs of sales. We dig in well in advance, do a lot of homework. We also do a good job of keeping a fair amount of staff we acquire. In a lot of cases, we buy dealers that don\u2019t have strong sales teams, but we look for companies with a strong support staff. If they have good people, we try to keep them. That helps with integration; they\u2019re out there telling clients it\u2019s going to be OK and that not much has changed. They become cheerleaders for us.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
\"\"
An employee lounge and on-site gym are among the perks enjoyed by All Copy Products team members<\/figcaption><\/figure>\n\n\n\n

Knepper had spoken with then-Konica Minolta top exec Rick Taylor regarding certain branches. The two conversed prior to Christmas of 2020, but it wasn\u2019t until after the New Year that talks intensified, and a deal was hammered out in less than three months.<\/p>\n\n\n\n

\u201cThe deal came together so quickly that neither ACP nor Konica Minolta had much time to prepare. But Konica Minolta has worked very closely with us as a great partner getting through the details and I would do the deal again tomorrow. If they came to me with more (branches), I\u2019d say yes but might get a little pushback from my admin staff,\u201d he added with a chuckle.<\/p>\n\n\n\n

Great Relocation<\/strong><\/p>\n\n\n\n

Knepper has been able to maneuver around the loss of customers and business through the past two years by controlling expenses. Those were challenges within his control. The aforementioned loss of employees, however, has been impactful on different levels. Knepper still has his top lieutenants, but a number of middle management personnel\/friends departed, as have other employees who decided to make fundamental changes in their careers and lives. Some wanted to relocate, others preferred jobs that would allow them to work from home on a more permanent basis.<\/p>\n\n\n\n

\"\"
All Copy Products enjoy some Monday Night Football action from a luxury box at Empower Field at Mile High, home of the NFL’s Denver Broncos<\/figcaption><\/figure>\n\n\n\n

When Knepper brought back the balance of his employees on premise, there was some resistance and, subsequently, departures. Like many dealers, All Copy Products finds itself essentially trading employees with other companies\u2014not all of which are office technology firms\u2014whose employees also decided to look elsewhere. That meant more recruiting and training new team members from inside and outside the industry. It was frustrating for Knepper, who initially resisted the urge to make changes to his sales compensation plans despite the fact that many clients simply renewed contracts and kept existing technology in place. In most cases, top reps and management saw their incomes increase year over year despite the drop in sales volume. In hindsight, Knepper believes he should have made comp plan adjustments to mirror the changing business climate.<\/p>\n\n\n\n

In short, it\u2019s simply not sustainable for any dealer. \u201cEmployees are being forced to see the business side of things, and it\u2019s challenging for people to change mindsets,\u201d he said. \u201cI think we\u2019ll see more employees go elsewhere, and they\u2019ll find their new employer will have the same expectations we do. But they weren\u2019t willing to get back on track with us. The compensation on assignments being promised by other industries isn\u2019t sustainable. I feel that tenured reps and managers are making changes that they\u2019ll regret.\u201d<\/p>\n\n\n\n

The upshot for 2022 is that many clients will soon be compelled to make necessary changes and upgrades to hardware and technology as the existing gear continues to age. That will help bolster All Copy Product\u2019s bottom line, even if the MIF counts aren\u2019t significantly increased.<\/p>\n\n\n\n

Say Cheese<\/strong><\/p>\n\n\n\n

With net-new clients at a premium, Knepper has witnessed solid gains in the Verkada security cameras and Intermedia hosted phones proliferated in existing accounts. Copier reps can readily grasp the camera technology, and All Copy Products took the extra step of creating a cabling division to reap another 25% in revenue for installation. Thus, even with cameras seen as a commodity, reps don\u2019t have to face significant negotiations on installation costs.<\/p>\n\n\n\n

