Backed by Private Equity, Flexprint LLC expands its national footprint.
(Pictured above: Flexprint founder and CEO Frank Gaspari.)
If it weren’t for private equity investment from Oval Partners in 2015, Flexprint LLC might still be a $50+ million dealer growing organically by double digits per year, but fueled with that capital, the company has grown into a $210-million dealership following an array of acquisitions during the last two years, including two notable ones in December—Caltronics and Flo-Tech.
For Flexprint’s founder and CEO Frank Gaspari, a guy who had been funding his own businesses for some 25 years—he sold several companies he founded early in his career to Tom Johnson of Global Imaging in the 1990s, then got back in the game and started Flexprint LLC in 2005—what ultimately prompted him to seek private equity funding?
“I’ve got a huge, huge passion for this space, and growing businesses,” Gaspari explained. “We took the business organically from $0 to $50 million nationally in 10 years. I was 50 years old and I said if there’s an opportunity to do things on a larger scale, not just a rollup, but to bring great companies together, entrepreneurs, sort of like Global on steroids to a certain degree, I needed to bring in a partner.”
You can call Flexprint an office technology company if you’d like, but it’s more accurate to call them a print management company that markets office technology too. They are also one of the first independent dealerships in the country to figure out how to successfully sell MPS.
Since uniting with Oval Partners, Flexprint has added seven partners with more to come—both office technology dealerships and managed print providers. Gaspari isn’t surprised at the pace of acquisitions and Flexprint’s growth spurt since partnering with Oval.
“Humbly, I’m impressed by what we’ve accomplished in two years,” he said.
Gaspari prefers not to use the word “acquisitions” when discussing the Oval/Flexprint business model.
“We’re bringing in business owners that want to take chips off the table but want to reinvest in this platform and be real equity owners in the parent company and continue to run their businesses.”
The company’s goal for 2017 was to grow from $100 million in 2016 to a $175 million dealership. They exceeded that goal by $35 million.
When Gaspari talks, other dealers should listen. He’s engaging, direct, irreverent, and like the late sportscaster Howard Cosell, tells it like it is.
“When you’re real focused, which we are and have a lot of resources, which we do, and you’ve got talented people, which we have, and when you work hard, stuff happens,” said Gaspari.
These days Gaspari spends a fair amount of time traveling around the country meeting with potential partners.
“A lot of these men and women started their businesses from nothing and I started mine from nothing and I know what they went through. When I tell them something, they know that I lived it. And I love meeting the ones who are still excited about it because inviting those people to the team makes us better.”
The Oval Partners/Flexprint model offers a twist compared to other acquisitions models. Dealers who become partners can reinvest up to 30% of the money they receive for their dealership pre-tax, becoming stockholders of a much larger company.
“A $210-million company trades at a lot higher multiple than a $20-million company,” explained Gaspari.
When a dealership joins forces with Flexprint LLC it becomes a partner, the management and name remains, and the product line is unchanged. The only thing that changes is that financial reporting and HR is centralized.
“The driving force behind a lot of dealerships is the entrepreneur and their passion for people,” observed Gaspari. “When you take them out, it’s difficult to replicate.”
The dealerships that Flexprint targets tend to be profitable, healthy growing businesses. Oval and Flexprint also consider the owner’s leadership capabilities along with his and the dealership’s reputation. Location is less important.
“There’s no such thing as an off market for us,” noted Gaspari. “If it’s a good strong company, and they’re in Buford, Wyoming, with a good reputation and the owner wants to stay on, let’s go. Our eyes and ears are wide open for business owners that are passionate about the business and want to reinvest and want to reinvent themselves—I’m reinventing myself.”
Flexprint’s executive team meets quarterly with partners to review performance.
“We set realistic expectations to grow the business but expect organic growth—double digit every year,” explained Gaspari. “I’ve been in this space my whole life. I don’t care what the industry experts say, it’s flat, it’s declining, it’s whatever, if we have 10% market share that means there’s 90% we can go after. We have high expectations, but they’re realistic.”
The Oval/Flexprint model also facilitates the sharing of best practices. However, despite its many positives, the model isn’t for everybody.
“Business owners who want to sell to the highest bidder are not for us,” said Gaspari. “For those owners that want to stay and care about their legacy, and want a platform to grow the business organically, we’re a good option.”
As the company acquires, it continues to build out a service platform that’s dealer run from coast to coast.
“That’s 24/7, 365 [days] from California to New York,” said Gaspari. “We’ve demonstrated we could provide that service between our techs and 1099 techs, now we’re filling it in with techs from Flo-Tech and Caltronics and so on.”
This year Flexprint is investing in a solutions division, but it’s also looking for strong managed print partners, companies like current partners Flo-Tech, Cannon IV, and Laser Options.
“We’re looking for people who get managed print and strong traditional technology companies that are best in class,” said Gaspari. “The other thing we’re finding is that some of the traditional copier companies we’re bringing on didn’t have a managed print initiative, now with the Flexprint and Flo-Tech business models we’re bringing those solutions to the customers of a traditional copier company. It’s a real way for us to grow that business organically with the resources that we have.”
Managed print accounts for about 64% of the company’s overall business. At this point there’s no interest in acquiring a Managed IT company, but Gaspari doesn’t rule that out as a future option.
As acquisitions activity abounds in the channel one wonders if there’s a ceiling for good companies to partner with.
“I underestimated the high number of really good independent companies in this space,” acknowledged Gaspari. “The company I’m visiting this week, I didn’t even know they existed and they’re a sizable company with a leader with a great reputation. There’s a ceiling on everything. The plane just left the ground, we’re at 5,000 feet, we haven’t gotten to cruising altitude yet. There are so many companies out there that are candidates for our program.”
With all that optimism, Gaspari expects to be a $300 million company by the end of this year and to double its current size in the next 24 months.
At the rate things are going, he’ll likely do that.
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