Consolidation on agenda after Ferschl Group MBO

Apr 23 2008 by Peter McCusker, The Journal

A NEW era is dawning for a manufacturing company after its managing director and three senior staff completed a successful management buy-out from the owner and his wife.

Ferschl Group md Paul Jordan now owns 60% of the North East company after leading a successful buy-out of the business from previous owner Jim O’Neill and his wife Patricia.

Mr Jordan, who used to sell materials to Ferschl, was hired as a salesman by Mr O’Neill, shortly after they played in competitive squash matches in 1983. Mr Jordan was made managing director in January last year and Mr O’Neill sold the business to him and his colleagues just before the changes to capital gains tax last month, saving the owners a large sum in tax.

The hydraulic manufacturing company, which has five divisions and 110 employees, is now owned by Mr Jordan, fellow director Peter Sermon and divisional bosses Brian Tones and Jim Robinson.

Mr Jordan, 48, said they would be focusing on securing the long-term future of the business.

He added: “We are not comfortable with massive growth. It’s alien to the business, so we will be undertaking a period of consolidation.

“In the past, the company has grown through acquisitions and that is something we will look at.

“As a team we are excited at the prospect of building on the excellent foundations already established.”

Mr Jordan believes a modest turn- over increase of 5% in the coming year will set it in good stead for further developments.

The Ferschl Group was founded in 1971 by County Durham entrepreneur Bill Martin, now aged 98, at the age of 61.

The company, which has facilities in the Team Valley, Ashington, Peterlee and Middlesbrough, supplies hydraulic hosing, hose manipulation and electroplating services to a broad industrial customer base across the UK.

Mr Jordan said: “I was working as a salesman, selling to Ferschl when I played Jim (O’Neill) in a squash match at Cramlington. It wasn’t long after that he offered me a job and things have progressed since then.

“He has been looking to sell the business for a while, although the changes to the capital gains tax meant things progressed a bit more quickly.”

The deal was facilitated by accountants UNW, Crutes law firm and The Royal Bank of Scotland.

Mr Jordan said: “Crutes, UNW and RBS have been a pleasure to work with during this process.

“They have been a stabilising influence throughout, and their professionalism and knowledge has been invaluable.”