It could be argued that time is the greatest asset in Dan Doyle Jr.’s portfolio. The CEO of Tampa, Florida-based DEX Imaging maintains a schedule packed with adventure, from involvement in critical customer takedowns to the latest acquisitions that build upon his $492 million (and growing) empire, not to mention dedicating time to a laundry list of professional and charitable organizations. And in his spare time, he’s been known to purchase golf courses and host LPGA events while also sponsoring up-and-coming female golfers. Plus, he’s an avid linkster in his own right.
That’s only scratching the surface of his agenda. However, there’s one thing Doyle doesn’t have time for, and that’s reinventing the wheel.
He’s catapulted DEX Imaging from a startup raking in $8 million in its first year of operations some 20 years ago to the largest network of office technology dealerships in the nation today, a tale that’s both inspirational and compelling. And in 2019, when it was announced that Staples would acquire the then-$300 million performer, it opened a world of possibilities that could propel DEX Imaging to even greater heights.
However, there’s sufficient reason behind why it seems Doyle has made, and continues to execute, all the right moves. His father, Dan Doyle Sr., provides a bottomless font of knowledge and experience from his time as the architect behind the DANKA Industries empire, which at its 1997 apex reached $3 billion. DANKA was sold to Konica Minolta in 2007.
Having experienced his share of triumphs and missteps, the elder Doyle—chairman of DEX Imaging—is an invaluable sounding board for his son. The duo meet for breakfast daily, and as much as it’s a bonding opportunity to talk about sports and everyday life, it also provides perspective to focus on best business practices while avoiding the pitfalls.
“I’ve got someone here who’s been in the copier world since 1973,” Doyle Jr. said of his dad. “There’s a lot of knowledge he brings to the table, and I’d be a fool to pass up those experiences. It really allows me to ask questions, pick apart an idea and get his feedback.
“He’s extremely honest about the paths he’s taken. He’ll tell me that he’s taken the wrong way at a fork in the road. So now, when I go down that same path, I have the benefit of his wisdom. That’s part of the reason we’ve been able to grow so quickly.”
Take note, office technology community—the Doyles have laid down the gauntlet. DEX Imaging’s goal is to reach $750 million in revenue through organic growth and acquisition. The timeframe? Eighteen months.
Optimal Conditions
Geography played a role in DEX Imaging’s rebound in the aftermath of COVID, as businesses were quicker to resume on-site activities in the Southeast and Southwest, its primary territories. The dealer enjoyed a stellar year for hardware sales, although the supply chain issue caused it to carry over nearly $20 million in backorders. During 2020, its clicks were down 38% from its normal run rate but have rebounded and surpassed 2019 figures. The company grew by 26%, and approximately 16% was through organic, same-store growth.
DEX Imaging is the largest reseller of Konica Minolta equipment, and it also counts Kyocera, Canon, Ricoh and HP among its lines. Two of its largest growth sectors in 2022 were wide-format equipment and a burgeoning list of enterprise accounts, which currently comprise 15% of its client base. The SMB space, however, is still the firm’s “bread and butter,” according to Doyle Jr.
Two of DEX’s top verticals are health care and automotive (including the top five dealerships in the nation), which faced their own set of challenges after the pandemic. Lucrative elective surgeries were placed in a holding pattern on the health care side, while automotive was beset by inventory issues. And while business ramped back up in the South, national accounts with holdings in major cities and states, including New York and California were slower to return.
However, Doyle Jr. notes the national trend is quickly resuming normalized activity. “People are coming back to the office, and the click volumes are returning to previous levels,” he said. “The commute during COVID was 15 minutes, and now it’s back to 45 minutes or an hour, so we’re seeing the customers coming back. The machine is running again the way it should be.”
The pandemic experience for DEX Imaging was unlike many; the dealer never resorted to work-from-home operations, and the Doyles didn’t lay off a single employee. It wasn’t without sacrifice; DEX reduced its profit-sharing plan and canceled its president’s club trip at the request of the company’s sales representatives in order to keep its nationwide payroll of 2,000-plus members on the books.
Little did the Doyles realize how long-lasting the pandemic would be. “Hindsight is 20/20,” Doyle Jr. remarked. “Dad and I would meet every morning and say, ‘I think this COVID thing is only going to last three or four more weeks.’ We were saying that every week for nine months. We convinced ourselves it was going to end, and our main objective was to keep everybody employed. Our entire workforce rallied around that. We just slugged our way through it, and we were really busy when the world started spinning again.”
