With the agreement now finalized and 50 key managers participating in the new structure, Comdata CEO Maxime Didier describes how this opens the door to plan for future growth and further sector consolidation.
Could you summarize the main points of the agreement with your financial partners and the rationale for the restructuring?
Maxime Didier: Basically, what we have done is a ‘standard’ debt to equity deal. We wanted to reduce Comdata’s outstanding debt, and we reached an agreement with our financial partners to move a proportion of it to equity-like instruments. Without going deep into the precise financial or technical details, I would say that we’re delighted with this, which gives us more financial flexibility and agility.
Was a new financial structure always the intention?
MD: Yes. We felt the debt was too high and planned to reduce it. Finalizing the agreement was complex due to the number of lenders involved. So it took some time to get everybody around the table and agree on the details, especially when the financial markets were going through the pandemic. We also had a leadership change when I took over the role of CEO in October 2020.
All in all, we are now getting to where we want to be. We have reset the financial balance and can now fully leverage our business model and capitalize on our opportunities.
How will this affect Comdata’s operations going forward?
MD: The restructuring didn’t affect our daily business operations. Still, it’s fair to say that putting this type of financial agreement in place does take up a significant amount of management time and energy.
Now that we have delivered our plan, we can focus solely on the business and are more agile to seize our growth opportunities. The agreement also shows that all of our financial partners believe in the company and the plans we have put forward.
Another headline element of the agreement is that Comdata’s management team is increasing its minority shareholding to 40% and that 50 key managers are becoming participating shareholders. That’s an exciting change?
MD: Yes, it is. I was already a significant minority shareholder in the company, and it will significantly increase. Now we will also have 50 of the key managers owning shares, which is genuinely exciting in transforming the business.
There are really two ideas here. The first is that I want to push this solid entrepreneurial engagement across the company. Having this plan across such a large number of managers is about embedding a sense of ownership and commonality across– it’s a very different culture, which brings tremendous energy for the benefit of our clients.
The second idea is about drawing our people even closer into the business and making it stronger. The number of shareholders is higher than you often see in these financial maneuvers, but I wanted to get the highest traction with maximum people. With 50 managers participating – and in the future the aim is to increase it – that’s a wide range of managers across different countries and roles.
You’ve said that strengthening your capital structure will allow you to capitalize on new opportunities – where do you think these opportunities lie?
MD: The completion of this maneuver – and other changes over the past six months – will put us in a strong position in the market, win large clients, and innovate to shape the future of Customer Management. So, we can deliver stronger organic growth, for sure, both in the short and long terms.
In addition, with our new capital structure, we are in an ideal position to seize external growth opportunities and participate in sector consolidation. 2022 will be an important year for us as we leverage and capture this market opportunity.
Tell us more about this future sector consolidation, and where Comdata’s strengths and opportunities lie in relation to this?
MD: Firstly, Customer Management business remains very fragmented worldwide.
Secondly, some subscale players want / need / deserve – however you want to see it – to get to the next level. By the way, this was my rationale when I sold my own business to Comdata – I was an entrepreneur who saw that Comdata was the right platform to aggregate it still is!
And this is where you make the difference: when you can build a suitable and scalable ecosystem for the opportunity and which talent wants to join. This comes back to the underlying culture I was talking about before with highly engaged and high-performing leadership and a business that top ‘tier one’ senior managers want to join and grow into. This is a key differentiator as the sector consolidates.
How can Comdata’s growth ambitions benefit your clients?
MD: For our clients, having a growing provider means they get access to more skills, more geographies, more strengths, more services. With this transaction, we are now even more agile to make the most of our business model and help our clients extend into new areas – industries, customer business processes, or geographies.
But it’s also essential to point out that we keep a very low center of gravity. A significant proportion of our clients are Italian-only, or French-only or Spanish-only, and so on, and they could perhaps see our ambitions for growth as a distraction to serving them well. But this is where I trust our GloCal decentralized organization model and strong local empowerment.
Can you say more on that?
MD: My firm belief is that our business is multi-specialist, multi-region, multi-country – we are very close to each of our clients on the ground at a local level and very close to their businesses. That’s what I mean by having a low center of gravity.
That’s also the reason why I’m very cautious about not letting our Group headquarters grow too prominent. We are convinced that the key to growth is to bring the best people into the organization at local level to super-serve the clients. We have done that and will keep on doing it.
What does that approach mean for Comdata’s international clients?
MD: Obviously, they have different needs, especially in coordination, but we offer a similar approach in terms of proximity – living and breathing their businesses and being close to their challenges. And because we know their customers’ needs and specificities in every country where we operate, we serve them better. We have a dedicated business unit to serve global clients and, with our growth, they too will benefit from access to more skills, more geographies, and more strengths. And they too benefit from our key managers having high commitment to Comdata.
You’ve been CEO of Comdata for over six months now; what have been the big changes and achievements during that time?
MD: The first change or achievement is building a talented leadership team, perfectly aligned and working together with trust. I think this is important – getting the right team is key to the success to come.
The second major achievement has been changing the culture at Comdata, raising the bar getting the best out of what we do everywhere around the globe. It’s now more challenging – in the best sense of the word. It’s about introducing constructive challenges and the right to fail and having a more genuine relationship across the team. And of course, we have also accelerated our digital transformation and implemented our Comdata Smart Hub delivery model, so it has been a very intense period.
And what can we expect from you over the next six months?
MD: Well, as a ‘born’ entrepreneur, I’m not someone who wants to stand still and look at what’s been achieved with contentment. I always feel that I’m running late, that I have a mission, that I want to achieve more and get it faster.
With Comdata, I have an embedded solid feeling that we are not yet where we should be in the market despite our merits. There are different legacy reasons for this, but we now have better-shared values and an outstanding, talented team at every level, and we will go further.
We operate in a fast-moving world, so there will undoubtedly be further changes, but we have the right people, the right organization, the right culture and the right values.
That gives us a different positioning and a tremendous competitive advantage, so now comes the time to demonstrate: stay tuned!