Super Group profiles - part 1

By The Drum, Administrator

October 11, 2007 | 6 min read

But before we move on to the profiles, The Drum has caught up with Hasgrove’s chief executive, Rod Hyde to discuss the recent acquisition of Pavilion and Odyssey.

The two companies now join Connectpoint, The Chase and Interel in Hasgrove’s burgeoning portfolio of businesses.

“We spent a long-time looking,” says Hyde, “and it was a bit like buses, in that two came along at the same time.”

“It was right for all parties and it just so happened that both businesses are in Manchester. We’d been looking all over the country to provide a real catalyst into the group on the digital side. We have very strong credentials for design with The Chase and great credentials in PR with Interel, and a very strong regional agency with Connectpoint, where there is a digital offering, but we were looking to give it a boost.

“We’ve managed to come across two organisations who believe it’s the right time to do what they’ve done, because they can move onto the next step and be part of the Hasgrove group. They won’t lose their identity or the vision and strategy that they want and they don’t have someone over in New York telling them what to do. They tell us how they want to grow and we support them.”

Here lies Hasgrove’s approach. Its ownership is billed as being a support network for the growth of individual businesses, but with the risks significantly reduced.

Speaking of Odyssey, Hyde says: “Those guys are still in their mid-thirties and they’re ready to take the next step. With this deal, they’ve been able to take some risk off the table, because they’ve taken some cash, but they’re still in the business. They’re ready to grow it and that’s what Hasgrove is all about – backing businesses to go on to the next step. And that includes maintaining the culture and doing everything almost in the background. But then there are the benefits as well of having sister companies they can work alongside.

“One of the reasons Hasgrove started in the first place was because we wanted to take advantage of how the world was changing so quickly,” says Hyde. “When you run a small business, there’s a tendency to have your head down and be focused on your own company. One of the advantages of joining Hasgrove is that it gives the management teams the opportunity to take a step back and look at the bigger picture.”

Hasgrove is also keen to stress its European credentials. Its acquisition of Interel, a Brussels-based PR and public affairs agency, in 2006 has already opened doors for The Chase and Connectpoint and the group has plans afoot for Pavilion and Odyssey to enjoy similar benefits. Joining Hyde and The Drum is Liane Grimshaw, managing director of Pavilion, who is forthright about the agency’s European aim. “We’ve always had ambitions of getting into Europe and we already handle pan-European work, but this deal allows us to accelerate that. We can expand into Europe in a much more efficient way.”

So is there a plan to open a Pavilion base in Brussels? “Hopefully,” says Hyde, “and sooner rather than later.”

Odyssey’s joint managing directors Nigel Danson and Johnathan Briggs will remain at the helm of the business and outlined their plans to The Drum. “We’re looking to grow and add value to the business. There’s lots of synergy between Odyssey and Interel, so there are lots of opportunities for us – particularly in corporate communications.

“Although the earn-out effectively comes to an end in 2010, we want to stay on past that. We have some grand plans for Odyssey and we have the ultimate freedom to do what we want for the good of the company.”

Pavilion’s founding partners Gerry and Vikki Ashton will become non-executives of the agency, leaving Grimshaw to lead the business’s integration into the Hasgrove empire.

As well as the Ashton’s, Grimshaw and the management team stand to benefit from the earn-out, ensuring the incentives for profit are still present.

“I like to think of it as earn-in,” argues Hyde, “because for three or so years the old shareholders are still benefiting from being past shareholders and gradually Hasgrove starts to benefit from being a new shareholder. At the end of the earn-out, we have got to be sure we have a business that still makes sense in having. That’s why we always look at the management team that’s there and make sure they’re incentivised in all the appropriate ways – yes financially, but also is this the right business for them to be in?”

Grimshaw adds: “You’ve always got to look at profit; that’s where sanity is at the end of the day and we will continue to do that as we look to grow. But what I’m not going to do is strip the sole out of the business, just for profit. The management team aren’t looking at it like ‘we’ll get the earn-out and we’ll bugger off’. We have to look long-term. Yes people are incentivised by money, but people in this industry are also incentivised by doing good work and I wouldn’t want to sacrifice that. The two can go hand-in-hand.”

Hyde says Hasgrove’s next acquisition dealings are likely to focus on corporate communications – another of the group’s major strengths – with London or continental Europe being more likely location than the north of England.

However, plans for Manchester are significant. Hyde confirmed the group’s intention to move the majority of its north west operation – including The Chase and Connectpoint – under one roof, outside the city centre. “While we will retain an office in the centre of Manchester,” he says, “we will be moving the majority of the company to an office on the outskirts of the city.

“What we’re not going to do, however, is destroy what makes each company special. The companies are all special in different ways, but at the same time they can benefit from being in the same place.

“One of the ways of generating extra revenue is by working together. In this building (Connectpoint’s Quay Street offices), we have advertising, PR and digital offerings. This year, the PR and digital people have launched online public relations. That’s come about because they’re in the same building, talked about it, and realised there was an opportunity, so they built a new product and are now selling it. That happens when you get to know each other. Being in the same building is very important.”

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