Puzzling out PFI’s M&A debacle

McMurray: Disastrous acquisition spree

A rampant buy-and-build strategy does not automatically result in success – as ex-employees and creditors of PFI Group can sadly testify – so what was the strategy behind the massive growth plan?

On its LinkedIn page PFI Group trumpets a network of 17 complementary and collaborative businesses, a collective turnover of £85m-plus (although its most recent accounts show sales of less than half of that), and states: “Our vision is to be the most trusted and respected provider of signage and branding products throughout Europe.”

Oh dear. Events over the past year have seen trust and respect go out of the window, along with much of that sales figure. 

It’s a salutary lesson, should one be needed, that buying lots of businesses in quick succession is not an automatic guarantee of success. 

Pandemic purchasing splurge

Quite what spurred CEO Darren McMurray to embark upon such a disastrous acquisition spree at the height of a global crisis is not clear. McMurray has been a director of Rymack Sign Solutions, which trades as PFI Group, since 2006 when he was one of the firm’s two founding directors. 

What’s intriguing is how the PFI buys really sped up during the pandemic (see boxout). That period during 2020 and 2021 was a time when most business leaders were battening down the hatches and carefully counting their cash. 

And while it’s certainly the case that one person’s crisis can be another’s opportunity – at least for those with a sound balance sheet and plenty of business nous – that hasn’t turned out to be the case for most of the PFI buys.

With the exception of Kesslers London and Proportion London, sold to an MBO team in November, and the Cestrian Imaging Assets sold to Service Graphics, the rest of the companies purchased since the spring of 2020 are either shuttered, bust or teetering on the brink.

A rare positive comes from Kesslers managing director Daniel Astarita, who praised McMurray for allowing the management to buy it back: “He has stuck to his word and I thank him for that.” 

Special adviser

Criticism elsewhere is rife and McMurray’s decision to take on barred director Saul Loggenberg as an adviser has also raised eyebrows. 

Loggenberg, a South African national and former director of failed printer Clowes, was banned from being a UK company director for 11 years in 2013. The ban related to payments Loggenberg made to himself, instead of his creditors, when he was the sole director of electronics distribution firm Mocor. His ban expires in August 2024.

Responding to a Printweek query about this potential red flag back in May, McMurray said: “I understand your point about Saul; he was introduced to us via a mutual acquaintance, and we engaged him to undertake some business analysis on the group and its structuring. 

“We are aware of the ban but at no time did he have the ability to make financial or operation decisions. Equally, I feel that as a father of nine and having completed 10 years of an 11-year ban, affording him the opportunity to earn a living isn’t something that should hold us in a bad light.”

McMurray said the project Loggenberg was engaged in had uncovered the alleged stock issues at Futurama and “for that we are grateful”.

“As you are aware, the PFI Group has expanded rapidly over the last two years with a series of acquisitions across varying sectors of the industry to provide a unique, multi-faceted ‘one stop shop’ offering to our customer base. 

“Furthermore, the group has been undergoing a strategic restructuring since October 2022, to align individual com-panies into the three distinct sub-groups; PFI Print, PFI Signs & Graphics and PFI Retail, resulting in a portfolio of strongly managed businesses with independent financial controls,” he said at the time.

In August, McMurray said: “Following the personnel changes earlier in the year, I have now stepped back into the CEO role and will be leading the improvement programme currently being delivered by the new SLT [senior management team].

“Trading across the portfolio remains positive despite the head winds that the economy is currently experiencing, and we continue to monitor performance and ensure each of the group companies operates financially independent of each other while offering support and collaboration where opportunities allow.”

No further comment

At the time of writing, these plans appear to be in tatters. What is left now to form “three distinct sub-groups”?

Since August McMurray has not responded to Printweek’s requests for comment and/or explanation about what’s happening at the group, and in particular what’s happening at Works Manchester, where more than six months have passed since PFI missed a crucial payment deadline related to its £3.17m purchase of the operation. A Notice of Intention to Appoint Administrators against Works Manchester was filed in early December. 

One creditor left massively out of pocket by the insolvency of a PFI Group company commented: “The thing about Darren is he likes the Cheshire high life. He’s got the Lamborghini and he’s got the Bentley on the drive. 

“Unfortunately, a lot of people including me won’t be able to have a nice Christmas, because of PFI.” 

PFI buys

May 2015 GB Sign Solutions

June 2017 Sign Plus

September 2017 Lofthus Signs

June 2018 In2 Signs Graphics & Display

August 2019 Shades Graphics

November 2019 Mardan Products

April 2020 Futurama

October 2020 Signmaster ED

November 2020 Insignia Signs

January 2021 Creative Digital Images

August 2021 Jasmine

October 2021 Cestrian Imaging

January 2022 Kesslers and Proportion London

May 2022 Works Manchester

July 2022 Speedscreen

August 2022 Gardners

January 2023 Novum Graphics