The biggest competition comes from clients that would rather spend $50 on a camera from a retail store. But while the imaging quality may be adequate, off-the-shelf solutions are lacking in robust software and some of the key feature sets such as facial recognition, environmental sensors and access control. All three features can be combined and controlled on one pane of glass, resulting in an ROI of months versus years.<\/p>\n\n\n\n

\u201cIt all comes down to finding the right clients that are willing to invest,\u201d he said.<\/p>\n\n\n\n

All Copy Products entered the phone space six years ago with the acquisition of a company that specialized in premise-based phones, believing growth opportunities existed for clients that felt hosted phones were too expensive. But when the dealer saw how hosted systems were more economical on a per-user basis, Knepper and Co. pivoted in that direction. In fact, the dealer swapped out its own fleet of 500 phones and is leveraging its own experience in converting premise clients to hosted systems.<\/p>\n\n\n\n

Growing Pains<\/strong><\/p>\n\n\n\n

The IT division at All Copy Products truly took flight with the 2015 acquisition of Verticomm Technologies. While it has grown to $10 million behind a staff of 60 employees, investment costs have prolonged the ROI Knepper envisioned. He acquired a company that offered private cloud and invested hundreds of thousands of dollars into maintaining a solution that could compete with public cloud options. But while clients generally are attracted to local\/private options for hardware and services, it didn\u2019t translate on the cloud side. Knepper found he couldn\u2019t scale to the necessary degree and is in the process of moving all cloud clients to a public cloud option.<\/p>\n\n\n\n

\"\"
All Copy Products employees support The Angie Vasquez Food For Thought Power Center through donations that help provide weekend meals for children, and team members also assist with the packaging and delivery of the food to various schools<\/figcaption><\/figure>\n\n\n\n

Phones and security cameras have helped set the IT division on the right course, and Knepper is bullish about its future on the condition that All Copy Products can satisfy its IT staffing needs. That remains one of his greatest challenges. Knepper invested in reconfiguring his offices to allow staff, including IT, to be safely distanced on premises, where productivity is best realized.<\/p>\n\n\n\n

\u201cIt\u2019s taken us five years to figure it out, but we\u2019re really poised to become profitable,\u201d he said. \u201cWe\u2019re a large MSP, so we had a scale, we had credibility, and now I think we\u2019re ready to start making money. It\u2019s just taken us a long time. I\u2019ve heard a lot of dealers say the pandemic benefited them on the IT side, but aside from phones, that wasn\u2019t the case for us due to staffing challenges. But I think we\u2019re getting closer to where we need to be.\u201d<\/p>\n\n\n\n

Looking Ahead<\/strong><\/p>\n\n\n\n

Re-establishing culture and obtaining optimal staffing levels will be critical for all dealers to gain traction on the back side of the pandemic, according to Knepper. Commitment is a two-way street, and Knepper\u2014like many of his contemporaries\u2014has demonstrated flexibility. But it\u2019s difficult to compete with employers who continuously lower the bar in terms of hours and on-premise expectations. When other employers make exceedingly employee-friendly promises in their recruiting practices, he notes, it creates a dangerous race to the bottom as it relates to productivity.<\/p>\n\n\n\n

The dealer is unrelenting in its quest to draw in clients. Behind the efforts of Chris Williams, All Copy Products\u2019 marketing director, inbound lead generation via website optimization has produced an average of 55 leads per month. Organic, net-new revenue has increased by $1 million per year as a result, exceeding the goals Knepper and Co. set over the past two years. This has been especially effective in drawing in business for the phone and security camera segments.<\/p>\n\n\n\n

\"\"
Denver Broncos Hall of Fame running back Terrell Davis (seated, with mic) discusses his career with Brad Knepper (seated right) and All Copy Products’ clients during an event hosted in conjunction with Sharp<\/figcaption><\/figure>\n\n\n\n

Knepper believes the acquired companies will be fully integrated by the end of the first quarter. While he would be satisfied with making 2022 the year to concentrate on cross-selling and getting all the new team members trained and up to speed on the company\u2019s offerings, Knepper won\u2019t shy away from acquisition opportunities that advance his game plan. He estimates the company will hit the $110-$120 million mark in 2022, aided by a full year from the Konica Minolta and Gobin\u2019s acquisitions and the other completed deals.<\/p>\n\n\n\n

