Category Archives: Jim McColl

Acquisition Secrets Revealed – Jim McColl

Posted on by
Reply

Growth by acquisition can be exponential, exciting and financially rewarding. If you get it right. But in many cases the acquisition doesn’t work out, the acquiring company struggles to integrate the new company, and the new company fails to fit in.

Jim McColl

Jim McColl


So how do you make successful acquisitions? Who better to ask than Jim McColl of Clyde Blowers whose successful acquisition strategy over the past 10 years has seen the business develop into a truly global portfolio of 90 companies in 30 different countries, employing 6,000 people, with an annual turnover in excess of £1.35bn.

Murray Strachan chaired the evening. He summed up Jim’s key advice quite simply:
• Focus on what you’re good at, what you can add value to and/or leverage.
• Remember the best business to be in is the one you’re already in.
• Research competition, market/industry sectors and look for gaps, potential and to identify targets.
• Development and implementation of a 100-day plan is the key to integration and success.
• Motivate the management team, help them understand the vision and let them help in developing the storyboard.
• Be careful with the brand of the target, and/or eroding its inherent value.
• Always present an acquisition as a merger.

“Jim’s key approach came down to four factors, said Murray. “Big ambition, a “can do” attitude, understanding your markets and thinking globally.

“There were so many lessons and golden nuggets from Jim my arm hurt writing them all down. What a guy!”

For Amanda Boyle of Bloom VC the key lesson was that successful acquisitions focus on the return not the cost and the most valuable due diligence is carried out on operational issues by an internal team before professional services are engaged.

“Planning and ambition are important at every stage of building your business,” said Amanda. “It’s important to map and articulate these then share with everyone, every day… so that’s what I aim to do!”

She added: “Doing the right thing can be compatible with big ambition. A strong sense of personal values shines through Jim’s approach to negotiation.

The most memorable piece of advice that Tony Banks took away from the evening was that Scotland would flourish as an independent nation.

Tony, of Balhousie Care Group, added:” The highlights for me were tips to get your own team to do most of the operational diligence during an acquisition and then get the ‘expensive’ professionals to only provide confirmatory diligence.

“There will be no major changes in my business but I need to talk to Jim about raising funds and becoming a debt financier,” smiled Tony.

Attendee Thoughts and Key Tips
“Lots of practical advice and guidance, underpinned by focus, patience and sharp vision. What shone through were Jim’s priorities and values, and a very clear sense of self.”
“Target peoples dreams not just how much they want to be paid. Make that dream a reality!”
“Key tip for me – operational diligence before you bring in the expensive professionals to carry out the confirmatory diligence.”
“1. Get to know the firms first, just ‘drop in’ for a coffee whilst you’re in the area – so really get to understand the business from afar 2. Let them think you’re merging 3. Keep staff informed & updated with your goals 4. Do diligence internally where possible.”
“My tips from the evening – Market analysis – get to really know your market and competitors – Key staff – play to their dreams when looking to incentivise – Story board – set out clearly the vision for all to see and buy into – Can do attitude is essential – Look at what you are good at – best business to be in is the one you’re in!”

Jim also recommended a number of his favourite books, his personal top ten list is here. Better get them on your Santa list!

1. Think and Grow Rich – by Napoleon Hill
2. Success Through A Positive Mental Attitude – by W. Clement Stone
3. You’ll See It When You Believe It – by Wayne W. Dyer
4. You Can If You Think You Can – by Norman Vincent Peale
5. Born to Success – by Colin Turner
6. Are You Positive? – by Richard Gaylord Briley
7. The Secret – by Rhonda Byrne
8. A Passion for Success – by Kazuo Inamori
9. Ask And It Is Given – by Esther and Jerry Hicks
10. Abundance – The Future Is Better Than You Think – by Peter H. Diamandis

Biographies “here”

Cut red-tape to revive our entrepreneurial spirits – Peter Grant in The Scotsman

Posted on by
1

This is an opinion piece written by former Exchange director Peter Grant, of Grant Property, for The Scotsman. Published 31May’12

Scotland punches above its weight in entrepreneurs. From Jim McColl and Sir Bill Gammell to Ann Gloag and Audrey Baxter, they all have one thing in common – an indomitable can-do attitude.

