FM service provider Europa experienced a number of acquisitions over the last four years. Cathy Hayward finds out from deputy chairman Martin Jones how this family business has grown into a multi-million pound success
2 September 2010
There was a time when Martin Jones knew everyone at Europa, the facilities business his father founded in 1971. When he got involved with the organisation in the mid-80s, running it with his sister Pat, it was a family firm with around 28 employees and a turnover of £100k. “It was a relatively small business, but what it did have was a great emphasis on customer service. This is what dad instilled in us as a family and as a business,” says Jones.
With 2,500 staff spread across 250 sites it would be an impossible task for Jones to know every name and face now, but Europa still retains much of the family feel from the early days – many of the staff and clients have remained with the firm for years. Trafalgar Place in Brighton, a 230,000sq ft multi-tenanted property, has had four owners but been serviced by Europa for more than 20 years. And the firm has worked at Newcastle’s Quayside, a one million sq ft site of office, retail, leisure and hotel facilities, since 1995. “Those sites are the backbone of the business, the personality of the business and they’re very influential because they’re such a success story,” he says.
The emphasis on customer service remains Europa’s USP. “Maintaining that personality in a business, that signature you want to put out into the marketplace, is something we’ve really worked on and invested in,” says Jones, now deputy chairman. “The look and the feel of Europa is so important and that’s what differentiates us.”
It was this customer focus that attracted Billy Allan, who had led the MBO at Stiell Facilities in 1996 and took the company into Alfred McAlpine in 2002, to invest in Europa in 2006 through the MBI consortium.
The move heralded a new era for the firm, enabling it to completely restructure and bring in new talent, including the current CEO Greig Brown, who had previously worked at Steill and Alfred McAlpine with Bill Loch and Allan. “I was attracted to the business because of its ethos of customer service,” he says. “At the time there was lots of consolidation, which created a fantastic gap in the marketplace for a business that could create a strong story about customer service, a special culture with really good people. That’s what we did.”
Europa also set about transforming itself from a business with a strong reputation in soft services (it was originally a cleaning company) to manage more complex contracts and offer more services to clients. This was achieved partly through acquisition – in early 2008 it picked up United Utilities FM (UUFM) that operates in the utilities sector. This was followed in May 2009 by workspace solutions business Eastlake Work Group which pushed Europa’s annual turnover to nearly £100m and saw the creation of a new business called Europa Workplace Solutions.
In January this year it acquired key contracts and assets of Operon after it went into administration enabling it to push its public sector business as Operon had clients in local government, higher education and the health sector. And in May Europa bought planned, preventative and emergency maintenance firm Nationwide Building Services Group. Increasing the technical services offering was a key milestone, says Brown. “Now we have a strong product set, where customers can select hard, soft, bundled, or management. It’s important to keep that flexibility we’re not trying to force a one size fits all model on the marketplace.”
The initial investment in the business structure meant that the firm could absorb the acquisitions with relative ease, though both Brown and Jones emphasise that staff and clients are the two most important parts of any acquisition – something Europa demonstrated when it honoured the previous month’s unpaid salaries of Operon staff.
Brown refuses to rule out further acquisitions although he won’t be drawn on specific targets. “We’d never discount acquisitions but I’m not a great believer in acquiring for the sake of acquiring. We’re in a market where you could increase the size of your business without winning new contracts but there’s no point in buying more critical mass for the sake of it. Now we have a pretty robust product set which could achieve more substantial organic growth over the next three to five years.”
Jones describes the current recession as being good for Europa in many ways, enabling them to grow (thanks to the misfortune of the likes of Operon). Brown concurs, and adds that recessions allow good suppliers to get closer to their customers. But he argues that clients asking service providers to cut costs, is not necessarily part of the recession, but part of the natural life cycle of an FM contract. “If you’ve got a five-year relationship with a client, one thing’s for sure that they’ll be change – in the client’s sector such as acquisition or downsizing. You’ve got to be on your toes.” A good FM provider has to be proactive and not wait for the procurement department to ask for a 20 per cent saving, he adds.
“You put yourself in a dangerous position if you’ll only sit on your hands and try to stick with the contract and keep it the same for five years because the reality is quite different. And that will continue, that’s just part of outsourced FM.”
Longer contracts help create the right environment for trust to grow and the service provider to be incentivised to innovate and invest, Brown says, pointing to the trend towards “three plus two” contracts.
“Three years is not a long time. By the time you inherit someone else’s staff, and existing model, work on it and make some transitions, before you know it you’re six months away from a retender situation. Five years seems like the most suitable from a client and a supplier perspective if you demand investment and innovation. Suppliers need a long enough window to invest for a return.”
FM QUICK FACTS
• The firm was founded in 1971 by deputy chairman Martin Jones’s father
• Europa has a £140 million turnover and employs 2,500 staff across 250 sites. The head office is in Welwyn Garden City, Hertfordshire.
• It focuses on four sectors: corporate, retail, public and utilities. Key clients include CBRE, Capital Shopping Centres, United Utilities, HBOS, Thurrock Council, Lloyds Banking Group, Welsh Assembly Government and Gateshead College
• 1971 founded by the Jones family
• 2006 the MBI consortium acquires a stake in Europa
• February 2008 acquires United Utilities FM
• February 2010 acquires key contracts and assets of Operon after it goes into administration
• May 2010 acquires repair and maintenance firm Nationwide Building Services Group