A very private passion: Print 21 magazine article

Opus Print Group is often seen as the ‘other’ private equity-backed print group, smaller than the big two players and with a strategy that concentrates on niche print markets. It’s not just the size or product mix, however, that distinguishes Opus from the other groups. Simon Enticknap caught up with the group’s CEO, Cliff Brigstocke, to find out more about what sets Opus apart.

This isn’t the way private equity is supposed to be. Private equity, we’re told, is all about faceless financiers ensconced in tall glass towers busy buying up small underperforming companies, merging them together at the expense of loyal staff and then flogging them off as a new entity for a vast profit with barely a backwards glance or a remorseful sigh. Accurate or not, it’s a pervasive view of how private equity operates and, as such, it’s what a lot of people have come to expect will happen in the printing industry.

And yet within minutes of sitting down to be interviewed, Cliff Brigstocke, Group CEO of Opus Print Group, is talking about things like “trust” and “passion”. He outlines the “long term” strategy of the group, one which involves building a “sustainable” future for the business. The group, he says, is not interested in buying “broken businesses” but rather seeks out partners who will add “genuine value”. The management, he says, is committed to growing the business, not just though acquisition, and is closely involved in the day-to-day running of the business at all levels including the shopfloor.

This doesn’t sound like private equity at all. But then again the Opus Print Group is not like other private equity schemes and Brigstocke is not your typical CEO.

For a start, as Brigstocke himself points out, the investors behind Opus – Knox Investment Partners – have invested their own money in the company and have a personal commitment to making it work. They’re not just playing with other people’s funds. Likewise, most of the former owners of the companies taken over by Opus have stayed with the group and re-invested in the business. The identities of these companies have been retained, by and large, and continue to operate as independent entities.

Brigstocke himself, who took over the reins as Group CEO just over a year ago, doesn’t come from a printing background, having previously worked for a large logistics and out-sourcing company. Prior to that, he worked at the publishing group, Thomsons, where he was involved in buying print and came to know what it was like to be a print customer.

In interview, he comes across as quietly spoken, thoughtful and completely unflappable. He’s open and forthcoming about the group’s plans, showing none of signs of defensiveness that are often the hallmark of executives who know that the industry is watching them. He displays a certain coolness in command which perhaps dates back to the time when, as a 15-year-old cadet, he embarked on a career in the Navy and, by his own admission, took on a leadership role from a young age.

At Opus, he leads a very lean management team indeed with just four senior managers. They operate out of the Cactus Imaging premises in Silverwater, Sydney – not exactly the flashiest HQ imaginable for a group with revenues that are now approaching the $100 million mark. It’s a factory, let’s be honest, but this lack of pretentiousness is appropriate for an operation that is entirely focused on the business of printing. Brigstocke is adamant that the Opus part of the business must be seen to be adding value to the company rather than acting as just another level of management.

“If we’re not adding value to the individual business then we really don’t deserve to be a part of it,” he comments. “If I can’t help out in strategy, on business development, on sales development or IT support then really why do we have a group at all?”

At the same time, he’s not afraid to get his hands dirty and says that one of the pleasures of the job is to take a day off and go and work on the binding line. He makes a point of getting to know his staff on first name terms and seems genuinely committed to fostering an inclusive work environment.

Clearly, there’s something very different going on here compared to what we’ve come to expect from the usually closed world of private equity.

The personal touch
The key to understanding the nature of Opus lies with Ligare, the Sydney-based book printing company which was the group’s first acquisition back in May 2007.

Celebrating its 30th year in 2009, Ligare is a well-established short-run book producer that has been managed by Richard Celarc since the late ‘70s. Celarc knew the investors behind Knox Investments personally and, more importantly, they knew he was someone they could trust; in Brigstocke’s words, “he was the sort of person I liked dealing with”. Brigstocke himself has known Celarc for more than 20 years from his time at Thomsons when he used to buy print from Ligare.