\u201cI don\u2019t need another acquisition, but every time I say that, three more opportunities will show up that are perfect,\u201d he said. \u201cIt will be nice to use 2022 as a year to focus on getting really good at what we\u2019re doing so that we\u2019re not chasing our tails. I think we\u2019re going to have a nice growth year, but I\u2019m going to be conservative with our forecast. We\u2019re not going to add 40 salespeople tomorrow, but I think we can position ourselves so that in 2023, we\u2019ll be ready for a really big growth year.\u201d<\/p>\n\n\n\n

Supercharging the Revenue Engine: Knepper\u2019s Plans for Generating Organic and Acquisition Growth<\/strong>

In spurring growth during the most challenging of business environments, All Copy Products President and CEO Brad Knepper has opened the door to increased opportunities through adding new products, optimizing his sales and support teams and adjusting the firm\u2019s market approach.

Client retention has been a critical focus during the past two years. To that end, All Copy Products added a team of account managers that overlay its copier sales team, including IT sales reps selling phones and security cameras and specialized reps for mailing equipment, water and coffee, and MPS. That helps with matchups in competitive scenarios against dealers that have a single sales team backed by a support staff.

\u201cWe feel that having this level of expertise going into an account gives us a leg up on the dealers with one person trying to sell everything,\u201d he said.

While net-new business has been tough to ferret out during the pandemic, Knepper is mindful of the types of clients he onboards through future acquisitions. Some of the clients are better geared toward lifestyle-sized dealerships and companies in the $500,000 to $750,000 revenue range as opposed to a $100 million-plus performer such as All Copy Products.

