Eagle Technologies: an entrepreneur’s diary

Business angels wanted too much equity. VCs weren’t interested. Undeterred, Chris Rayner, founder of plastic card printing business Eagle Technologies, last month secured the investment he needed.

In the first of a series profiling the company’s growth, Growth Business finds out how he did it.

Founded in November 1999 by the energetic Chris Rayner, Eagle Technologies has rapidly established itself as a leading player in the plastic card printing market and the largest business of its kind in the UK. Essentially a distributor, the company supplies customers (from leisure centres to loyalty card scheme operators) with a variety of printers produced by the industry’s leading manufacturers.

As full colour offerings retail for between £999 and £3,000 apiece, the market potential is, according to Rayner, lucrative – just one reason why the company is already profitable.

A growth market

Recent reports have suggested that more than 90 per cent of the UK population now carry at least one printed plastic card. Furthermore, research organisation Datamonitor indicates that this figure is steadily rising as individuals add still more store loyalty cards to their university, school or workplace security passes, gym membership IDs and credit/debit cards.

Operating technical support and consultancy divisions alongside its core distribution business, Rayner sees Eagle’s market as growing by around 30 per cent each year. It is from this base that he hopes to almost double turnover from £2.2 million to £4 million in the next 12 months.

Needless to say, such ambitious growth targets are not reached easily and Eagle recently found itself in need of cash to help bolster its team and develop new projects. For Rayner, however, the process of first identifying the right funding option and subsequently raising the cash proved to be complex and convoluted.

A turn-off for VCs

‘We contemplated business angel funding,’ Rayner reminisces, ‘and we could have taken that route, but we would have had to lose equity and though that’s not scary in itself, you have to ask what you’re getting in return.’

For that reason Eagle’s attentions switched instead to venture capitalists (VCs), with the hope that these larger organisations would be able to offer more in terms of advice and ongoing support.

Keen to gain exposure to as many potential investors as possible, Rayner chose to attend a venture capital conference in London but was disappointed by the message he received.

‘We spoke to a lot of people,’ he recalls, ‘and [the impression we were given was] that if you’re looking for seed funding then great. If your revenues are high and you’re about to launch something new, then fine. But if you don’t fit into either of these camps then you’re not going to be an attractive investment for most VCs.’

In spite of this setback, the event was not a total write-off for Eagle. It was at the conference that Rayner first discovered the Small Firms Loan Guarantee Scheme (SFLGS). This is a programme through which expanding early-stage businesses that have previously been turned down for loans can secure finance, with the aid of a Government guarantee.

Mixed reaction

The SFLGS has enjoyed a mixed press to date, with many detractors drawing attention to difficulties applicants have experienced in actually gaining a loan. Various measures have recently been put in place with a view to making the process easier, though, and for Eagle, things ran relatively smoothly – one initial setback relating to financial forecasts aside.

‘With our first application, our banker, Barclays, felt that our earning projections were too high,’ Rayner acknowledges. Following some changes, the company’s application was approved in early February – with Eagle gaining ‘a six-figure sum’ to help finance its expansion plans. A further tranche of cash will be made available depending on performance further down the line.

That said, Rayner isn’t quite ready to dismiss the VCs. ‘We are still [looking at venture capital] as some of the potential acquisitions we are considering are multi-million deals so they would appeal to them.’

The path to expansion

The cash raised via the SFLGS will be used to fund Eagle’s ambitious expansion plans.

‘We’ve identified areas we’d like to go into and it’s just a question of getting there. So far we’ve hired one business development and one sales manager – we’re now looking for someone else to focus on more business opportunities,’ Rayner explains. One of the more obvious opportunities for Eagle to exploit relates to the provision of services. Distribution remains the prominent division but, Rayner admits, ‘we can add value to this through things like next-day delivery.’ In addition to this, the company’s other two divisions – Eagle Bureau and Eagle Service & Repairs – also afford an opportunity to generate higher margins and raise the corporate profile.

Service & Repairs achieves this by attempting to offer a more thorough service than the individual printer manufacturers. Bureau, meanwhile, primarily allows clients that are too small to acquire their own machines to outsource their printing needs to Eagle.

Outsourcing is not confined solely to the smaller firms either.

‘We have produced cards for the RAC, Vodafone, Blockbusters and many more… and have also conducted some consultancy work for Transport for London and various Government departments,’ Rayner elaborates.

ID is the key

Perhaps most exciting of all, however, is the company’s plan to launch a nationwide young person’s ID card, a scheme that – should it take off – would represent a significant PR coup for a business of Eagle’s size.

Though the Government’s plan to introduce compulsory ID cards has met stiff resistance, Rayner has high hopes for Eagle’s project. This is because the scheme would be run on a voluntary basis, with interested children and teenagers applying online. Moreover, Eagle’s plan is that these cards would contain a smart chip containing information relating to a child’s specific medical problems and allergies and providing emergency contact information.

It is easy to see parents welcoming the scheme, so the challenge for Eagle will be to convince children and teenagers of its merits too. A local launch in Berkshire is planned for the autumn and ‘if all goes well,’ says Rayner, ‘we’ll try and take it nationwide in 2006 and we are now looking for a national sponsor.’

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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