Masters of M&A
DEX Imaging was born on Valentine’s Day of 2002, after Doyle Jr. had coaxed his father out of retirement. The goal was to become a $100 million business based in Florida, but the company didn’t acquire its first company—XEROGRAPHICS—until nearly three years later. In the lead up to that deal, the Doyles opened facilities in Orlando, Jacksonville and Sarasota. It wasn’t until 2008 that DEX pulled off its next acquisition, WADE, in Mobile, Alabama.
Organic growth primarily carried the dealer through its first seven years, but as DEX kept hitting milestones, the Doyles pushed the revenue bar higher and higher. Doyle Sr. felt it was extremely important to ensure that, in taking the M&A route to growth, they instill their culture into the acquisitions.
“I made a mistake in acquiring Kodak Office Imaging,” Doyle Sr. noted of DANKA. “They were larger than we were, and their culture—which wasn’t as good—ended up overtaking ours. That’s why it’s important to establish our culture from the start.”
Integration pains can be felt well beyond transferring one business to another on paper, and when onboarding a decades-old dealer, effecting cultural change can be more difficult. “Cultures are somewhat like fingerprints; everyone’s a little different,” Doyle Jr. said.
“When we go in to a new company, we want our culture there. Our model works; we built a business basically from zero to nearly a half-billion dollars. Nothing runs perfectly, but we’ve done pretty well.”
Today, DEX Imaging has 42 full offices (sales and service) in 11 Southeast and Midwest states and 62 service hubs throughout much of the country. The Doyles estimate their service technicians cover 80% of the United States’ business map, including more rural areas such as Montana and North Dakota.
It was an active 2022 for DEX, which obtained nine companies (34 total since its 2002 inception). The larger deals included Meritech, a $30-plus million performer in Cleveland, and Hendrix Business Systems, a $20 million dealer in Matthews, North Carolina. In the summer of 2021, the Doyles acquired 10 direct branches from manufacturer partner Konica Minolta.
The Buying Machine
DEX Imaging runs a lean operation, and a pair of M&A specialists are dedicated toward cold-calling in search of potential deals. Its network of industry colleagues helps to scout out candidates, but the heart of the operation is the “third floor,” where the Doyles, Paul Natale and Mark Rodgers work the big board in the conference war room, evaluating the pros and cons for a possible acquisition. While the “perfect deal” may be a unicorn, the brain trust has been effective in finding optimal fits.
“We know a company isn’t going to fit perfectly in our mold, but as long as we’re getting great people, we can make it work well,” Doyle Jr. said. “We bought a well-oiled machine with Meritech, which turned out to be a great transaction, a stepping stone for us to get into the upper Midwest. We ended up with some terrific people joining us.”
The Hendrix acquisition boasted a similar M.O. of a strong dealership and a quality, tenured staff—no small consideration in light of the industry (and national) employment woes. “It used to be that we’d look at a deal as more of a MIF buy and hope to get good techs. It’s more of a plus now to acquire great management and team leaders,” Doyle Jr. noted.
Why do sellers choose DEX Imaging? Expectation-setting goes a long way toward eliminating misgivings sellers have in turning over their operations, some of which may have been cultivated over decades. Doyle Jr. believes it’s important not to sugarcoat the process.
“One thing we always point out is that we’re going to be making changes,” he said. “Others may say everything’s going to stay the same, but we have to make sure we can get the synergies we need. Some owners may not want to hear that, but most prefer to get the facts up front. We’re going to bring in some corporate functions in the process, and they’re going to have access to certain products they don’t currently offer.”
Although he estimates that 70% of owners transition out following a deal, 100% of those who chose to remain are still on board. Changes are implemented gradually, as to not interfere with ongoing sales within an acquired company. In the long run, the obtained companies find DEX’s commission structure and pricing to be more advantageous than what was previously in place.
“There’s probably some shaky ground for about 60 days, and then it starts running smoothly,” Doyle Jr. noted. “Again, we’re not perfect. We do break a few eggs here and there. But for the most part, we do pretty well.”
In terms of future deals, the Doyles aren’t fixated on any particular region of the country. California—where the company only has techs—New York and all of New England have yet to be tapped. When it comes to deal-making, it’s more about bandwidth as opposed to desire.
“We can only acquire so much in a year, because we only have so many people who can help integrate these companies,” added Doyle Sr., the author of 200-plus deals at DANKA.
The Staples Factor
In early 2019, the industry was shaken by the news that DEX Imaging had been acquired by big-box retailer Staples. As an owner, Staples has given the Doyles a wide berth, especially since DEX has managed to hit all its financial benchmarks. The benefits of the union are readily apparent; Staples has been a gateway to enterprise accounts for DEX, which has also taken the reins of its lucrative managed print services business.
“We’re one of those Cinderella stories. They acquired us, and they haven’t been here since,” Doyle Jr. said. “They call us monthly to check in, but really, they just let us run the business. We’ve performed to their numbers, so that’s part of it. We’ve done some shared sales on accounts they have, and they’re excited about the way we operate. They love the recurring revenue stream, and they’ve helped us enhance our managed print side of the business.”
