Bracebridge Corporate Finance talks to Paul Morris MBE, who founded Addmaster in 2000 and concluded a successful sale for £33m in January 2021.
Tell us a bit about Addmaster
I set up the company, borrowing £5000 from my grandmother, with the aim of developing additives to improve the value and performance of my customers’ products. Today we are a global leader in the supply of technically innovative additives for the plastics, paper, textile and coatings industries. One of our major brands, Biomaster, is an anti-microbial additive, which helps to keep surfaces clean and hygienic and reduces the risk of cross-contamination.
What were the highlights of your achievements at Addmaster?
When I realised I wasn’t mad and the business would work was a big step! Then winning business awards within 2 years from my peers was a very proud moment. Latterly the Queen’s Awards have been very special and cemented our reputation globally, with exports now running at 70%.
On a personal note being awarded an MBE for my services to exports in this year’s Honours list was the perfect sign-off for my ownership of Addmaster.
What were the key factors in the success of Addmaster?
Initially it was the business model – by outsourcing, we could dedicate 100% of our time to customers and listen to them rather than worrying about how efficient our factory was. Then it was purely hard work to grow the brand and product range – a common theme for any entrepreneurial business.
Ultimately, it is all about people. A big step was appointing Sandrine Garnier as a Sales Director. She was from the corporate world but wanted a different way of working. Sandrine has gone on to become our Managing Director and has tripled our sales in 7 years.
What were the biggest challenges to growing Addmaster?
Our biggest challenge has been finding staff who had the unique skills we needed and who understood the culture. As a company that developed a new outsourcing model, we noticed some people really struggled with not having a manufacturing facility. Also, people with the right skills but a corporate background couldn’t adapt to the entrepreneurial way we operate and the speed at which we move and make decisions.
What were the key drivers for the deal with Polygiene?
The time was right, not just for the business to kick on and be part of larger entity but also for me personally when at 51 years old to secure my financial security, free up some time for my family and at the same time allow the business to flourish under a new structure.
Polygiene, as our biggest customer and long-term partner, is a perfect home for the business. Bracebridge Corporate Finance had prepared us for sale and helped me to consider various exit options but given our relationship with Polygiene and the excellent strategic fit, this was the best option. Although we already had the relationship with Polygiene, I now know that a deal like this would still not have been possible without Bracebridge. There is a long list of benefits but being able to focus on my business while Andy handled the sale and letting him be bad cop so I could still have my “special relationship” with my customer whilst negotiating the price, were two that stand out.
What would you do differently if you were setting out in business today?
We have invested in people as they are our key asset, but I suppose we could always have invested more in our sales infrastructure and also I would have developed a strong financial team.
What are your top 5 tips for any business owner considering a sale of their business?
1. Get your business in order before considering a sale!
2. You need a commercial adviser who understands you. For us, Andy did the most homework, understood our goals the best and was also the most open and straightforward to deal with.
3. Consider your most valuable members of the team and how a deal will impact them – as they are the value to any new owner.
4. It’s your legacy and you only have one life so be patient for the deal that allows you to pass your business on to someone you like and trust. As in my deal, there are shares involved and in many there are deferred considerations, so knowing the cultures are aligned is important to knowing the new structure will prosper.
5. I pride myself on being able to outwork any of my competitors but even I was not prepared for the level of effort required to get a deal over the line (despite Andy’s warnings). I have always said anything worth having in life is worth working hard for and so don’t let this put you off, as its also been great fun and with the right partner you can get a deal across the line that will change your life.
So what’s next?
I still have an important role to play as an ambassador to Addmaster and helping to drive the business forward under Polygiene’s ownership, but hopefully in the future I can spend more time with my family, following Wolverhampton Wanderers and fly fishing – if you haven’t tried standing in a river in waders to relax – then make sure you try it one day!