GI Solutions sold in MBO
Friday, April 15, 2016
GI Solutions has been bought in an MBO deal led by chief executive Patrick Headley as the group looks to grow its data offering.
The MBO team consists of Headley, GI Red managing director Darren Crawford, GI Solutions managing director Alistair Ezzy, GI Solutions finance director Simon Lisser, GI Solutions executive chairman Robin Welch and GI Insight managing director Andy Wood.
The deal, which completed on 24 March, sees the management team take a controlling stake in the Leicester marketing services provider following the exit of private equity firm Grove Industries.
“The nice thing is that three of the Grove directors have come back and invested as individuals,” said Headley.
Previously Grove had a 60% controlling stake in the business. However, following the MBO the six-strong management team now have a 55% stake, with Headley the single largest shareholder from the team with around 12%.
As well as the main GI Solutions production operation, the deal includes data specialist GI Insight and creative agency GI Red. However, GI’s China outsourcing operation, SynYang, has been sold in a separate, simultaneous MBO to Paul Thomas.
“When we looked at the structure, we realised that while it was a good business, SynYang wasn’t really core, so when we led the MBO here at GI solutions Paul led a separate MBO at SynYang and everyone is happy,” said Headley.
As a result SynYang has moved out of GI’s Leicester site.
Following the disposal of SynYang, GI sales will drop from around £40m to nearer £32m.
The takeover has been in the planning since the summer of 2015, and was preceded by a restructure of the management team in January, which saw Headley take on the chief executive role.
“We did it this way because it gets everyone, internal and external stakeholders, used to the change before it happens. The biggest change will be for Robin, he’s always been massively involved in running this business, but he’s happy to let the management team come through,” said Headley.
Following the MBO, Welch, who will remain executive chairman and a shareholder, will work two days a week with the business.
One of Headley’s key objectives post-MBO is to grow the GI Insight business, which currently has sales of circa £3m.
“Over the next five years we want to at least treble the size of Insight and grow the rest organically. GI is all about generating incremental revenue growth for customers, and Insight is central to that,” he said.
The firm is also mulling a further investment in high-speed digital web technology, following the installation of its third HP PageWide Web Press T230 this month.
Headley said that further M&A activity, following the acquisition of web analytics business Cognesia in 2014, could also play a role in the business's five-year growth plan.
“If the right opportunity comes along, whether it be in data or a strategic acquisition, then we’ll certainly look at,” he said.
See PrintWeek's interview with Patrick Headley next week.