Newspaper article The Journal (Newcastle, England)

Will R&R Have Rivals in THETOP 200 Licked? TOP 200

Newspaper article The Journal (Newcastle, England)

Will R&R Have Rivals in THETOP 200 Licked? TOP 200

Article excerpt

Byline: JO BLAKEMORE jo.blakemore@ncjmedia.co.uk

SIGNIFICANCE of private equity to the progress (or sometimes otherwise!) of companies in the North East Top 200 is highlighted by the recent sale of R&R Ice Cream, 15th on the list for the last two years.

The Northallerton group, well on in aspiring to dominate European markets, was at the core of venture capital activity when changing hands in April for a less than annual turnover sum of around PS716m. The seller was Oaktree Capital Management, the buyer another private equity firm, Paris-based PAI Partners.

As this relieving platoon of money boys (and girls) moved in, chief executive and managing director James Lambert, who catalysed the business from Richmond Ice Cream with five employees into a PS750m turnover market leader, became executive chairman, still leading the company but one shorn now of its Leeds operation.

Lambert, a bull semen salesman in a previous career, is an outstanding businessman, as shown by his recent awards of OBE and the Ernst & Young title North of England Entrepreneur of the Year. Yet even he might acknowledge that progress since 1985's start-up would have been slower without private equity from one source or another. It also looks as if R&R Ice Cream, one of the top five privately-backed companies in the Top 200 last year, will show higher turnover again this time, along with three at least of the others. This in turn bears out indications among last year's overall top 10 that many sales are rising regardless of the economic pressures.

Effects of private equity will appear right down the list. Without it, gaining edge quickly over competition in a tight market can be elusive when a firm's capital is already committed, and banks are still picky about horses to back.

Sometimes the infusion is lifesaving, as at furniture retailer A Share & Sons alias ScS (33rd in the list last year).

US private equity group Parlour Product Holding Ltd in 2008 bought the Sunderland-based nationwide business out of administration, rescuing nearly 1,300 jobs, after a crisis of poor trading was compounded by an insurer's refusal to cover five suppliers.

Among last year's other top five recipients of private equity, Newcastle-based PD Parks, alias Parkdean, is 65% owned by Alchemy Partners as it bids to more than double the size of its holiday parks operations over five years, Sectors like pharmaceuticals and off-shore industry must invest vast sums to win or meet orders, advance or even sustain progress, hence Aesica Pharmaceuticals' resort to private equity. Robert Hardy, whose management buyout of BASF's production plant at Cramlington in 2004 created Aesica, saw his company shoot from 73rd to 45th last year, and it also stands 116th in The Sunday Times International Track 200 for overseas performance. …

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