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‘If you do not let go of the old you never get into something new’

 

Since October 2015, Oscar Driessen at independent customs agent Customs Support has transferred his operational responsibilities as director to Maarten Bedaf. Maarten continues, together with Oscar and Mentha Capital, the strategy to substantially grow in the European customs market.

 

The port of Rotterdam is the cradle
Customs Support (CS) descends from Port Support and is an amalgamation of a number of neutral customs agents. Neutral means that CS handles customs formalities, no transportation and logistics. The company takes care of all customs formalities within and outside the European Union and assures among other things all documents are entered in the right way, the correct freight costs are calculated and the VAT is transferred correctly. Around 2005 Oscar joined Port Support. At that time Port Support provided administrative port activities with a huge back office. Before the arrival of Oscar the company had bought some customs agents and forwarders at a high price and had split and sold the logistical parts. The company therefore experienced serious financial difficulties.
Oscar tells about the turnaround and the traveled path to success.

 

 

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No growth in turnover
From the beginning I decided to focus on the only future proof part: customs. Although this division serviced a large number of customers with a substantial turnover, no money was earned. The company needed a new name to shake off the past: Customs Support. We became profitable very quickly by streamlining the processes and improving the quality. In the end it took eight years to repay the debt. Revenue growth, however, proved very difficult. We tried everything: presentations at trade fairs, sponsorship of events, membership of trade associations, cold calling by specially hired staff and hiring a very expensive salesman. We even broadcasted a radio spot. The pitch of the spot was: ‘You do not have to worry about customs issues anymore, you can completely focus on your core business’. For two months CS was on the radio during rush hours. The phone did not ring though.

The radio spot nevertheless payed off
The world trade grows twice as fast as the Dutch gross domestic product. The volume in Rotterdam grows a few percent per year, however CS wants to grow 20 percent per year. We perceived a growing trend towards automation. 10 years ago CS had no interfaces with customers, currently several clients are connected to our system. Colleague customs agents with a few employees will not be able to fully automate. We focus on growth through acquisition of these agents. The larger volume will give the leeway to invest heavily in further automation. We were looking for a financially strong party to finance this acquisition strategy. The cool thing was, although we had zero customer reactions to the radio spot, three parties showing interest to take over CS called us.

A good feeling is paramount
Two and a half years ago I called Gijs Botman, who I knew privately and businesswise, to guide the negotiation process with the three parties. He had started Mentha Capital and showed interest to shape the acquisition strategy together with me. Gijs insisted that if you sell, not only the price is important, a good feeling is even more meaningful. He knew that in that perspective he was miles ahead on the others. On top of that the bidding of Mentha was also good so I decided to start with them.

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A demonstration of confidence
Mentha contributes extensive buy & build experience and brings a lot of knowledge to the table, a well-oiled machine. They know exactly what to pay attention to in a takeover and act very accurately. My perspective is more on the entrepreneurial side: this acquisition fits and is a great deal, we should simply do it. Mentha considers the pricing, financing structure and all legal matters. We complement each other perfectly. Also Mentha reopened the doors of the banks. Before the deal with Mentha we were still under special management with the banks because of our customs guarantees, despite a positive equity. After the sale to Mentha we could leave special management and on top of that we obtained significant funding. It is clearly a vote of confidence for the bank when a private equity party teams up with a company.

It took some acclimatization
Suddenly, after all these years, an external shareholder is on board again. On both sides we had to accustom. For example, only at the end of the year during the shareholders meeting I discovered that investments exceeding a certain amount need prior consent of the steering committee. Meanwhile, I had invested one hundred and fifty thousand euro, among other things in the implementation of a new system. Mentha did not make a big fuss about it, because they acknowledged the value of the investment and trusted the company to be in good hands. I am regularly in touch with Gijs, Jeroen and Mathieu of Mentha. Our contact is very good and comfortable, we understand each other.

Rollout acquisition strategy in 3 to 5 years

In 2015, the forces are already bundled with Pompa and Freshport. Pompa is a strong service-oriented all-round customs agent with specific expertise in the market for fruit and vegetables. Freshport is located in the frontline area, directly on the runway at Schiphol. They conduct inspections of perishable goods for human consumption. Together, the company has eight offices in several European countries. Only a few of the 150 independent customs agents active in the Netherlands play in the top of the market. Private equity facilitates the fast roll out of a growth strategy in three to five years by providing funding to make acquisitions.

The only sure thing in life is that change will be
Oscar is highly aware of the fact that during a buying process it is of great importance to investigate all the motives of the vendor. The vendor is often the owner of the company participating in the workplace on a day to day basis. He is deeply concerned about what will happen to the people, processes and company name. Treating the people with care is crucial to the success of the acquisition. You need to give people the necessary attention to assure them that they belong to the club and will not lose their own identity. This is what you have to keep in mind because it is the people with the knowledge who make our company. Some have been working for 30 years at CS, its predecessors and the acquired parties and have seen it all before.

Maarten speaks the language of logistics
At the time it was agreed with Mentha that in two years’ time a new director would join to take over the operational responsibilities of Oscar. We are glad that Maarten came on board in September 2015. He speaks the language of logistics like no other and has a wealth of supply chain expertise through his experience with four of the top logistics service providers: DSV, CEVA, DHL and Kuehne-Nagel.
Maarten takes the floor.
In logistics, I have always had operational and business development roles. We developed products and supply chain solutions for the consumer retail and high-tech sector. The disadvantage I experienced working with such big companies is: if you want to change something it often does not happen because someone does not like it or simply doesn’t attach time or priority to it.

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Sparring partner
To start at CS means entrepreneurship to me. My first job interview was very nice. It was very clear that Oscar and Mathieu are determined to move the organization to 2.0 or 3.0. During the second interview, I asked Gijs what I can expect from Mentha. He indicated that Mentha adds value to the buy & build strategy and acts as a sparring partner when I’m bothered with something. That means a lot to me. To lead an organization on a daily basis is fine, but you are faced with many new things. One should experience these once for the first time and Mentha’s expertise is very welcome to avoid mistakes. I believe sparring with other people is direction-oriented and prevents institutional blindness. This is good for CS as well as for me.

First impression
My first impression is that the processes at CS are up to par. Certainly in this business, taking high risks sometimes, it is very important to closely monitor the customers. A robust IT platform evolving to 2.0 or maybe even right away to 3.0 secures our leading position in the IT field. The interfaces with customers contribute on both sides to quality improvement and savings.

Ambition
Our ambition is to make a leap in organic growth and some nice acquisitions, resulting in market leadership in the Netherlands and a stronger position in the German and Belgian markets in 2016. We expect an increasing demand with logistical parties to outsource the very specialized activities of their customs department. Additionally, regulatory changes are not always carried out properly, incurring big risks. Logistics companies cannot afford to be exposed to the risk of tax claims. With my background I know the position of customs at logistics service providers, what their motives are to outsource or not, what they fear, what they want and what they are utterly opposed to.

Fixed price
Oscar’s entrepreneurial motto for Maarten is: follow your own path. Do the things you really feel good about and do not get too much influenced by advisers. A consultant is around for a while. Based on apparent quantitative information he recommends which way to turn. You are present every day and know that there are a lot of reasons that might not be on the surface but highly influence the choices to make. Stay at the wheel yourself, steering the ship in the right direction.

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