Yorkshire
The good place
“Yorkshire has always been a thriving place to do business,” states Mark Buttler, partner of Total Capital Partners (TCP).
Buttler’s affection and positivity for the region has kept him based in Leeds for almost 27 years as an adviser and investor. “I’ve never felt the desire to leave Yorkshire when I was an adviser or as an investor. That is mainly due to the people. If you want to be active in the midmarket then you need a good network of people who feed off each other and complement each other – Leeds has always had that.”
Buttler points to the region’s bustling corporate finance community as another key attraction: “They make our work happen – you need that support and those teams.”
All of this feeds into Yorkshire’s business environment. Says Buttler: “Numerous national and international businesses have come out of the region, allowing for various M&A events along the journey. There are lots of opportunities for M&A in general and therefore for private equity. I’ve always felt it’s a good place to do what we do.”
Indeed, Yorkshire’s business landscape has a rich heritage. Famous for its manufacturing and coal capabilities back in the 1960s, the region now boasts its prowess in more modern sectors including business services, healthcare and technology. “Leeds really punches above its weight in these areas. And in niche manufacturing; there are lots of businesses producing interesting products,” observes Buttler.
He also points to West Yorkshire’s famous textiles output. “A lot of that went offshore but niche/high-quality areas have thrived.
For example, as well as retaining its historical manufacturing presence in Castleford in Yorkshire, Burberry has moved all of its shared service teams from finance, HR and procurement, as well as some customer service and IT roles, into Leeds.”
However, it is TCP’s investment in logistics business Walkers Transport that has made it onto our list. Following successful growth, the company’s founder was seeking to step back from the business. Having recruited a successor, an investment partner was needed to support the company’s next chapter.
“Management teams have been tested again and again in recent years. The resilient ones have learnt so much and gained so much experience.”
Derek Neil, Head of Transaction Services, BDO
“It was a classic management buyout,” says Buttler. “We were attracted to the company because the management team clearly had the right skills to grow the business. The logistics sector isn’t renowned for being highly sophisticated in terms of sales and marketing; it’s made up of a lot of family-owned businesses. But Walkers has a really good sales engine with scope to drive more. The business was also unusually focused on service quality rather than price – it wanted to win businesses on the quality of its service.”
According to Buttler, Walkers had also developed its IT systems and had clear plans on how to improve its tech further, which has led it to be a technology leader in the sector. “That was hugely important for its growth over recent years, for example in driving operational efficiencies, and customers really value the ability to interact with the company’s portal to track their goods. That really sets it apart from its competitors.”
Yorkshire has always been a thriving place to do business
Following the investment, TCP supported an add-on acquisition and worked with Walkers to identify gaps in the management team and secure the necessary talent. The focus on the company’s employees has been a major feature of this investment, given the sector in which it operates. “There were huge shortages in drivers last year due to various factors and the industry suffered because it led to massive wage inflation. For most companies in this sector, the biggest challenge was retaining drivers. Walkers responded more creatively by offering things like reduced working hours and improving conditions. That issue has gone away now. Walkers is a business that people like working for; it looks after its people,” says Buttler.
Another of the top-performing companies is Cairngorm Capital-backed Sentry Fire Safety Group. A manufacturer of compliant fire safety doors for the social housing, public sector, commercial and residential markets, Sentry received backing in early 2019 as the family owners Gordon and Carolyn Yates stepped back from the business.
Given the company’s position in a highly regulated market, it attracted a good deal of attention from private equity investors. “But we found the best fit with Cairngorm,” says Sentry CEO Ty Aziz. “They had a good track record of investing in businesses like ours as well as other companies based in South Yorkshire. We liked the strength and depth they could bring to the business; they were enthusiastic about what we do and wanted to support our growth.”
What is striking about Sentry is its ‘family feel’ culture, which is clear right the way through the business and has been carefully maintained despite the family owners stepping back. CEO Aziz has worked at Sentry for more than 25 years, having started out as a bench joiner. His deep knowledge of every facet of the business is highly prized by Cairngorm.
Says Fiona Perrin, non-executive director of Sentry: “The ambitions we had for the company were established in Ty’s capabilities. I’ve never met a CEO more determined to grow a company but while maintaining its culture, margins and standards.”
During the past couple of years, despite the obvious disruption brought about by Covid, Sentry has grown impressively, with headcount soaring from just 28 at the time of the deal to well over 200 today. “We’ve multiskilled every area of the business,” says Aziz. “We have increased the strength and depth of our board and right the way through the company, while maintaining that family ethos.”
Sentry has been able to grow its headcount so quickly thanks to several factors. One of the company’s sprayers, Colin, is a good example of how. “I’ve worked with some of these people for over 20 years. One of them, Colin, is 69. He says he is going to retire every year but he never does. He mainly provides training now. There are lots of people like Colin who have grown through the company who we provide training to. We invest in the people, put them on courses and keep investing in them,” says Aziz.
We have increased the strength and depth of our board and right the way through the company, while maintaining that family ethos
That people-centric focus has led to numerous knock-on effects in the local Yorkshire community. “Sentry has a great reputation locally as an employer. People refer people. And the culture it has maintained is really important for those referrals.” explains Perrin. “There is a great track record of people moving up through the company, which then means there is a skilled workforce available.”
“We have also maintained a lot of our supply chain, so our growth has supported their growth,” says Aziz. “We’ve even kept the same accountants that the business has always used. That sort of loyalty is very much part of our culture.”
A large part of Sentry’s growth comes from the acquisition of E & S W Knowles in Birmingham. The specialist timber door manufacturer was clearly a perfect fit, having also been a family-run business. Beyond the acquisition, Cairngorm has also supported Sentry’s growth by professionalising a lot of its systems, providing substantial investment in its manufacturing facilities and expanding its customer base.
The company is now well positioned to take advantage of further growth coming from the Fire Safety Act. “Having increased our headcount, we are well prepared for the Fire Safety Act, which means a lot of our customers will be replacing their door stock. We’re in a great position to respond to that demand,” says Aziz.
Both Walkers and Sentry are examples of businesses that have never wavered on their commitment to their team members. Putting their people first has resulted in impressive retention rates, especially as both of these organisations operate in sectors that have struggled with attracting and retaining talent. That people-first focus has also positively impacted its surrounding communities, whether by providing more job opportunities or supporting local businesses. Both companies show how finding the right partnership can make something good, great.
“Buy-and-build will continue to be a key value creation strategy, especially when it comes to international expansion, but that integration piece is so important.”
Sarah Ziegler, Head of Private Equity Coverage, BDO
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