The path to $750 million will also be paved through organic growth within the company’s existing footprint, and the Doyles are rolling out new initiatives to run leaner and more effectively while streamlining processes. While all indicators point to a resumption of normal business activities throughout much of the country, the Doyles are cautious about getting ahead of their proverbial skis. The initial goal to reach $500 million was delayed by COVID, and although DEX Imaging appears to be hitting its full business stride, Doyle Jr. has come to expect the unexpected.
“We didn’t have COVID in our plans, just as we didn’t expect two hurricanes to hit the state of Florida this year,” he said. “Our distribution center in Dallas closed because of an ice storm, as did our facilities in Memphis, Tennessee, and Jackson, Mississippi. So while I’d love to say it’s a perfect world and we’re humming along, we keep getting curveballs thrown our way. It’s all about being quick and agile enough to make the necessary moves and keep pushing forward.”
From NASCAR to NHL, Sports Advertising has Proven a Boon for Business
Difficult though it may be to believe, there was a time not long ago when DEX Imaging didn’t boast the level of name recognition it enjoys today. When DEX was merely an $8 million dealership vying for business in sunny Tampa against a plethora of well-heeled manufacturers, Dan Doyle Jr. and his father were searching for ways to bolster brand recognition.
There wasn’t an abundance of viable options to raise DEX’s profile. Satellite radio had effectively fragmented general audiences into smaller, specialized groups. And their home state of Florida was cracking down on the multitude of billboards that were pockmarking the interstate highways. What better way to reach the masses, Doyle Sr. thought, than through sports marketing? As a former minority owner of the Devil Rays MLB team, he saw the value of sports in gaining exposure on the business side.
“I wish I could say it started with a great marketing idea, but it really didn’t. It was more ego-driven,” Doyle Jr. said with a laugh.
It began with supporting the Tampa Bay Lightning franchise in the NHL and has since grown to include MLB, collegiate sports, NASCAR, IndyCar, the NBA and LPGA. Backing the Lightning was fortuitous; the franchise has appeared in four Stanley Cup finals during the past eight years, which has provided a high level of national exposure on major TV networks. In fact, during the 2021 playoffs, the DEX logo adorned the helmets of all Lightning players.
Technology has elevated signage to another level. Digitally enhanced dasherboard advertising allows TV audiences to see branding superimposed on or near the playing surface, a creative ploy for broadcasters to sell more ads and another outlet for ad buyers to gain additional exposure. DEX also sponsors in-game features on stadium scoreboards.
The success with the Lightning led the Doyles to expand their reach into four more hockey arenas, and the digital ads also help raise brand visibility in out-of-town markets where DEX Imaging may be looking to acquire. From a selling standpoint, sports visibility helps to warm prospects who gained insight into the dealer simply by catching last night’s game.
The partnerships with arenas and sports franchises also allow DEX to host clients and prospects at certain venues. “Nobody wakes up and says, ‘hey, I want to buy a copier today,’” Doyle Jr. said. “When we can entertain our clients and give them a once-in-a-lifetime experience at a hockey arena or racetrack, the customer will remember you, and that’s what we’re looking for.”
On the NASCAR side, DEX sponsors the No. 21 car driven by Harrison Burton in the Cup Series. The Doyles have been longtime friends with Burton’s father, Jeff (a former NASCAR star), and have sponsored the younger Burton since his days of racing go-karts. Burton’s ascension eventually led to the Doyles being introduced to the PENSKE Corporation, which opened the door to do business with PENSKE’s 196 car dealerships. Owner Roger Penske personally provided a reference that led DEX to win another major dealership, not to mention an agreement with Shell USA.
As an aside, the Doyles have developed a passion for women’s sports, namely the LPGA circuit. Not only have they purchased a local course, the Pelican Golf Club, they also play host to a tour event that has the highest prize purse of any non-major event. The Doyles are also providing financial support for up-and-coming female golfers, which caught the attention of Annika Sorenstam, arguably one of the greatest golfers in the sport’s history. Sorenstam came on board with her support, and the tour stop is being renamed in her honor.
“Dad and I are both golfers, and we thought that women golfers were underserved,” Doyle Jr. said. “So we started supporting young ones to give them a leg up for their first two years. That allows them to focus on golf and achieve some success.”
Last December, the Doyles held a 12-hole charity golf tournament, boasting the likes of Tiger Woods, Rory McIlroy, Justin Thomas and Jordan Spieth under the lights as part of Capital One’s The Match series. The event raised $3 million for Southwest Florida hurricane relief.