Unfortunately, all too often I see opportunities where Scottish entrepreneurial spirit is stifled by red tape – not to mention the ongoing unwillingness of the banks to lend to SMEs with great ideas.

Today I’ve got the unique opportunity of addressing the chief executives of Scotland’s 32 local authorities at the Solace Scotland conference to share my ideas on how the public sector can play its part in nurturing business, helping create jobs and stimulating regeneration.

As the founder and CEO of one of the country’s biggest managers of rented accommodation, I’ve had more than a few interesting exchanges with local government on red tape.

Some of the rules facing rented accommodation are incomprehensible. Bathrooms are apparently a fire hazard; three bedroom flats need bigger bedrooms than two beds; newly renovated properties often can’t be rented for up to 12 months; and the craziest of all, four bedroom properties can only be rented to two people. In truth it’s simpler for us to do business in England where regulation seems more business friendly.

But we are a proud Scottish company based in Scotland, employing more than 150 people in 12 cities across the UK. We are responsible for buying, renovating and renting 2000 properties to key workers, unemployed and professional people. That represents around £400 million of private investment since my wife Colette and I set up the business in 1997.

We want to keep that investment coming into Scotland, to keep creating jobs and stimulate the economy. But that can only happen if the public sector starts to listen to Scotland’s “can-do” entrepreneurs, big and small. That means one thing: simplify regulations for all to nurture business and jobs.

In fact I’ll lay down a challenge to council chief executives to spend a day shadowing business, and see for themselves the daily regulations that curb that entrepreneurial spirit.

• Peter Grant is CEO of Grant Property and a member of the Entrepreneurial Exchange.

Video – investing in your business

Posted on by
Reply

Investing in your business isn’t necessarily about spending money, in fact, investing in your business without spending money is clearly the preferable option.
So how do you invest in your business to ensure scalability and a happy customer and employee base? Exchange members share their thoughts on the most important investment they have made in their businesses.

Brian Williamson, Tiger Eye – time to network, share experiences and learn
Peter Grant, Grant Management – get people to work at the top of their ability
Anne Marie Hamill, Escape Recruitment – always invest in people
Murray Strachan, Strachan Partners – focus, communication and the “butterfly scenario”
Collette Grant, Grant Management – invest in your values

How Jim McColl turned £45m into £750m in four years

Posted on by
Reply

Here is a great piece about Jim McColl, former Entrepreneurial Exchange Chairman and Entrepreneur of the Year, written by Louise Armitstead in The Telegraph of Friday 16 September 2011.

He may not look it a broad-shouldered, bullet-headed Glaswegian but Jim McColl is the coalition Government’s poster boy.

The son of a butcher and a school dinner lady, McColl has just sold ClydeUnion Pumps for £750m having bought it for £45m just four years ago.

While many businessmen have spent the years since 2007 wearing tin hats and squirrelling away spare cash under the mattress, McColl has taken on a dejected and rusty “old economy” company and transformed it.

Staff numbers have soared almost as fast as sales and rather than make way for yet another housing estate the pump factory was about to be sold to developers Glasgow has a shiny industry leader.

The billionaire Scot, who is already in process of his next multi-million-pound deal, seems part-machine himself. The only thing that appears to irritate him is other people moaning about the recession.

“More people could do it if they just dropped the negativity and did some proper analysis of their sectors. Just see if the recession is really going to impact you, because often there’s no reason why it should,” he said.

“A friend said to me recently, ‘It’s all right for you, you can dream but I have to live with reality’. What’s that? Reality is only someone else’s borders and limits. Just get on with it.”

