14.09.2012

IPS and APS to merge

UK based Independent Parts and Service (IPS) and Access Platform Sales (APS) are to merge into what will be the UK’s largest powered access distributor.

IPS is based in Telford in the West Midlands, while APS is located in the East Midlands in Huntingdon with a full service branch in Scotland.

The deal, which was announced to employees this morning, does not include the Australian operations of IPS which have at the same time are subject to a Management Buy Out led by Rick Mustillo. It does though include IPS France, the new IPS venture in Holland and its international dealerships.
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Since its creation 10 years ago IPS has grown to become the UK’s largest independent parts and service provider, with revenues in excess of £8 million and is the country’s official parts and service provider for several major aerial lift manufacturers including Genie, Snorkel and Pop-Up.

APS was founded over 25 years ago specifically to sell and service aerial work platforms and was one of Genie UK’s first dealers. It now handles Genie, Niftylift, Hinowa, Ommelift and Youngman’s powered platforms and has a healthy used equipment and service business. Its revenues are similar to those of IPS – giving the combined business revenues of over £15 million. The business will have around 100 employees, three geographically strategic locations and 22 mobile service vans.
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The merged business will be managed by the four senior directors of the two companies, all of whom have different strengths and who will focus on different areas in the new venture.

Tony Jennings principal shareholder and managing director of IPS has a financial background and will be chief financial officer, Jim Daintith chairman and principal shareholder of APS is more of an entrepreneur/general manager and will focus on strategy and business development, Kevin Shadbolt of IPS will be operations director and Richard Tindale of APS the sales and marketing director.
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The deal is done - (L-R) Richard Tindale, Jim Daintith, Tony Jennings and Kevin Shadbolt

All four have worked closely together in the past, when IPS and APS formed a joint venture to sell and support UpRight and Snorkel in the UK. See a merger of the initials They are completely familiar with each others strengths and weaknesses and know whether they can work together or not – a critically important element in the success of any merger.

Jennings said: “The strengths and attributes of IPS match perfectly with those of APS to create an organisation of huge potential. We firmly believe that the access industry has matured to the stage where manufacturers can no longer afford, or need, to invest heavily in their own support structures in every country. They need strong, reliable and comprehensive sales and support operations – and the combined IPS/APS operation can deliver just that on an independent basis.”

Daintith added “For manufacturers seeking significant market penetration, finding and employing sufficient numbers of truly capable individuals for sales and technical roles is extremely challenging, time consuming – and very expensive! We are fortunate to have collected together over the years strong teams in both APS and IPS, and their complementary talents can now provide manufacturers with service levels far in excess of what they could realistically achieve by creating their own local organisation.”
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Jim Daintith of APS (L) and Tony Jennings of IPS

Vertikal Comment

This is one of those rare mergers that are a natural fit and almost certain to succeed, the amount of overlap between the two companies is minimal so the pain of integration should be minimal. While claims about how the strengths of each party complements the other is always trotted out at the time of a merger this time it is actually true.

If an Access equipment manufacturer looking to break into the UK market asked you to recommend the company best able to provide a national parts and service support for his product you would almost have to answer IPS.

If the same company then asked you to recommend the best national sales distributor you would be hard pressed not to have APS at or near the top of a very short short-list.

Combine the two and you do have a powerful single distribution entity, but far more important than all that are the people, and that starts at the top. The four principles are certainly complimentary and appear completely relaxed in each others company – Tony Jennings may have to hone his fishing skills to get fully on Jim Daintith’s wavelength – but the fact that all four have been in the business for so long and have such clearly different skill sets is definitely a major advantage.

The fact that the four have also worked on a joint venture in the past which for whatever reason never worked out, and were able to dismantle that without killing or hating each other is another positive indicator for the merger.

The move will also throw up all manner of opportunities for the company and its employees, it helps that very few roles are duplicated between the two businesses and that neither has layers of middle management who are usually so good at scuppering mergers through infighting.

The merged company does not have national distribution rights for a full-line self-propelled product range and lacks a larger scissor lift product. It will also be interesting to see how the merged entity tackles overseas expansion. This will be new to APS – although Tindale has spent most of his career in this area. IPS has struggled with what is a tough task, but the new larger venture will have more resources to help build this part of the business.

Finally this move gives the two principle shareholders a far better long term exit opportunity, whenever they decide to retire. The shares in the new business will be split 50/50 between APS and IPS shareholders so all will have a smaller stake in a bigger business, which makes it far easier for any individual to sell up and move on, as does the larger management structure that the bigger entity will have.

Mergers don’t come any better than this one – the word ‘synergy’ - grossly overused and misused in the corporate world – really applies here.