PartnerService & Yding Gruppen: A Successful Merger
March 22, 2022
Merging two businesses is no simple task; examples abound of unsuccessful pairings. Luckily, this has not been the case for PartnerService and Yding Gruppen (“the Company”), as they have proven to be the perfect fit. These businesses were acquired by Lynx in 2017 and 2021 respectively and merged over the past year. The Company offers commercial cleaning solutions to small and large organizations throughout Denmark. This Winter, we had the pleasure of speaking with Lone Ranum, the Company’s CEO, about her transition from COO to CEO, the partnership with Lynx, the merger with Yding Gruppen, and overcoming challenges amidst COVID-19.
In 2003, PartnerService (“PS”) was founded by Jesper Schou-Koucher. His idea to start a commercial cleaning business came about when he was studying at the Copenhagen Business School. PS grew very rapidly in its first three years and in 2006, Jesper’s brother joined the business to focus on its finances. Over the years, PS continued to expand in size as well as services in order to keep up with growing demands and an evolving market. Due to the business’ rapid growth, Jesper and his brother knew that PS needed to be taken to the next level and they believed this could be accomplished by selling their company.
Lynx’s Entry into Denmark
In 2017, Lynx opened its European office and acquired its first Danish company, PartnerService. Lynx’s introduction to PS occurred rather informally: Brad Nathan (Lynx Founder and President) and Ashley Manis (VP of M&A Scandinavia) were traveling in Denmark and through a series of introductions from Minden Gross (Lynx’s Toronto counsel) to Loeven Advokatfirma (formerly BKH Law), they were connected to PS’s business broker, which developed into an opportunity to buy the business. Lynx was immediately attracted to PS due to its strong fundamentals and recurring revenue model. This introduction came just one month after traveling to Denmark and shortly thereafter, the offer to buy the business was accepted.
In early 2021, with six acquisitions now completed in Europe and the UK, Lynx purchased Yding Gruppen (“YG”), the second company to join Lynx’s Danish cleaning portfolio. The acquisition of YG presented obvious synergies with PS: Lynx saw immediately that merging the two businesses could help lower the overall cost structures and increase the bottom lines for both companies. Sometimes one plus one equals more than two!
Lone, meet PartnerService
As PS continued to grow, it hired Lone Ranum as COO in January 2020. With over 20 years of experience in operations, Lone’s goal was to modernize and digitize the Company. Prior to joining PS, Lone was working with one of the Company’s biggest competitors, so her industry knowledge was invaluable to PS.
In April 2021, Lone was promoted to CEO, which is when she first met Ashley, Marvin Pludwinski (Lynx’s CFO of Operations), and Andrea Natarelli (Lynx’s M&A Associate). “Ashley, Marvin, and Andrea were quick to target their communications to my profile and my personality because I’m a little bit direct in my communications,” shared Lone. “They are skilled partners who are aware and respectful of Denmark’s culture and are dedicated to the Company's continued success.”
Lone explained that she had met with other private equity firms in the past but none of their business practices resembled those of Lynx. “With Lynx, I was introduced to a completely different private equity firm,” described Lone. “Lynx is with its companies for many years and not with the mindset that it wants to sell its subsidiaries.” This highlights one of the key differentiating factors between Lynx and many other private equity firms: we are a buy-and-hold company so our ultimate goal is to hold our businesses indefinitely.
Although Lynx acquired PS prior to Lone’s entrance to the Company, she and her team are “very happy about the integration with Lynx”, she shared. “I think Lynx has well-founded knowledge of PS and an understanding of the YG's culture. Lynx supports us in our growth strategy and recognize the success of the individual. So, when one of my employees does something exceptionally well, Lynx send a recognition email and it’s so great – I love it. I feel that my team wants to make Lynx proud.”
A Synergistic Merger
The excitement associated with acquiring YG was clear in that it presented potential opportunities to add more cleaning businesses to Lynx’s portfolio, as well to improve the finances of both PS and YG. “The decision to merge came about when we needed to strengthen our position in Jutland,” commented Lone. “Also, we had a lot of synergy effects from merging the two companies: insurances, subscriptions, and stronger negotiation with suppliers because of our size.”
While the synergies were obvious to management, it was very important for the Company’s employees to be on board with the merger. “My [new] employees needed to take a step back and get to know me before they became as happy as they are now,” explained Lone. “I frequently visited the YG office to allow the employees to get to know me and for me to learn the company’s culture. [Also], the values of both companies harmonize perfectly and the employees have been looking forward to the merger to get new colleagues, improve digitization, and to be more nation-wide.”
Lone shared that both PS’s and YG’s employees have experienced more empowerment since the merger. “They’re so happy and they have a lot of new energy;,” she started, “since the merger, YG gained seven new customers and are expecting 10 or 15 more. The employees from PS and YG are helping one another and they like each other very much, it’s great!” The bond created between both companies have proven the effectiveness and advantage of this merger. It also indicated the strength of the Company as it faced global adversity.
Team Solidarity & Overcoming Obstacles Amidst COVID-19
The COVID-19 pandemic hit people and businesses around the world. For an organization that cannot operate remotely, the Company had to take a step back and re-evaluate its operations. "The pandemic had a huge impact on the Company,” explained Lone. “In April 2020, Danish companies panicked: they demanded cleaning supplies like never before. Our supplier ran out of gloves and disinfectant, so we had to be creative and find alternative ways to provide these products. As demands increased, prices did too; as well as the number of people affected by COVID-19. It was a very tough time with our team working many hours but because we sold a lot more services, we made a lot of money – which was great.”
Despite this silver lining, the world was hit with another wave of the pandemic which had a different effect on the Company. “During the first wave, we made money,” commented Lone. “During the second wave, we lost money due to illness. Many of our employees were infected with COVID-19. Right now, we have managers who have taken on cleaning shifts; we are working from early morning to late evening and on weekends. It’s tough right now but my team is stronger in spirit; we became more protective of one another.” The Company embodies a collective culture that ultimately strengthens its people and management, which allows for a hopeful future.
PartnerService & Yding Gruppen: Looking Ahead
Over the last two years, PS has worked diligently to make improvements related to modernization and digitization. Lone explained that the Company “created a new website; established a planning department; [developed] three new IT systems: salary, economic, and operational; possesses a very strong social media strategy; and created a union agreement for our employees. We’ve implemented new strategies and developed quickly; we’ve become a company that employees want to be a part of and I’m proud of that.”
As the Company continues to evolve, it will focus more on “customer retention, servicing medium and large businesses, and a workplace that attracts the right employees for us: passionate, diligent, and disciplined people,” commented Lone. “We will also focus on more digitization, innovation and of course, green transition so that we are supporting the priorities of our customers. With Lynx’s support, I look forward to the Company’s growth.”
At Lynx, we pride ourselves on being experts at adapting; it is critical to our team that we adapt to the circumstances and culture of a business, and this is true regardless of a company’s geographic location. Lone recounted a story wherein Ashley exemplified how easy it was to adapt to a PS employee’s comfort levels. “When Ashley was visiting Denmark last, she wanted to speak with one of my employees,” began Lone. “My employee's English skills are not that good, so she said to Ashley, ‘I’m not that good at speaking English’ and Ashley responded, ‘I can’t speak Danish at all, so you are much better at speaking English than I am Danish!’ This made the employee feel very relaxed and she spoke so warmly about Lynx. I think this is a typical example of Lynx’s behaviour.”
If we can encourage those around us to feel like they can share their opinions comfortably, then we’ve done our job. We are very proud to have PartnerService and Yding Gruppen as part of the Lynx family and we look forward to seeing what the Company accomplishes in the future!