However, when Knepper buys a firm that specializes in postage meters or phone systems, oftentimes they have relationships with larger end-users. That enables Knepper to offer these newly acquired end-users a wider breadth of products and services. Thus, onboarding the right clients will be vital to net-new growth.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s been 28 years since he entered the office technology industry, but Brad Knepper loves the business as much now as he did when he was just starting out. He still gets a charge out of talking to clients, closing deals, locking horns with the competition and, of course, besting them. Knepper\u2019s top executives have been with him pretty much since he purchased All Copy Products in 1999; one is a friend from his grammar school days, another from college. He doesn\u2019t say as much, but loyalty appears to rank high on Knepper\u2019s list of favored traits. \u201cI love that things are so different every day\u2014the new products, acquisitions and challenges,\u201d Knepper related. \u201cI love the deal, the strategies, beating the competition. And I\u2019ve got some great leaders to help me along the way.\u201d For anyone who keeps tabs on the pulse of the industry, Knepper is a familiar face. Whether it\u2019s the Copier Dealers Association, dealer advisory boards for several manufacturers or any number of OEM dealer meetings or excursions, Knepper is there. The president and CEO wonders if he spends too much time away from his ever-growing, Denver-based dealership, but he knows these gatherings\u2014such as the Executive Connection Summit\u2014are too vital to miss. They provide a forum for gaining insight into business\/market conditions, and unfortunately, these meetings also yield a validation and an empirical truth\u2014life in the dealer space is currently more challenging than it\u2019s ever been. The last two years may have tested Knepper\u2019s love for the industry, but his resolve remains steadfast. Many questions remain unanswered, such as a clear path to rebuilding and restoring culture in the age of the Great Resignation (or as one dealer noted at ECS, the Great Relocation). It\u2019s a dilemma with no simple answers. The loss of print volume has long been reconciled, but supply chain issues and other pandemic-related challenges pale in comparison to the plight (or flight) of employees. While there have long been account executive vacancies at most dealers, including All Copy Products, Knepper currently has a need for 30 to 40 sales reps. He\u2019s also in the market for talented IT professionals to fortify his Verticomm IT services division, a $10 million business on the verge of a bona fide profit breakthrough. Security cameras and hosted phones have provided a much-needed shot in the arm, and an influx of IT professionals may be the missing piece that enables Verticomm to realize its potential. Culture Issue \u201cThis is as big a battle as we\u2019ve had in the past 28 years,\u201d he offered. \u201cWe have to watch our culture very closely. It\u2019s all about setting expectations and not compromising on them. We need to set the right examples; otherwise, we can lose what we spent a lot of time building.\u201d But through all the challenges, one thing remains clear. Knepper and All Copy Products continue to build. That\u2019s evidenced by one crazy day during 2021 in which he pulled off two M&A deals totaling 14 branches that added approximately $30 million in sales. The integration of these holdings continue today, but let\u2019s start at the beginning of Knepper\u2019s journey. M&A Genesis Much has changed since Knepper took the helm of a seven-employee operation in 1999. He\u2019d worked for IKON Office Solutions, but made the bold move of taking out a half-million dollar loan at a criminally high interest rate and spent the next 10-12 years building the company primarily through organic growth. Initially a Konica dealer, Knepper added Sharp around the five-year mark and then started down the road of acquisitions, mostly branches in Colorado. He added a small Canon dealer in the mid-2000s and made inroads into Fort Collins and Colorado Springs before reaching outside the state into Phoenix. Today, the dealer has a strong Colorado network as well as a presence in Kansas City, three cities in Arizona (Flagstaff and Tucson in addition to Phoenix), along with Omaha and Lincoln, Nebraska. After the initial decade or so, the acquisitions began to steamroll. In all, he\u2019s closed on 26 deals, more than half of which fall in the sub-$1 million range; mostly additions that helped fortify existing holdings. Still, through April of 2020, 65% of the dealer\u2019s growth was organic in offering Konica Minolta, Sharp, Canon and HP products. Verkada security cameras and hosted phones through Intermedia have proven to be pandemic-era springboards to profit, and the January acquisition of a mailing systems dealer (Multiple Services) gave All Copy Products another customer segment in which to offer its rich catalog of products and services. Still, COVID-19 has proven to be a tough business maze. At its lowest, All Copy Products\u2019 service revenue dropped to 72% of pre-pandemic levels, a figure that\u2019s rebounded to 94% and is expected to level out courtesy of new client acquisitions. \u201cWe\u2019ve gotten to the point where we can stop looking back and start looking forward,\u201d Knepper noted. \u201cWe didn\u2019t sell a lot of new business in 2021, and we\u2019ve traditionally been able to do 50-60% new business and expand into new territories. We\u2019re probably in the 15% range for new business through COVID. We\u2019re growing through existing clients with the security cameras and phones, and we grew the IT business some, but new imaging clients are tougher to obtain the last two years.\u201d The Big Close Wheeling and dealing reached its climax in 2021 when Knepper closed on two deals, one with Konica Minolta for branches in Fort Collins, Colorado Springs and Grand Junction, Colorado; Cheyenne, Wyoming; Flagstaff, Arizona; and Omaha and Lincoln, Nebraska. Seven more southern Colorado locations came in a deal for Gobin\u2019s Inc., a Canon and Konica Minolta dealer not previously covered by All Copy Products. Roughly 70 Konica Minolta employees and 40 Gobin\u2019s team members joined the ranks of All Copy Products on the same day. Knepper also obtained Innovative Office Systems\u2014an FP Mailing Solutions equipment dealer\u2014in late 2020, and the dust has yet to settle from the flurry of deals. \u201cThe timing never works out right. I […]<\/p>\n","protected":false},"author":166,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1643],"tags":[],"_links":{"self":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/48934"}],"collection":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=48934"}],"version-history":[{"count":6,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/48934\/revisions"}],"predecessor-version":[{"id":49054,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/48934\/revisions\/49054"}],"wp:attachment":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=48934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=48934"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=48934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}