BusinessBusiness RecoveryAwards 2003: Turnaround Team

Awards 2003: Turnaround Team

Kelso Place Asset Management has shown it can consistently save the day, picking up the Accountancy Age Award for Turnaround Team of the Year.

The London-based private equity fund manager focuses specifically on acquiring controlling shareholdings in distressed businesses.

Our judges found that time and again Kelso had ‘delivered’ on its mission, saving jobs in the process.

For example, Kelso recently purchased telecom business Sepura out of administration saving 76 jobs.

Although Sepura’s primary product was only at the prototype stage and the business had never previously made a profit, Kelso managed to generate an operating profit of £0.8m in the first year of operations, and a profit of £8.2m is budgeted in the current year.

Graham Matthews, managing director for Kelso, says: ‘Following the acquisition of the business, I was very impressed by Kelso Place’s desire to roll up its sleeves and work in a hands-on capacity helping to stabilise the business.’

Matthews believes the secret to success was Kelso driving cultural change within the business.

‘Cultural changes have made the business more commercial both internally and in its approach to the market,’ explains Matthews.

Changes were made to the sales team structure, development of a global marketing strategy, introducing new accounting and reporting procedures, improving financial modelling and prioritising research and development.

Finbarr O’Connell, partner for KPMG, says: ‘Kelso Place undertook a rapid due diligence exercise and was the only party to submit an offer for the handset business in the timescale available. Due to the very tight trading situation a condition of the sale was for Kelso to fund the salaries of the 76 employees that worked in the handset business on a non-refundable basis during the negotiations phase.

‘If Kelso Place had not purchased the handsets business then I would have had no option other than to close the business and make all staff redundant,’ he adds.

Kelso has shown that it is able to transfer its expertise to a variety of business types.

Another success this year was its acquisition from administration of recruitment company Nigel Lynn Associates (NLA).

NLA was founded in 1989, and originally operated from a single office in Basingstoke. The business expanded organically to become the UK’s largest independent accountancy recruitment consultancy, with 17 offices throughout the UK.

Facing strong competition from larger listed companies, NLA sought to offer a more personal service.

Upon taking control of NLA, Kelso Place stressed its commitment to providing staff with the support and infrastructure that would enable them to maximise their own potential. Following consultation with employees, a new commission structure was introduced that is designed to offer greater incentive to successful consultants.

Since the acquisition NLA has traded ahead of budget and Kelso has driven an aggressive growth strategy. As a result, 130 jobs have been saved and new jobs are being created.

A key measure was restructuring the balance sheet of the business and reducing operating costs to a level commensurate with revenues.

The benefits of turnaround are not just restricted to NLA and Kelso.

One key supplier to Nigel Lynn said: ‘NLA agreed to restructure payments to us so that we could receive cash earlier. This has provided the opportunity to recoup some of the losses that we had suffered on the insolvency of the old company.’

OTHER SHORTLISTED CANDIDATES:

  • KPMG, Receivership of the Albert Fisher food group
  • Kroll, Budget Rent A Car International
  • PricewaterhouseCoopers, The BRS Team

  • Primus Telecommunications, Primus.

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