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How I led Rand Group buyout


Birse veteran Jonathan Wells had a dramatic change of career when he led the management buyout of private construction group UCS Civils, now Rand Group, in 2003. Steve Menary asks him how the first year has been

WHEN you're ejected from your job, most people would either dissolve into bitter recriminations or set out to show their employer just what they are missing.

Jonathan Wells is doing the latter.

After nearly two decades at Birse, he left in fairly acrimonious circumstances in 2001 when he was unable to work with his then boss, John Elders.

Mr Wells explains: 'It's fair to say there was a bit of tension between me and the guy I worked for.We finally agreed that we couldn't work together.As he was the boss, I had to go.'

'I was offered a sideways move but the job I wanted to do was managing director of Birse Civils. If I couldn't do that, then what was the point in staying?'

His departure was a sad end to a long career at Birse, where he rose from a sub agent to a main board director in charge of the firm's successful civils operation.

When he quit, Mr Wells first called his wife to say he was jobless, then he opened a bottle of champagne.

This shows his state of mind at the time, but he bears no animosity to the firm now - particularly as Mr Elders followed him out of the door just six months later.

And Mr Wells' exit turned out to be the catalyst for a new phase in his career that wouldn't have happened otherwise.

'If I hadn't had a kick from Birse, then a phone call out of the blue, I might still be there, ' he says, ruefully.

It was a phone call that came after a six-week tour of Europe with his wife and children and some work with York-based civils subbie Hewlett that 're-energised' him.

On the other end of the line were the owners of UCS, a private construction group from Mr Wells' native Lincolnshire.

UCS was set up in 1973 as a civils subbie, then moved into main contracting, then branched out into road planing. In the late 1990s, UCS acquired Linpave after the Lincolnshire-based building contractor had got into trouble on a couple of bad jobs.

Linpave was solvent but UCS's owners were essentially civils subcontractors and struggling to integrate a very different business into their own.

Mr Wells was asked to get the enlarged operation into the right shape for a sale.He was also to be given an option to make his own bid for the business.

He explains: 'The owners had tried to organise a management buyout with the existing second tier management but it didn't work out.The problem was that they were still trying to run the business like a small local subbie.

'But it would have been madness for me to go in and add value to someone else's company then go back and buy my own goodwill, so I went in on the condition that we kicked the process off straight away.'

He purposely avoided getting tied up with venture capitalists and enlisted the backing of Yorkshire Bank.This helped Mr Wells and the firm's existing finance director, Mark Eustace, seal the acquisition of the group in May 2003 in a deal that valued the business at around £8 million.

Mr Wells, now chief executive, re-named the group Rand after the village where UCS is based, but is keeping the trading names.

The biggest operation at Rand is the core UCS Civils business, with a £16 million turnover, which holds the world record for building a McDonald's restaurant in the quickest time.

The next largest subsidiary is Linpave, which has been going since 1983 and should turn over around £15 million.

Rand also has a £3 million turnover plant operation and the £8.5 million turnover National Road Planing (NRP) business.

NRP, which was set up in 1973, has been the group's most recent focus of expansion, with Rand buying Associated Asphalt's planing business for an undisclosed fee in June this year.

NRP is already one of the UK's biggest planing outfits and this acquisition could take the turnover from £8.5 million up to around £12 million this year.

As a national firm, NRP has offices at Newton Abbot in Devon, Bullington and Henley-on-Thames, but planing is a specialised market and NRP already has a dominant position.

Instead, Mr Wells wants to expand through limited regional expansion and he is looking for opportunities to expand into neighbouring counties Nottinghamshire and Derbyshire.

'We've got a 10-year plan to have offices in the Midlands, the north-west and the north-east, ' explains Mr Wells, who lives in Harrogate.

'We've looked at a couple of geographic acquisitions in civils but I don't want to go further south than Northamptonshire.'

Overall, Rand works on small civils jobs worth around just £100,000 up to jobs as large as £10 million.

Mr Wells is expecting turnover in his first year to be around £43 million and he hopes that workload will hit £100 million after his first 10 years in charge.

Having endured endless meetings during his time at Birse, he is very keen to take a different approach to how things are done at his own business.

Every month, a group of staff from board level to the sites at each of Rand's businesses get together in workshops to see if their business is on course to meet 'success criteria' that have been set at earlier meetings.

The staff all then go back to their own divisions to disseminate this information to their colleagues.

'The workshops are dead simple and cut down on an awful lot of paperwork, ' says Mr Wells.'Each month, we look at what we are going to produce rather than what we are going to do.There are a lot of people who can do a lot without achieving anything and I don't want that.'

Mr Wells has always known that being in construction was what he wanted to do.

'There was never any question over whether I'd go into construction, ' says Mr Wells, who graduated in 1974 from Loughborough University with a civil engineering degree.'I didn't have any family connections but I had a Meccano set when I was young and there were a lot of iconic buildings going up, like the Post Office Tower, that I was fascinated with.

'Now I'm on a bit of a mission to try to create something that's a bit different from the run-of-the-mill contractor.

'The mission is to grow the business to be small but perfectly formed: we want to be the best of our kind in our part of the country.And our philosophy is that we'll carry on doing as much of the work as we can ourselves.'

This combination of main and sub-contracting will, to use Mr Wells' own words, be Rand's 'unique selling point.'

With its 400 staff, Rand has a big workforce, incorporating design, training and health and safety divisions.

Mr Wells does concede that as Rand grows, the company will need to use more subcontractors, but he wants to keep as much work in-house as possible.

He explains: 'That policy may limit our growth but I love being able to look a client in the eye and say to them, 'I can meet your requirements'.And I can say that a lot more confidently when I know I'm relying on my own team than I could if I was someone who was using a lot of sub-contractors.'