Pensord undergoes second MBO as chief exec Jones heads for exit
Wednesday, July 14, 2010
Pensord chief executive Tony Jones has sold the magazine printer to an MBO team led by commercial director Darren Coxon and operations director Karl Gater.
The deal, which closed last week (9 July), marks the second MBO in seven years for Pensord, after Jones' buyout of previous owners Allen, McGuire & Partners in 2003.
Jones, who will leave the business with financial director and business partner Graham Lambert, said it was always his plan to depart within a fixed period.
"When we did the MBO [in 2003], it was the only way to be able to guarantee the security of the business, safeguard the jobs and get the investment in place," he said.
"But from day one, one of our priorities was building an exit strategy and I'm delighted that's materialised in the way we envisaged."
Coxon, who is now managing director of the Welsh magazine printer, said the latest MBO was financed through an existing invoice discounting facility, personal credit lines, and an extension to the company's mortgage.
Jones explained that the difference between the current acquisition and the 2003 deal at the Blackwood-based group, was that his had necessitated a much higher gearing of the business.
"The structure of our MBO in 2003 was geared to the hilt," he said. "We leveraged everything that moved, because it was a loss-making business and we were trying to sell a plan that involved immediately putting £2m of investment into a business that had lost money forever, that had low morale, was massively underinvested, with clearly a lot to do."
Following the success of Jones' turnaround plan, the company was able to pay down its debt "remarkably quickly", while doubling the size of the business, giving it headroom for a second leveraged buyout, with a much lower gearing, in 2010.
Coxon said he planned to continue investing at Pensord, with another eight-colour press scheduled for early 2011, together with new CTP and bindery equipment.
He added: "I'm really proud to have been part of the management team that helped shape the development of Pensord over the past seven years and hugely excited to take Pensord on to its next stage of evolution.
"It will be very much business as usual, based on Tony's legacy and the values that have underpinned everything we've been doing here since the MBO in 2003.
"The business isn't broke – we've put on a record performance so far this year, with our best-ever sales and profit for the first six months. Our plan is to continue to do what we do well and do more of it."
Both Coxon and Jones praised the employees at the 142-staff business, who Jones claimed were the secret to the company's success.
"The reason why I had the faith to do what I did in putting everything on the line here was really because of the people," he said. "The kit is a bit important but it really is about the people - if you can get them behind you and you treat them with respect, then it's amazing what you can achieve.
"I think the industry needs to get its head out of the idea that it's all about technology and kit and so on and realise that it's entirely about people, [because] you rely on those people to get the best out of all of the technology and the kit."
Jones, who is due to leave Pensord in September following a handover period, said he would now look for a new challenge, possibly in partnership with Lambert. He added that he was not sure if he would remain in print.