Commercial culture is key says NorthEdge partner John Rastrick
“When we look at a business, it’s all about the chemistry, the commercial culture that’s there, and the potential to achieve the management team’s ambitions,” said John Rastrick, NorthEdge Capital partner and head of Yorkshire and the North East.
After completing five deals in the local market within the last 12 months, John is rightfully proud of the headway the private equity firm has made in the region.
Rastrick, a qualified lawyer, joined NorthEdge as a partner in September 2015 having been involved in mid-market private equity investments for over 15 years. He has a background in the North, having spent eight years at Phoenix Equity Partners where he established and led their Northern operations, and worked at 3i plc in Leeds and Manchester prior to that.
John leads a team at the NorthEdge Leeds office that now includes investment director Tom Rowley, investment managers James Marshall, Nicola McQuaid, as well as NorthEdge founding partner Andy Ball, and Catherine Britten, office manager – who keeps the team in check.
Over the past year, the NorthEdge Leeds team have shown they are on top of trends, investing in the Sunderland-based naturally-flavoured spring water soft drinks company, £13.5m turnover Clearly Drinks Group, which employs more than 70 people.
“We’re generalists and sector agnostic,” said John. “What we really look for is a strong management-orientated approach. We want to work with incumbent teams to drive further growth. We’re very focused on investing in local businesses and like-minded people.”
Another high-profile deal was with foreign currency exchange and pawnbroking business Ramsdens, based in Middlesbrough, with NorthEdge making a partial exit from the business in February 2017 through an IPO, having backed an MBO at the business in September 2014. Ramsdens currently has a market cap of around £35m.
More recently, NorthEdge completed the sale of the £52m-turnover, Teesside-based chemicals manufacturer Fine Industries to Chinese life sciences business Lianhetech in April 2017. This exit was swiftly followed by the sale of Utiligroup to Accel KKR for £100m, also in April 2017. The exit generated a 5.7x money multiple for NorthEdge in less than 3 years.
“We are pleased to be building some momentum locally in terms of investments and job creation,” John said.
A commitment to regional business has been a focal point in the development of NorthEdge in Yorkshire and the North East.
“When we look at a business, it’s all about the chemistry, the commercial culture that’s there. The priority across our three offices is to be close to local decision makers. Locality is really important to us. We’re proud of the businesses we work with and have become strong partners.”
“To us, it’s important they succeed,” said Rastrick, “not just for profits but because they’re on our doorstep.”
One of the deals John is most proud of recently is the sale of Help-Link, a formerly struggling business and the UK’s largest independent boiler installation company. After its market collapsed, the company reported losses of £15.3m, but with a load of support from NorthEdge, in particular James Marshall who stuck with the business for two and a half years whilst CEO Richard Harrison pulled it back. Harrison praised NorthEdge’s “unwavering” support in a tricky time for the business.
The deal for the company with HomeServe completed earlier this month, and valued the company at £22.7m.
“We have worked really hard and committed a lot of resource and capital here to get a great result for all, management, the employees, the vendors and stakeholders,” said John.
“I know that many business owners are put off from bringing in third party shareholders particularly when decisions are made remotely by disconnected investment committees.
“The risk is that these decisions can adversely affect a company’s ability to act swiftly and make the best commercial business decisions. This is why we have local decision makers in each office who sit on the board of our investee companies.”
This attitude seems to be holding NorthEdge in good stead and it will no doubt go from strength to strength.