NEP Group Inc. is behind the scenes — literally and figuratively — of a lot of the sporting and live events we watch on television, whether that’s the NFL, NHL, MLB, the Olympics, The Voice or Jimmy Kimmel Live.
The company is a leader in the industry, but not well known to the public.
“We quite honestly enjoy it that way. Again, as an outsourced service, our job is to be an extension of our clients, and our clients are great at producing content, live sports and live entertainment,” says CEO Kevin Rabbitt.
“Our job is to be their technical partner, so that we can help enable them to tell the stories that they want to tell to their audiences.”
Rabbitt, who joined the company in 2012, jokes that he has a hard time explaining to his parents exactly what NEP does.
For the record, it’s a technical outsourced services business focused on live television and events. Or in other words, NEP provides engineering and complex technical solutions.
When Rabbitt took over for Founder Deb Honkus, now executive chairwoman, the company was a clear market leader in the U.S., with about 60 percent market share.
“The United States was a pretty saturated market, so the question was how do we continue to grow, as growth is the lifeblood to a company,” he says. “It creates opportunities for employees. It allows us to fund continued investments for clients.”
The solution NEP — and its new private equity firm owner — came up with was to create a worldwide network.
“That meant expanding to new geographies and expanding to a broader range of services as client needs continue to evolve, beyond remote studio and video display,” Rabbitt says.
In the last three years, NEP has more than doubled in size. It now operates in 16 countries, with greater than 50 percent of its business outside the U.S. And it has added five new service lines, for a total of eight.
It hasn’t always been easy, Rabbitt says, but NEP has stuck to an aggressive growth path and made the right moves to become a global business.
Increase the footprint
When you want to implement a new growth strategy, it starts with two things, Rabbitt says. What are your client needs? So, where do clients need your types of services? If you’re doing it just to become international, it doesn’t make sense.
And, two, how are you going to execute the plan? NEP wanted to grow through acquisition, as opposed to starting up new businesses in new geographies.
NEP only wanted to add companies that fit its culture — a culture of service leadership and innovation where clients from both companies would work in each other’s space.
NEP is in a small enough industry that it knew who would fit those criteria.
So, Rabbitt called the CEOs and owners of about 15 target companies and asked to meet with them to talk about NEP’s plans.
“I went out and did about a month-long self-driven roadshow,” he says. “I went and talked to all the CEOs that we knew were service leaders — to get to know each other a little better.
“I outlined what we were trying to get done and it really resonated with many of them,” Rabbitt says. “They said, ‘Yeah, that is a better way to service our clients. Our clients’ needs are growing outside of our specific geography.’”
The first acquisition happened to be in Australia.
While it was mainly because Global Television (now NEP Australia) was ready to sell, there were other benefits as well.
He says the company was clearly the Australian market leader and had a fantastic leadership team. (Rabbitt eventually brought the CEO over to become the corporate president and COO.) But it was far enough away that NEP would have to fill in between; there was incentive to continue executing the strategy.
“It sent a real message to the industry that we were serious about doing this, by going that far away on the first one,” he says.
Since then, NEP has done 12 acquisitions, picking up market leaders throughout Australia, Europe, the United Kingdom/Ireland, and most recently a Singapore company that works in Singapore, India and the United Arab Emirates.
“We certainly have most of the globe covered,” Rabbit says. “We can do any live event throughout the world, from that footprint, but we’re still not done at this stage in the game.”
Fitting everyone in
NEP stayed disciplined throughout its acquisition process and turned down companies, like a price discounter, that didn’t fit the profile.
“That has been the No. 1 thing: we got it right at the beginning and we’ve kept it right,” Rabbitt says.
Then, you want to visit the local leader and spend time with them. You interact with them and watch them interact with their people.
The potential acquisition will always present what it says its culture stands for and how it re-enforces it. Rabbitt says he then applies that to NEP’s core values.
“Our core values are central to everything we do,” he says. “It’s part of our acquisition strategy — do folks fit these core values? It’s part of our hiring strategy… It’s part of our promotion strategy, our performance reviews every year.”
NEP also kept the local leadership. Each geography has its own traditions and customs, so it only integrated back office and non-client facing functions.
“We’re leaving in place the local management teams and they’re largely running a lot of the same businesses they ran before, but now with a broader network around them in which to service clients,” he says.
