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Selling a business doesn’t mean the end

By John Anderson - Posted on 22 September 2016

The Scottish Business Insider Deals & Dealmakers Awards took place this month. Strathclyde Business School's John Anderson was one of the judges and here he looks at the benefits that can be found when one company acquires another.

I recently had the pleasure of chairing the judging panel of the Scottish Business Insider Deals & Dealmakers Awards, the long standing awards that acknowledge and reward excellence in dealmaking by ambitious businesses and the trusted advisers who help steer them on their growth journey. It was a fascinating process and there was a fantastic line-up of finalists and very worthy winners on the night – which saw Macduff Shellfish taking the top prize of Deal of the Year as well as Sale of the Year.

We hear all too often the negatives when a business is sold but my own experience, and our research here at Strathclyde Business School, shows that there can be many positive outcomes from a sale. Investment capital that is released can be recycled into new growth opportunities; the experience and wealth created by the founders and management teams can be leveraged to start or back new and emerging growth companies, and with the right backing the original business can realise further growth and continue to generate prosperity for its employees and wider community.

Peterhead-based Macduff, which supplies scallops, langoustine, whelk and crab, was acquired by a Canadian seafood firm Clearwater Seafoods last October in a deal worth £98.4m from the Beaton family and Change Capital Partners, the specialist pan-European private equity fund.

At the time of the deal Macduff had factories in Mintlaw, Stornoway and Exeter, owned and operated 14 mid-shore scallop harvesting vessels from its Dumfries facility and employed approximately 400 people at the seasonal peak.

The deal brought Macduff access to new markets, investment and opportunities for growth. For Clearwater, the acquisition of Macduff provided access to market leading supply in key markets and channels along with a well-established brand, UK-based harvesting and processing expertise, a strong management team and a talented workforce.

Under the deal Macduff retained its name and now operates as a wholly-owned subsidiary of Clearwater, sharing resources and best practice between the businesses. Macduff’s Chairman Euan Beaton is now President of Macduff and Managing Director Roy Cunningham assumed the role of Vice President.

At the time of the deal Euan Beaton, Chairman of Macduff Shellfish, said, “Having reached our goal of building a £52m business, we had one suitor in mind which shares our vision and values to enable us to accelerate our growth on a global scale. With a similar vertically integrated business model, sustainability at its heart, sound employee practices and strong relationships with fishermen but operating on a much bigger scale, Clearwater is an ideal fit for Macduff.

“This deal is great news for our operations in the UK, bringing investment and access to new markets within an extremely successful and respected business. It provides learning and development opportunities for our staff as we share best practice with Clearwater and it gives fishermen access to more markets.”

Ian Smith, CEO of Clearwater, was clear that the acquisition of Macduff would bring together two of the world’s leading and fastest growing wild shellfish harvesters. The transaction would allow Clearwater to integrate its vessel management and sustainable harvesting practices, innovative processing technologies along with its global sales, marketing and distribution footprint into Macduff; a company he acknowledged already possessed a talented management team, excellent resource assets and a strong presence in Europe, the world’s largest and most valuable seafood market.

“A great deal in a very important sector for Scotland,” was how the judging panel summed up the sale which was seen as a positive inward investment story for Scotland. “The shareholders may have changed but this is a business which has very much remained in Scotland,” commented one of the judges. This particular sale is definitely not the end…

The Dealmaker of the Year award went to John Waddell who stepped down as CEO of Archangel Investors during the year and who recently joined the Hunter Centre for Entrepreneurship as Visiting Professor.

Full coverage of the awards can be found on the Scottish Business Insider Deals & Dealmakers Awards website.

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