MBO at The Specialist Works
Monday, August 20, 2018
Independent media agency The Specialist Works has been bought from founder Jim Lewcock in a management buyout (MBO) deal led by chief executive Martin Woolley and chief operating officer Parry Jones.
The deal, which was completed last Tuesday (14 August), sees the ownership of the agency transferring to Woolley and Jones – who were both promoted to their current positions 18 months ago, now majority shareholders, with the remaining shareholding split between the rest of the management team, and Lewcock and his family exiting the business.
Woolley told PrintWeek: “I’ve worked here for over 11 years, becoming managing director around five years ago, and worked really closely with Jim in building the business up.
“Our whole heritage and roots were in print media and print management. As the business became more complex, it started to suit me a little bit more than Jim, who is a real start-up guy – start-up projects are what he is going on to do.
“Somewhere in between five years and 18 months ago there was a plan for me to take over from Jim and we started the process at the back end of last year.”
The MBO was financed through existing funds and bank finance from Santander. Corporate finance advice came from Highstead Partners, legal advice from PDT Partners and tax advice from Wilkins Kennedy.
“Everyone we presented to as part of this process was very keen to work with us, which was lovely and demonstrates that we do provide a point of difference in the media industry at the moment. Santander just got it and worked really hard to get us a great deal,” said Woolley.
The Specialist Works has shown growth every year since it was established by Lewcock in 2003 and is forecasting turnover of £165m this year.
Recent new business wins include Photobox, 23andMe and Rocket League, joining a client roster including Ovo Energy, AutoTrader, Beagle Street and Boohoo.com.
“The first thing we want to do is consolidate, and the focus will be on organic growth, growing our team in strategically important areas and doing a really good job for clients. Then a little bit further down the line we’ll be thinking about potential acquisitions and partnerships because that’s worked really well for us in the past,” said Woolley, who emphasised the impact and growth potential of print for the company’s clients.
“Print really works – it’s in our bone marrow to look for real business effects rather than media KPIs. Things like sales increases or cost-per-customer are what we really try to focus on, as opposed to campaign reach or those kinds of things, which have a place, but they are media KPIs rather than business KPIs.
“We have clients in more mature sectors who are getting response rates of sometimes over 5% from inserts. I’ve seen similar kinds of things when we’ve looked into door drops and direct mail.
“And for a lot of clients who make most or all of their sales through websites, and for a lot of clients who want to go international, print media is even more effective for them.”
He added: “A lot of print media is delivered into the home, which is where people do their online shopping. We’re all mobile, but the amount of shopping that happens for holidays or homewares from mobile is very small compared to what’s done from the computer at home.”
The new management team are also offering a £2.5m loyalty bonus to staff, co-funded by the existing shareholders and the Lewcock family, with all non-directorial staff receiving an immediate cash bonus from an initial £250,000 pot, based on their seniority and length of service.
The remaining £2.25m will be released as and when the business hits financial milestones, Woolley said.
“The staff drive all of the success – we’ve got a really committed bunch of people working for us and we just wanted to be able to share the success of the company with them in a real way.”
Lewcock, who started the business in 2003 as The Insert House with the proceeds from the sale of a car – a ‘salesman of the year’ prize, said: “From a single desk on Brick Lane to over 200 desks from Beijing to LA, it’s been an epic journey.
“Many of us have grown up together at The Specialist Works. I’ll miss the folks dearly and look forward to watching the continued wondrous growth.”
Headquartered in Islington, London, The Specialist Works currently employs around 220 people and operates across more than 40 countries, with strategy, media and creative experts based in the UK, Ireland, Germany, the US and China.