He is undoubtedly no-nonsense but he has succumbed to a few gentler trappings of the super-rich. He has a collection of classic cars, has just returned from watching David Beckham playing for LA Galaxy and counts among his pals Brian Souter, the boss of Stagecoach, and Sir Tom Farmer, the founder of Kwikfit.

And he’s non-dom, based in Monaco. Like other tax exiles, he has no compunction in trying to influence Government policy to get behind British industry. “You can’t have an economy based on financial services and property,” he said.

McColl says that on a trade visit to China with David Cameron, he told the Prime Minister of the problems of getting trade finance. Within weeks of returning home, UKTI got in touch. “They said they’d been given three months by No 10 to get the fund up and running. It took them six months, but we were the first to use it for a £15m order from China. I find the Coalition is very serious about helping where it can.”

Now he’s got a taste for it, McColl is on to his next mission to get the Government to back an industrial investment bank.

“Whatever the banks say, credit is still very tight for SMEs. These companies need proper support and I think a dedicated industry bank that could specifically help small companies would be great. I’m happy to support the idea if I can.”

Brought up in the village of Carmunnock, near Glasgow, McColl went to the local primary school, where there were only seven people in his class, then on to Rutherglen Academy. He left at 16 ready to work.

“It was the time of severe industrial decline in Glasgow, engineering companies were closing down,” he said.

Even so, the young McColl set his sights on engineering, mostly because he had a passion for fast cars. “I loved Formula 1 and Jackie Stewart was the man of the moment I couldn’t wait to get my copy of MotorSport each month. Years later I was able to sponsor Jackie Stewart’s racing team Paul Stewart. But that was a long way away then.”

He joined Weir Group as an apprentice, it was “what everyone else was doing,” he said. Driven by dreams of owning his own car, McColl earned extra money at a local garage, fixing tyres and selling petrol. He completed four years as an apprentice at Weir Group and spent another two years there, but was quickly frustrated. He said: “I came to the realisation that I was going to do this for the rest of my life unless I got better qualified. I noticed the people getting paid the most understood the financial side of business.”

McColl launched himself into studying. Through a series of night schools, part-time courses and eventually full-time university courses, he clocked up an extraordinary raft of qualifications, from an ONC in mechanical engineering to a Masters in accounting and finance.

He said: “I guess I had a slight chip about leaving school so early. I was determined to be the smartest guy at the table.”

He was still working in engineering in Glasgow but by his late 20s his now-impressive CV caught the attention of headhunters looking for industry people with financial qualifications. He was hired by Coopers & Lybrand the forerunner of PricewaterhouseCoopers as a company doctor.

He said: “My job was to go into struggling companies, mostly industrial ones, and become a temporary chief executive. It was a good use of all my qualifications and experience.”

But within two years, McColl recognised the difference between the amount of money he was earning for his employer and his own paycheck. He decided to do the same thing, by himself.

The first company he bought was a small engineering firm called Clyde Blowers for £3m. It was the smallest of eight competitors in its markets. Within a few years, through a series of acquisitions, it became the biggest.

The next step was setting up a private equity-style investment fund with several companies going through his books at the same time. Clyde Blowers Capital was formed in partnership with SCF, a US private equity firm.

McColl did several deals before 2007 when he heard that Weir Pumps was struggling and being sold to a Swiss firm. “Obviously I knew the company well,” he said: “I was immediately asked, is this your head or your heart making the decision?”

He insists it was his head. “I just looked at it and thought, this is a great company with a fantastic heritage and one-time leading products, why isn’t it doing better? It hadn’t maintained the product side but that’s easy to fix if you hire the right people.”

A key change has been to plant offices and factories around the world rather than trying to ship all the orders from Glasgow.

ClydeUnion now has eight manufacturing sites and 25 service centres around the world. He also overhauled the structure and hired aggressively.

At the beginning of 2009, the company was pitching for £50m of business a month; by the end of the year this figure had grown to £250m per month and conversion rate stayed the same.

“It’s all about understanding your company and where it fits into its market,” he says. “If you take the time to do the proper analysis, everything is easy.”