Donagh Kelly’s KN Circet is a €1.1bn a year infrastructure player with huge European ambitions powered by fibre broadband and 5G.
KN Group, which merged with French firm Circet in 2018, was founded by Kelly not long after he left college and took a major risk by acquiring capital equipment to start the business when his previous employer had cold feet.
Post-merger, KN Circet employs more than 2,500 people. Responsible for constructing most of the high-speed fibre broadband networks that are crisscrossing the towns and cities of Europe, the company provides services to various blue-chip clients who include Eir, Openreach, BT Ireland, Enet, Virgin Media and ESB.
“The largest players in our sector would have €3bn in revenue. We should be gearing towards becoming one of the largest in the world”
Donegal native and keen rally driver Kelly believes Ireland could soon be one of the best-connected countries in Europe in terms of digital infrastructure.
In recent months KN Circet secured a major deal with Eir to build the optical core of its €500m fibre network.
At The Real Deal 2019 event in Kildare recently, Kelly made it clear that he was just as ambitious for KN Circet as he had been when he first started out.
“The largest players in our sector would have €3bn in revenue. We should be gearing towards becoming one of the largest in the world.”
He said he intended to get there by focusing on opportunities in fibre and 5G. Countries like the UK and Germany have less than 3pc of their nationwide networks made up of fibre and currently stand at a crossroads in terms of next generation infrastructure.
The company recently revealed plans to create 600 new jobs in Ireland over the next year and a half.
Highlights from Donagh Kelly at The Real Deal 2019
Entrepreneurship and scaling the business
Inherently, there is something within you. I don’t think he could decide to become an entrepreneur. I think it’s just something within you. And, certainly for me, I didn’t come out of Bolton Street thinking I was going to ever lead a business. But I suppose every time I looked at businesses I was really, really interested in how they operated, to see how their margins, how they could grow. I looked at lots of businesses that failed and wondered why they failed. You’re always asking those questions. So I think it’s just something that is naturally within you. And thankfully for me, I was able to bring that into a business and allow it to flourish.
For me, effectively, I had KN running as a sideline business and I took over another company in 2002. That had failed, I consolidated the business back to Ireland and in 2002 had done around 10m in revenue. This year we will do just shy of 400 million. And we would have done that over a period organically. We didn’t do any acquisitions. But I think continuously set the bar. As a business, we always kept setting the bar high, looking to how we could grow and people would have often said ‘are you not happy enough, are you not happy with what you have?’ We’re never happy. And it’s not that we’re greedy. It’s when you keep setting the bar higher and higher. Everybody has to run. Everybody has to keep catching up. Nobody gets to rest. And when you do that, in one sense, you never become fat. You never have enough people. You’re always chasing it and chasing it.
KN joining Circet
I was approached one night in February 2017 on LinkedIn by the French company, Advent. They had just done a deal. And they said, ‘Look, we’ve identified your business as a potential partner. Are you interested?’ The majority of time when I look at LinkedIn it is like Facebook for business, I cannot delete. I sent it to John Sheridan and I said ‘Have a look at that for me.’ And John was back within about 10 minutes. ‘Bloody hell, this is one of these are one of the biggest PEs in the world. You got to take this serious.’ And I went to London and met two French guys in a pub with a pint of beer and a steak pie. And I felt pretty good and we done a deal very, very quick. The one thing I had done, I had my own DD (due diligence) so we had engaged with PwC and with A&L Goodbody. We had everything ready. I wasn’t expecting that approach. But it obviously made the thing very, very swift for us. And, you know, that is another bit of advice, you know, somebody coming in to do the due diligence on your business, you’ve got to answer questions. When you prepare your own due diligence, you can answer your own questions first, and preempt what might come. There was less pressure. When you’re looking after your own due diligence, you got to make that investment. But for us, it was an investment worthwhile.
You can’t confuse commitment and loyalty with, I suppose, capability. Some of the worst decisions we’ve made is leaving people in positions that are not capable of filling and as a business grows, obviously, you got to keep changing. The choice of management is probably the hardest decision. Especially we’re a services business. It is all about people and you got to keep looking to try and change that. And I’d say be generous. Be generous with your management team. Make sure that they share in the success of your business and that you reward their contribution to your business in the right manner.
Certainly, some of the advice that I would have is keep changing your management if you don’t have the right team. And don’t have loyalty for the sake of loyalty. There has to be a contribution and a value contribution to your business. And you will bring in people and they won’t work, move again. Keep trying. So that’s a constant evolution of building that team, and it’s never perfect.
- The Real Deal 2019 event took place in Goffs in October 2019 and was supported by Renatus, Bank of Ireland, Fitzgerald Power, The Sunday Times, The Panel, Davy, Byrne Wallace and The Pudding. To get more video highlights, click here
Written by John Kennedy (email@example.com)
Published: 14 November, 2019