Creating a new future for Britain’s unloved industries

Many successful companies struggle to find a buyer because they are too small or specialist for traditional investors. PHD offers a solution, says its Acquisitions Manager, Pete Horton

Andy Dodd, Peter Horton, Craig Richardson

Within Britain’s industrial sector there are thousands of companies whose job it is to produce the components we rely on in daily life. Wheels and castors, fixings and fasteners, sealants and gaskets, cables and cleaning fluids . . . they are hardly the most exciting products, but they are used by almost every sector in some form and have been for thousands of years.

These businesses are the backbone of the British economy, yet they are largely overlooked by traditional investors. They are not high-growth technology companies, nor do they have the potential to become blockbuster consumer brands that appeal to a mass market audience. They are successful, profitable businesses that produce essential items, occupy a strong market niche and are on a steady growth curve.

With global supply chains continually challenged by war, pandemics and political unrest, companies like this that produce industry staples will become increasingly important. We are starting to see a reshoring of manufacturing and distribution back to the UK because multinational companies can’t afford the consequential losses from not having parts on the production lines, and the global ‘just in time’ model has shown its flaws in recent years.

Because these businesses are often providing solutions instead of selling commodities, they are embedded within their supply chains. This provides longer-term sustainable growth, which is exciting, and means these businesses should be around for years to come. However, despite these obvious benefits, when companies like this do come up for sale – perhaps because the owner is approaching retirement – they often struggle to find a buyer.

A lot of the companies we see are founder-owned or family-owned, set up in the 70s or 80s and employing many people. They are often not quite big enough for private equity houses and unsuitable for a trade buyer either because the vendor wants to protect their legacy or they operate in a niche where there is no obvious acquirer.

PHD offers a solution because we enable the business to keep running autonomously while providing support from being part of a wider group. It can be a lonely place as a founder-owner, but being part of our group offers a safety net of other management teams to bounce ideas off and learn from best practices for the issues that business owners face daily, such as HR, IT, infrastructure, routes to market and so on.

Running a business on your own is a much more daunting experience as every pound spent is a pound out of your pocket, whereas being part of the PHD group, we work with business owners to give them the confidence to invest in the future.

Companies like Technikraft, Olympic Fixings, BIL Group, Hylomar and Automarine Cables are already part of the PHD Industrial Holdings portfolio, and we are looking for more to join us. By offering a genuine alternative home for companies like these, we are helping to support the future of the UK’s unloved industries.

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