Adare chief hails "watershed" MBO deal
Thursday, April 16, 2015
Adare chief executive Robert Whiteside has described the £60m management buy-out at the business as “truly a watershed moment” for the group, which is back on the acquisition trail.
The secondary MBO was backed by Leeds-based private equity firm Endless LLP. Adare posted group sales up 6.7% to £170.8m last year on the back of strong growth in its international operations. Operating profits prior to an exceptional gain of £1.8m jumped 15.5% to £5.5m.
Whiteside said: “We had growth plans, and now we’ve got much more ambitious growth plans. The Endless team are local to us and they are a very active funder who keep their ear close to the ground. It was a natural coming together.
“We’ve done pretty well with the wind in our faces because of the economic conditions. Now we have the wind at our tail just think what we can achieve.”
Endless also owns Banner Managed Communication parent Office2Office, which it acquired last year in a £19m deal.
“There are no plans to bring the businesses together. They are standalone investments with no connections between the two businesses,” Whiteside stated.
Whiteside said Adare, which now has 60 locations in 50 countries, had “big plans” for further growth, including acquisitions.
“We have won a number of transformational contracts. I can’t say who they are because I’m not permitted to, but they are global contracts with a truly blue-chip client base,” he said.
Endless managing director Chris Clegg lauded Adare’s “industry-disruptive technology platform” and Whiteside said the group was using this platform to win major global marketing procurement deals.
“It could be one million brochures or one million baseball caps. In fact we recently ordered 4.7m polar bear toys. It’s about manufacturing, process, management information and delivery – it doesn’t matter what the product is, our system can handle it.”
Whiteside emphasised that print remained “core” to the Adare offering, and the firm is currently producing millions of voting packs and ballot papers for the upcoming General Election: “Print is actually growing hugely for us because we’re globalising. The future of print is all very positive for us, we are getting a bigger slice of a very big pie.”
HSBC provided acquisition finance for the deal and working capital facilities. Lloyds Banking Group had previously held a 45% stake after a debt-for-equity swap in 2012. It no longer has a stake in the business.
Whiteside and four of his fellow directors – chief financial officer Kevin Herbert; Barry Crich managing director of Adare, Steve Ueckermann the managing director of Adare International; Kalamazoo managing director Julian Coghlan; and Adare Advantage managing director David Mills – had co-invested alongside Endless and had taken a “significant” equity stake.
Whiteside said the group’s core debt was now around £22m.