Why did you decide to follow a buy-and-build strategy?
Why did you decide to follow a buy-and-build strategy?
Stijn Vandeputte: In the Information technology business it requires a lot of energy to win a customer from your competitor which means that companies like ours tend to grow by acquisition, as we have done ever since 2002.
We serve smaller and medium-sized companies that do not usually have an internal head of IT and therefore they need an IT services provider that can support them from A-Z.
So our strategy is to provide a full range of software and services and to install as many of them as possible to each customer. We use acquisitions to gain more customers but also to add new products and services that we can then cross-sell to all our customers. We are always looking to expand our footprint with every client – the more products you can sell to your customer, the fewer competitors you have.
Arnaud Dufer: IT services for smaller companies is a pretty local business; Trustteam’s customers were within 20km or 30km of its offices but even though Trustteam is based in Kortrijk, Belgium, which is close to the French border, when we invested it had no customers in France. The border is a genuine barrier, and we could see the opportunity for Trustteam to grow by acquiring IT services companies in north-eastern France close to the areas the company already covered.
What made this partnership the right one for both companies?
What made this partnership the right one for both companies?
AD: Stijn had already done small bolt-on deals in Belgium, so he was very experienced at integrating acquisitions and the operating model he had developed at Trustteam was best-in-class. We knew that by accelerating this buy-and-build strategy, it would add a lot of value to Trustteam and to the companies acquired by making operational improvements as well as increasing ARPU (Average Revenue Per User) through cross-selling and up-selling, and improving customer satisfaction. We also knew that Trustteam’s reporting was excellent because they had worked with financial sponsors before and had made numerous acquisitions. This is crucial because if you want to double or triple the size of the company you must have excellent reporting from day one, which Trustteam had.
We have looked at a lot of businesses like Trustteam in the past, but it was Trustteam that generated the best performance– that was key to our decision to go ahead.
AD: And finally, Stijn reinvested 80% of his proceeds in the deal, which gave us a lot of confidence that everyone was aligned.
All the acquisitions we had done before Ardian invested had been small but once they were on board we could look at acquiring much bigger IT services companies, which allowed us to grow a lot faster.
SV: Everyone in France knows Ardian, so they were able to open a lot of doors for us to develop in this region. Having them as our partner gave us confidence to take on much bigger transactions because we knew they had the expertise in supporting successful external growth policies and the financial strength to support us.
AD: We developed a very close working relationship during our time together. Our team supported Trustteam during acquisitions, taking care of financing, negotiation, due diligence and so on.
It was like one team, Ardian and Trustteam working together in a very open, transparent way.
AD: We were in contact at least weekly and sometimes daily when we were looking at possible targets.
What was the outcome of your strategy to build an international IT services player through cross-border acquisitions?
What was the outcome of your strategy to build an international IT services player through cross-border acquisitions – how much did the size and shape of Trustteam change during this period?
SV: We have worked with private equity funds from the beginning and at the start of every investment our idea is always to double the size of the company with our new shareholder.
We have always been successful, but between November 2018, when Ardian invested, and June 2022, when they exited, we exceeded our business plan and tripled the size of the group.
SV: Our turnover in France is now equivalent to that which we achieved at the time when Ardian invested. So it was a real transformation of the company – as the name of Ardian’s Expansion team suggests, the idea was to grow bigger and accelerate our growth rate. We succeeded because one of Ardian’s main focuses is to agree a business plan that is sound but then to go further than the plan, not just to achieve it.
AD: Together we successfully completed six bolt-on acquisitions in France and Belgium in three years, so that now France represents more than 30% of the group’s revenues. The key to that success was the quality of our relationship and the operational excellence of Trustteam. They have worked for years to optimize every process and have achieved unparalleled efficiency and profitability. That is a constant drive within the company, and it is why they can add so much value to the companies they acquire.
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30 %
of the group's revenues are generated in France
Why did you decide to involve new managers in the group's capital and to share part of your realised gains?
Why did you decide to involve new managers in the group's capital and to share part of your realised gains?
AD: When we invested in the company the team’s commitment was clear but we both wanted to make sure that the management teams at the companies we were planning to acquire would be fully aligned with the vision we had set out.
We therefore worked with Stijn to enable the new managers to take a stake in the group and to feel fully involved in its long-term success.
SV: Before we partnered with Ardian, we did not have a scheme that allowed staff to take a stake in the group. That was an important change. Before there were two management shareholders, but now we have around 18 managers who are also shareholders.
AD: Finally, it was important to us to involve all employees of the Trustteam Group in its success. We therefore decided to pass on part of our realised gains to all 254 employees. So everyone shared in the gains that we made together.
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Stijn Vandeputte Founder of Trustteam
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Arnaud Dufer Head of France and Belgium, Expansion, Ardian