Rabbitt and his chief strategy officer, who worked previously at the same consulting firm, have done a lot of post-merger integrations, so they followed similar best practices.
You have to have a robust communication plan and a dedicated integration team, he says. You also need to focus on the high value areas of what needs to get done from a governance standpoint, while working quickly so you can move on to business as usual.
NEP has gotten to the point now where it can get through the integration in about six weeks — because it has had so much practice, Rabbitt says.
Build with strong leadership
When you have a truly global footprint, you face new realities. One of the biggest challenges is also one of the biggest benefits. You’re in a business where the sun never sets and you’re supporting clients 24 hours, 365 days a year.
“The hard part about that is that myself or our chief operating officer will get calls, or have business to do at all hours of the night, and that we travel on an ongoing basis,” Rabbitt says. “Each of us are on the road greater than 50 percent of the time.”
Fortunately, he says the division presidents are like-minded and everyone enjoys finding ways to integrate solutions together.
“They have all run businesses before, so they don’t require a heavy degree of oversight on a minute-by-minute, day-by-day basis,” Rabbitt says. “But you’ve still got 20 different entrepreneurs working together.”
As independent and self-sufficient as they are as a group leadership team, you have to get out to the remote leaders and see their clients in that local geography on a consistent basis, he says.
That way, there’s a real relationship with the corporate office. For example, once a year, NEP runs its board meeting in a different overseas location.
“It’s important that we are very visible, as a board and as a leadership team in the states, to re-enforce all of the things that they know and love about their local teams,” Rabbitt says.
The corporate office also hosts company leaders in Pittsburgh once a year, and has monthly global meetings and one-on-ones every two weeks between Rabbitt and division presidents — all to stay in touch.
“Running international business is to me really not that difficult as long as you have strong leaders running the local markets,” he says. “That’s what the key is, and that’s not a whole lot different from any business. If you’ve got strong people running things, you have the ability to manage no matter where they are.”
With a strong team, good financial partners and fortune at picking the right acquisitions, Rabbitt says NEP’s strategy of putting a worldwide network in place has become a reality.
“We’re winning more and more business because we’re putting services together or putting geographies together to service clients across packages that others can’t compare to,” he says.
“So you’re winning things on an apples-to-orange perspective, as opposed to an apples-to-apples, which they’ve always been in the local markets.”
- Expand around your client needs.
- Find like-minded businesses for acquisition.
- Keep the strong leaders, no matter where they are.
The Rabbitt File:
Name: Kevin Rabbitt
Company: NEP Group Inc.
Born: Overland Park, Kansas
Education: B.A. in managerial studies, Rice University; MBA, Harvard Business School
What was your first job and what did you learn from it? I was in sixth grade and I had a paper route. I convinced the teacher to allow me to go home at lunchtime and miss recess afterwards. I’d ride my bike home. I’d fold and deliver the papers.
Afterwards, I’d go up to the local drugstore and I’d already taken pre-orders from all my classmates. So, I would buy candy for 30 cents and sell it for $1. I had all of the money in advance, so it was definitely good cash management.
I did better on the candy than I did on the paper route, but I needed the paper route, in order to convince the teacher to allow me to leave.
I learned that building relationships matters. I learned how to be entrepreneurial, where you can do more than one thing at a time. And I learned that if you meet client needs, you could generally charge a premium price.
What’s the best business advice you’ve ever received? The first business I ran was a place called Texas Ice Stadium. It was a youth-oriented ice skating facility in Houston, Texas. The owner was Ralph O’Connor, a former Fortune 500 CEO and a mentor of mine.
He taught me: Make sure you treat your people well, because those are the people who are truly delivering service every day to your clients.
What do you like to do when you’re not working? I am a youth sports coach for two of my four kids. I coach them both in basketball, as well as my six-year-old son in soccer. I get a lot of satisfaction in not only coaching them but their friends. I like them to develop the sports skills, but it’s more about learning how to compete and how to work hard at something.
I’m also extremely active in the Young President’s Organization.
If you weren’t a CEO, is there another job you’d like to try? I’d be a college basketball coach. I was an assistant coach when I was at Texas State University and we went to NCAA tournament in 1997. What I love about college basketball is seeing young men at that age develop, both their basketball skills, but also their lifelong leadership and teamwork skills.