Right from the outset then, the focus of the group has been on personal connections and working with people who can be relied on. It was personal contacts, too, which led to the next acquisition and the company’s move into outdoor media through Omnigraphics in New Zealand and then Cactus Imaging, first in New Zealand and then Australia. At a stroke, the company became the dominant force in outdoor media or what it calls the ‘out of home’ market. Personal contacts of a different sort – this time via the introduction of a trusted supplier – resulted in the most recent acquisition in February this year with the addition of noted Canberra-based printers, CanPrint and Union Offset. This gave the group an entry into the specialised government printing sector where the focus is on quick turnaround, secure print and large-scale distribution.

Given the personal nature of the way in which the business has expanded, it raises the question as to what extent Opus and its investors can be seen as ‘accidental’ printers. Would the group have invested in the printing industry if it hadn’t been for those personal contacts? Brigstocke says that it would and that the decision to enter the industry was a deliberate choice.

“We chose printing for a number of reasons but in the main we saw a lot of value underneath compared to where, say, other acquirers were targeting. And for us, it was about seeking out that value in what is a very big market. We believe there is still a lot of opportunity in the market.

“Print is strong, it’s a medium that’s not going to go away. We’ve done a lot of research in terms of what the outlook for print will be and we’re very positive about the printed word.”

While the group as a whole encompasses three very disparate markets for book printing, outdoor media and government printing, the common denominator between them is a focus on quick turnaround work. All three require an ability to respond rapidly to customer demands as run lengths become shorter and lead times are compressed.

“When I was in trade publishing, the average run length was about 20,000 copies. Today it’s about 5,000 and falling,” says Brigstocke. “That’s a pretty big change. Correspondingly, there are many more titles. For instance, one trade title we work with, whereas normally they would do about 180 to 200 titles, this year they will do about 300.”

A quick turnaround, short run capability, whether it’s in books, posters or government work, gives Opus a competitive edge over bigger players and, in particular, overseas printers. Increasingly too, it means focusing on digital production and while the group does operate a number of offset presses, including a 10 colour Heidelberg in Canberra, Brigstocke says the company is not interested in chasing the commercial offset market except where existing clients ask for it.

Good with people
Another significant aspect of the way in which the group has grown is the fact that each constituent company has continued to operate as its own entity and with a focus on maintaining the existing management expertise. Apart from Richard Celarc at Ligare, David Daniel, co-founder and managing director of CanPrint, has stayed on as a shareholder and executive director, while Nigel Spicer, son of Warwick Spicer, Cactus Imaging’s co-founder, has taken on the role of general manager running Cactus.

But while the separate companies continue to maintain their own identity, the group has also identified synergies where appropriate to strengthen its operations. Southwood Press, for instance, another short-run book producer, was quickly integrated into the Ligare operation and a new digital production facility opened up. Brigstocke is proud of the fact that such integration has been managed without some of the heartache witnessed with other mergers, resulting in much of the in-house talent being retained by the company.

“To this day, we’ve still got most of their really good people and that’s added a lot of strength to the Ligare business,” he comments.

He points out that Ligare currently has a staff turnover rate of less than three per cent, an indication that staff are keen to stay with the business and want to work there. Indeed, those are the very people that Opus wants, he says.

After a period of acquisition, Brigstocke says the next phase of the business is to “bed down” the group’s operations and customer relationships. Staff from across the group’s companies have started working together, sometimes just informally, to share processes and develop a common culture. There are already certain shared technology platforms with the likes of HP and Océ and, while not committing to the ‘single supplier’ model, Brigstocke says where a supplier partnership is working, there will be opportunities to extend the relationship.

“An example there is PaperLinx. It’s well-known that we do a lot of business with those guys and they’ve been a very good partner to Ligare, and we’re now currently in discussion about taking them across the group.”

On the customer side, the benefits of a single print provider are starting to be realised too. For instance, Opus has been chosen as the preferred printer for all of Westfield’s national campaign work. The group already had a strong relationship with Westfield as a result of Cactus Imaging supplying all the banners and signage for the shopping centre group. This has now been expanded to include commercial printing through Ligare and CanPrint as well as warehousing and distribution in Sydney and Canberra. As a result, Westfield has been able to reduce its number of suppliers from over 30 printers to just one – proof that the much-vaunted one-stop shop model promoted by the bigger groups can indeed work. Brigstocke says that this size of account in the range of $3-$10 million hits the group’s sales “sweet spot”.

