In this insightful discussion, Yann Neuhaus, Key figure at Sequotech Group, unveils the strategic layers behind their M&A approach and response to evolving market trends.
The article navigates through Sequotech's unique blend of shared knowledge, continuous learning, and technological innovation, highlighting how these elements interplay to shape the group's success. He provides an in-depth look at the company's strategic decisions, emphasizing the importance of proactive networking and learning in the dynamic world of IT. This piece offers a rare glimpse into the principles and practices that drive a major player in the industry, making it a must-read for those interested in the intricacies of business development and market adaptation.
Introduction
Could you briefly introduce yourself to our readers who might not yet know you, and talk about your role?
Of course. I am one of the four founders of dbi services, and my career has always been rooted in the IT sector. I modestly managed to convince the others to embark on this adventure, although it was not very difficult given our common mindset (laughs). I started as an IT engineer, not as a manager or director, which was also true for the initial nine people at dbi services. We were all consultants.
Between 1999 and 2010, my career was marked by managing IT projects at Trivadis. This was not just a technical role but also an opportunity to delve into project sourcing, naturally developing management and organizational skills.
My epiphany occurred during a training session at EM Strasbourg in 2009, where I met Pierre-Yves Bréhier, who is still the Head of Sales at dbi services today. This meeting was a real catalyst. That period was crucial for understanding the viability of a project like dbi services, building on improvement ideas that had germinated during my time at Trivadis.
Thus, everything followed naturally. I took on the role of CEO, guided by the opportunities that presented themselves and by growing confidence in our ability to lead a large-scale entrepreneurial project together.
Strategies M&A
How would you describe the current M&A strategy of the Sequotech group?
Our M&A strategy mainly focuses on targeting companies that are efficient and high-performing but haven't yet reached the "critical size" needed for a more significant impact in the sector. Integrating these companies into our group aims to enrich our service portfolio and strengthen Sequotech's overall position. This integration fosters synergy where both parties, the group and member companies, mutually strengthen each other, forming a virtuous circle of growth.
To detail our approach, we focus on two major axes:
- The first is "Cross and Upselling". "Cross-selling" involves developing complementary products and/or services for our current clients, while "Upselling" aims to offer them superior or more advanced versions of our expertise areas. A concrete example is our 2024 project in Romandie, resulting from a collaboration between dbi services and UDITIS. This strategy allows us to optimize the value of our existing client relationships by offering a broader and more sophisticated range of services.
- The second axis is "Resource expansion". We place great importance on internal training, an initiative that has already proven effective. For example, we have trained engineers from Exxo and UDITIS, and this process continues. We have organized specialized training for SQL Server experts, through dbi services. This demonstrates our commitment to investing in skill development and expertise of our teams.
These strategic axes illustrate our desire to extend our influence while strengthening internal skills, key elements to ensure sustained growth and long-term succes.
What are the main criteria you consider when evaluating a potential acquisition?
When considering a new partner for acquisition, we focus on several key aspects, while seeking to establish a relationship based on mutual respect and shared benefits:
- Economic stability and management commitment: It's essential that the potential partner demonstrates economic solidity. Sound financial management is a sign of stability and long-term viability. Similarly, the management's commitment and vision are crucial, as they directly influence team motivation and well-being.
- Excellence and growth aspirations: We look for companies that excel in their field and geographical area and are driven by a desire for growth and evolution. This means they are ready to embrace new opportunities and develop within our group.
- Synergy of technologies and services: It's important that the partner's technologies and services complement ours, to enrich our offer without encroaching on existing activities. This allows for smooth integration and added value for all entities.
Finally, it's important to note that the duration of legal proceedings in mergers and acquisitions (M&A) is approximately the same, whether partnering with a small or large company. In other words, the time invested in these procedures remains significant regardless of the size of the envisioned partner company.
How does the M&A strategy fit into the overall vision of the group?
Our M&A strategy is a central element of the overall vision and is based on two fundamental pillars:
- Strategic targeting: We aim to acquire integrators that offer technologies complementary to or already present in the group's member companies, particularly in the fields of infrastructure and data platforms. This allows us to diversify and enrich our IT service portfolio, staying aligned with our vision of expansion and strengthening our offer.
- Opportunities and alignment of values: On the ground, I firmly believe that the opportunities that arise are crucial. We seek to collaborate with companies whose mindset and values align with ours. The goal is to work together harmoniously and productively, seizing the opportunities that arise.
The purpose of our approach is to consolidate and strengthen Sequotech's service portfolio. Regarding the geographical areas we target, our attention is mainly on companies in the DACH region (Germany, Austria, Switzerland). This geographical focus is strategic and aims to strengthen our presence and expertise in key markets.
Business Projects
What are currently the main business projects that occupy us?
Currently, our commitment translates into several key initiatives. We play an active role in the digital transformation of our clients, focusing on Cloud solutions and application modernization, particularly through Containers and the DevOps approach. The YaK, a product developed by dbi services, is specifically designed to support our clients in this transformation. It has been a key element in supporting a major local institutional client.
