The strategy of growing through acquisitions has served De Groot Installation Group well in recent years. They are now one of the top five family businesses in installation technology. 'We always choose businesses with the same DNA.'
With the second generation at the helm, the growth of De Groot Installation Group from Hengelo has been rapid. It started in the period from 2012, when Marcel de Groot became general manager of the family business that supplies and maintains high-quality technical installations for running water, light, gas and fire safety. The financial crisis was in full swing and the technical installation sector was consolidating.
If De Groot Installatiegroep wanted to remain a serious player in the market, it had to professionalize, including in the areas of ICT, knowledge, safety and regulations, as well as create a certain volume of projects. As a small business, this is quite difficult, De Groot recognized. 'By scaling up in projects, the knowledge within our business went up, we were able to professionalize more, and as a result we became a better employer across the board.'
Geographic expansion
Together with his three sisters, who are also fellow shareholders, he charted the course for growth through acquisitions by means of a buy-and-build strategy. This year, De Groot expects to generate 220 million euros in revenue with a total of 1,100 employees. This fulfills a great ambition; the business is one of the top five family businesses in installation technology and is represented in almost all regions.
With MIT Installatietechniek of Almere as the eighth and most recent addition to the portfolio, now also in the central Netherlands, a region where De Groot was not yet fully positioned. Before the acquisition, De Groot already had a lot of service-related work here, but too few people. So employees had to commute back and forth from Hengelo to Almere.
De Groot: 'People no longer want to spend two hours there and two hours back in the car in one day. If we have long-term work in a particular region, I look at how we can strengthen our position there. Of course, I also look at whether a business can complement our current services. We deliberately choose utility and industry, not residential construction.'
Strong family culture
Besides location and complementary services, the DNA of a business is perhaps the most important factor for De Groot when choosing a business acquisition. The family wants to be and remain a unique family business within the industry with an open culture in which employees receive a great deal of attention.
'That is our strength and that is what we choose other businesses for,' explains De Groot. 'The integration of an acquired business is usually done in a relatively quiet way. We leave everything as it is for the time being, even the business name of the acquired business remains intact. We do try to provide add-ons in finance, HRM, purchasing, operations and safety and environment. Of course in the beginning there is sometimes unrest, because people have to get used to it. But after a while they see the added value of being part of a large family business. In terms of stability, but also in terms of the facilities we can offer. Among other things, we invest a lot in training and developing people.'
Long-term vision
The size of the business offers another advantage. Thanks to its volume, De Groot Installatiegroep is better able to absorb projects that turn out to be unfavorable. As in the case of the orders De Groot received before war broke out in Ukraine.
'The details of a number of contracts only became known during the war. Prices then suddenly rose enormously. And I'm really talking about increases of 20 to 25 percent. Of course we couldn't take this to clients and it cost us a lot of money. Fortunately, our ambition is not to make as much money as possible in a short period of time. We are in it for the long term and really want to pass on a beautiful business to the next generation.