The size of it
The focus on niche markets has perhaps tended to overshadow the inherent strength of the Opus Print Group as a whole, but the statistics speak for themselves. Opus now employs more than 350 staff and uses more than 90 printers and items of print-related machinery across 22,000 square metres of factory space. Annually, it produces over 1 billion prints which includes six million books and 200,000 billboards and posters.

At the same time, Brigstocke believes that Opus is well-placed to grow bigger and achieve the $100 million revenue mark, a symbolic figure no doubt but a powerful statement nonetheless. He says that Opus is talking to “a number of other people” about acquisitions but says that size is not the primary focus and that the group is “in no rush to be the biggest”.

“For us, size is not about being the biggest but about getting better,” he comments. “We do genuinely want to build true value. This isn’t about a market roll-up. We’ve got a very clear strategy about who we want to join forces with and how we do that to add value.”

All of which suggests that the group’s backers are not looking for a quick exit either via a public float or sale. While the investors clearly expect a realistic return for their money, says Brigstocke, there is no talk of exiting at the moment and the focus is on the long term, by which he means a minimum of three to five years in the business.

Moreover, while the current economic downturn may be an influencing factor on the timeframe, Brigstocke claims that the tough market has actually helped Opus to focus on what it needs to do.

“In some ways it’s helped us because it’s made us really think in terms of the strategy and, again, who we partner with,” he comments. “There have been opportunities for us that we’ve walked away from because it would have been too much of an effort to take that business to where we needed it to be. It has given us clarity of thought and some tough disciplines around the decisions we’ve made.

“To build the sort of business we have during the tough times means we’ll come out of it, hopefully, well ahead of our competition. And that means that a lot of the fundamentals that we’ve put in place are now scalable and, with the investments we’ve made, again, we’ve not rushed to make decisions.”

Equally, he says, the downturn has forced a lot of customers to start thinking about their print purchasing and to look more closely at consolidation with a single supplier.

Pride and the passion
A couple of weeks prior to being interviewed, Brigstocke spoke at the Galley Club awards at which Ligare was a major sponsor. His speech covered some of the history of book printing, displaying his talents for research but also highlighting an interest in the industry and in print itself. He commented too on what he called “the passion in the room”, by which he meant the commitment and dedication to book publication shown by the participants that goes beyond the business of simply making money out of print. Of course, at the Galley Club he was talking to the converted, the true believers in print, but the impression he gave was of being a fellow-traveller, somebody who is finding out about the industry and who understands its importance.

Passion is a recurring theme with Brigstocke. At the previous Printing Industries CEO forum held in Sydney, he cited “passion for print” as a key driver in the success of the companies in the Opus Print Group. Equally, he said, a lack of passion immediately rules out any company as a potential takeover target for Opus. Talk of passion in print is nothing new in the industry but it seems to be of particular importance to Brigstocke and Opus. Why?

“Because we take a long term view. It is a long-term partnership that we’re looking for. I’ve heard all the words before, I’ve worked in a large corporate, but what we need to do is practise it here. All the businesses here have succeeded because they’ve had that passion that’s driven them to grow and be what they are.

“It’s also about honouring what we do. We’re printers. We’re not pretending to be anything else but a print partner.”

Pride in what the company does is evident when Brigstocke talks about the work that CanPrint does each year in printing the Federal Budget. Although no longer the huge job it once was, the Budget is still a highly potent symbol of the group’s capabilities and one which Brigstocke obviously finds very satisfying.

“It is an amazing exercise given when we get the final files and the security that’s engaged with it. We’re one of only two printers who have the security clearance that we’ve got, and while I can’t talk too much about it, it certainly gives us a foothold in sensitive government departments. Being trusted with the Budget is a very big honour.”

The sense of pride in being a printer, something which many might have thought would disappear with the advent of new ownership groups, still burns brightly. All of which suggests that, for the time being at least, the ‘other’ private equity group is in good hands.