News of an MBO at North-East-based Simpsons Group came in February. The move saw well-known chairman Mark Simpson and his shareholding brother and sister exit the business formed in 1972 by Bill Simpson. Bill McNally (MD) and John Quinn (finance director) have stayed on to “lead the new management team through a period of transition” but in August the new management team takes over. So how will an MBO affect what was a family business? I asked new commercial director Mark Jerrard.
By Lesley Simpson
At the time the MBO was announced its outgoing
chairman Mark Simpson said: “We have been
working for several years on a succession plan.”
Can you expand and explain how the MBO team
came together?
All the MBO team were interviewed for senior
management positions quite a while before we
realised there was a chance to buy the company!
Over the last two to three years Mark has been
getting his ducks in a row because succession
planning is not something that can be done quickly,
and we’ve all been working closely with the board for
some time – looking at business strategy etc. and
being fully immersed in how the company operates.
Well over a year ago now, we four senior managers
– those of use who make up the MBO team: [Dean
Williams, MD; Mark Jerrard, commercial director;
David Dowson, production director; Sarah Tishler,
training and development director] – were in a
meeting with the board when they put a slide up and
asked if we’d be interested in buying the business. It
was actually a surprise to be honest.
But the top priority all around was job security
for everyone at the company. And to stress that
everything is staying the same. The name is still
here, the buildings are still here, the brand is the
same. The only that is changing is the top level
management.
We should be safe hands. Together the MBO
team has over 100 years knowledge of the printing
industry and has a great deal of knowledge of the
Simpson Group specifically. Plus, two of us – Dean
and myself – are very customer centric, and two –
David and Sarah – are internally focused, so there’s
a good balance.
Simpson Group was a family business. Now it’s not.
Do you think that in itself an important shift?
The brand is really the family! People know the
Simpson Group and it’s remaining the Simpson
Group.
I don’t think it makes any difference to how a
company operates in terms of being a ‘family’
company or not outside of that. And at the end of
the day, Mark Simpson is still at the end of the
phone!
Dean Williams has referred to a three-year
business plan – to drive forward future growth plans
in both retail and in new vertical sectors – and with
continued investment in technology to create high
value jobs. Can tell me more?
Retail has been our traditional arena as you know,
but there are other markets out there that fit with
our capabilities and we need to explore those.
We need to diversify beyond retail – which will
remain our bread and butter – and if we can get our
automation right we can create higher value jobs
within the factory, especially for certain markets that
will be somewhat new to us.
The three-year business plan started November
2017 [the company’s financial year ends 31
October], and the aim is to increase profit as well as
turnover. We see particular opportunity for delivering
print solutions – of the type we already process – in
areas like the coatings and horticulture markets.
We are now doing quite a few units – FSDUs etc.
to hold tins of paint or whatever – for the coatings
market. The actual printed product may be classed as
print for the retail space in that the units are being
used to hold items to be sold – but it’s a different set
of customers that we’re dealing with. We are making
the units for the coatings companies not for the
retailer.
We are continually looking at new markets, and
always have done, and that will continue to be the
case.
In terms of investment in technology that’s an
ongoing situation. There’s nothing specifically that
we’ve decided to purchase. We’ve got all the main
bases covered.
The Simpson Group is an £11m turnover business
with more than 100 staff at its NE HQ, and a
satellite operation in Langley. Given your three year
plan, should we expect it to look much different by
the end of 2020?
I would hope our turnover would be £13-14m by
then, and profits up thanks to the new markets and
customers we’ll be going to.
The thing is, while we have vision for growth, it’s
not going to include massive change. Prior to the
MBO we’d already done research and chosen markets
where we think we can make more money and diversify
beyond retail – a sector that we can’t rely on because
while we do well from it, it’s facing a tough time.
We expect our customer base to grow as we go into
new markets, but the thing is, the business overall
has got to stay the same.
What hurdles have you had to overcome in the
transition phase, and is there a message to other
potential MBO teams there?
It’s very early days! Maybe we’ll have more to say on
that is six months.
The biggest challenge we’ve faced is in terms of the
workforce. Some of the staff have only ever worked
under the old board, so this MBO is the biggest
change of their working lives. As an MBO team you
have to understand that. But what certainly helps is
that all of us on the new board have been around for
years now, so we’re known to all the staff and that’s
hugely significant when it comes to having a smooth
transition. I think it must be much harder if you take
over a company where you’re not known.
What Bill [McNally – current managing director] has
done is ensure everyone internally understands the
gameplan. And that all the customers do too.
What sort of a role do you expect the new non-exec
chairman – David Darcy of Vistage International – to
have?
He knows us very well and has been involved with the
company for a long time, so it’s really a case of him
being there to add support and provide guidance in a
kind of mentor capacity.
All of this is quite new to us in the MBO team. We’re
still very much in a transition period, but as far as
we’re concerned it’s important to get the message out
that it’s business as usual. We have an established
relationship with the former shareholders and
directors and that’s been key to what is proving to be
a smooth handover.