Meanwhile, we organize the Data Community Conference, in collaboration with our Marketing Manager, Florence Porret, and her team. This conference aspires to become a reference event in Switzerland for IT professionals. We are currently working to integrate functionalities and technologies from UDITIS and Exxo into the YaK. This approach aims to enrich it by expanding the range of services. Parallelly, a significant application modernization project for our clients in Romandie is underway. This project is particularly ambitious and requires close collaboration between UDITIS and dbi services, combining our expertise to offer optimal and tailored solutions.
Moreover, we are actively deploying a Cross/Upselling strategy in Zurich. In this region, the sales teams of dbi services play a key role in highlighting Exxo's offerings. This approach aims to maximize commercial synergies between the different group entities.
Internally, we place great importance on harmonizing our training programs. We ensure that these trainings are accessible to all our employees, regardless of their company, thus promoting uniform knowledge sharing and a learning culture throughout the group.
A concrete example of our collaborative spirit is the invitation of Exxo colleagues by the dbi services Zurich branch to celebrate the end-of-year holidays together. Although simple, this initiative holds great value in strengthening the bonds and cohesion among our teams. We are also pleased with the speed and collaboration within the group. Stefan Dettwiler, CEO of Exxo, plays a crucial role in this dynamic. His contribution is significant to the group's development, particularly in the Zurich area, which reflects our team spirit.
What are the main challenges the group faces in implementing these projects?
The first challenge is finding the right resources for our projects. This involves not only acquiring competent talents but also aligning them effectively with the specific needs of each project. This entails a rigorous process of selection and training to ensure we have the best skills available for each initiative.
Secondly, we would like to see an increase in the number of cross-projects within the group. This means encouraging greater collaboration and skill sharing among the different entities. I firmly believe this can stimulate innovation and creativity, while offering more comprehensive solutions to our clients.
Lastly, a major challenge for Sequotech is to effectively respond to significant tenders for large-scale clients. These calls involve complex projects with specific requirements and a high level of expertise. Our goal is to meet these challenges by presenting competitive proposals and aligning our resources to optimally meet the needs of these clients, while maintaining our commitment to impeccable quality and customer satisfaction.
Vision and Perspectives
How do you see the group in the next five years, particularly in terms of its growth and expansion?
Firstly, we have chosen to form a strategic partnership with Verium, an investor that is a "family office". This choice is important as it offers Sequotech greater flexibility compared to traditional investment models. Usually, when a company collaborates with Private Equity funds, it can find itself under pressure to generate quick financial returns, typically within three to five years. This can sometimes lead to a focus on short-term gains instead of long-term growth. Our partnership with Verium is different. It does not impose a strict timeline to realize a return on investment or to prepare for an "exit" (like a company sale or IPO). This flexibility allows us to focus on longer-term strategic development, investing in our offerings, expansion, and infrastructure without the constraint of imposed deadlines.
Next, over a three-to-four-year horizon, we envision the Sequotech group covering a wide range of IT needs for our clients and achieving a turnover close to 100 million CHF. The goal is to ensure that the group remains profitable while expanding. This means we must balance our expansion with the need to maintain good financial health, ensuring our growth is sustainable and beneficial.
In summary, our vision for the coming years combines a smart strategic partnership with meticulous planning to ensure sustainable and profitable growth. We aim to expand our service portfolio while staying true to our principles of strategic development and profitability of each group entity.
What's your perspective on market trends and how do you think the group should evolve to address them?
One of our major strengths is the culture of sharing that permeates the three member companies of the group. This desire to share knowledge and experience is particularly evident through initiatives such as the Data Community Conference, which allows us to stay in touch with our community and generate enriching discussions around the issues of our sector.
The employees of our member companies are highly invested in continuous learning. They are engaged in organizing internal events, workshops, and actively participate in constructive exchanges focused on creating added value for our clients.
Investing in R&D and advanced technologies is essential to our strategy to maintain leadership in our areas of expertise. This is illustrated by the development of innovative products such as dbi services' Le YaK and UDITIS' ATA platform. The latter represents a disruptive innovation in the digitalization of customs processes, transforming the traditional ATA Carnet into an efficient and secure mobile application, simplifying temporary export and import procedures. This example demonstrates our commitment to innovation and our ability to develop impactful technological solutions.
Final Thoughts and Advice
Are there any lessons or past experiences that have particularly shaped your approach to M&A strategy?
My professional journey has been marked by several experiences and lessons that have shaped my approach to M&A and Business Development. A key component is the importance of networking. Engagement in various professional communities, participation in training and events, and active interaction in the field have proven crucial to enrich our knowledge and expand our network. Indeed, it was through such interactions that the idea of dbi services was formed.
Continual learning is also at the heart of our philosophy. Currently, I am pursuing a business administration training program, which provides valuable insights into the link between management and the board of directors. This training helps me understand the right positioning as a group administrator, with the hindsight of my experience as a director.
Moreover, experience has shown that opportunities often arise through proactive steps. Initiative and commitment are drivers of success: remaining passive generally leads to no tangible results, it's essential to get out of the office and network! This belief guides our business approach, encouraging active search for opportunities and preparedness to seize opportune moments.
These principles are at the heart of how we conduct mergers and acquisitions and shape our business strategy, with a focus on sharing, learning, and proactivity.