LCH Generators Ltd
LCH Generators was formed in Glasgow in 1980, by brothers John and James Pirrie. John's background was in engine sales and James qualified as a chartered accountant in 1984, and together they formed a dynamic team. Working from home, John full-time and James part-time, they built a business in buying and selling used diesel engines, which they shipped to customers, mainly in the Far East. By the mid 1980s, they had begun to respond to a growing demand for generators. They started to source and sell used sets, at the same time reducing their involvement with engines. James joined the company full-time in 1986, and in 1987 a third employee was taken on to work in repair and maintenance. This allowed LCH to offer a better quality of used generator and by the end of the 1980s, they not only sold new and used machines but could provide service and maintenance of customers' own sets.
By 1990 John and James had realised the opportunities to be explored through generator hire. Seven new generators were purchased to start the hire fleet and they continued to recruit skilled engineers to service them. They also began to take on administrative and sales staff to manage their growing customer base. They focussed on growing the business through a combination of a proactive approach to the market and their product, sound management of the company's financial, personnel and IT resources and above all, a keen commitment to quality of service. By 1997, the hire fleet contained sets from 10kVA to 1000 kVA, along with all the supporting accessories such as bulk fuel tanks, cable, distribution boards and transformers. Staff numbered around 40 and LCH was firmly established in the market as a company providing a reliable and high-quality service.
LCH had always operated its hire fleet throughout the UK but increasing business in England meant that it made sense to develop this area specifically. In August 1998, LCH opened a depot in Coventry, a location that offered good potential in terms of business opportunity and further expansion. Rapid growth throughout the English market followed and a London depot was opened in September 2000.
In 2001 David Bell joined the company. As Operations Director he developed the company's structure and operating model and implemented an integrated management system accredited to ISO 9001 for quality management, ISO 14001 for environmental management and OHSAS 18001 for health and safety management. At the time, LCH Generators were thought to be the first plant hire company in the world to be accredited to all three standards and were one of only around 300 companies in the UK to have done so. This helped LCH become a formidable national operator, delivering a level of customer service that was well to the forefront of industry standards.
In 2003 a fourth depot was opened, this time in Portsmouth, in order to better service the market in the south east of England.
In 2004 a new head office building was opened in Glasgow. Existing staff were relocated and extra staff recruited to help manage the growing business. A fifth depot, in Wigan, was opened filling the geographical gap between Glasgow and Coventry. The company now had total national coverage and by 2005 had become the market leaders with a level of service unrivalled in the industry.
At this point the company was approached by a competitor keen to acquire the business. Many approaches had been received over the years but the structure and timing of this approach lead John and James to think about the offer seriously. It had always been their intention to sell the business at some point and the timing, although perhaps earlier than anticipated, seemed right. PricewaterhouseCoopers were engaged to conduct the sale process. This was when John, James and David came into contact with Brian Aitken for the first time. As the Director of Corporate Finance, Brian headed the team that conducted the sales process and invited bids from other potentially interested buyers, including trade and private equity. Brian advised John and James throughout the sale process and led the negotiations. In May 2006 having grown to employ almost 200 people and with the annual EBITDA approaching £12m, the company was sold to Speedy Hire Plc for £62m. The structure of the deal meant that all of the employees, the operating locations and the head office were retained, an important consideration for John and James when deciding which offer to accept. The company continues to grow in new ownership and since the integration of the Speedy generator fleet with the LCH fleet, the company is now by far the largest generator hire operator in the UK.
After they exited from the business, John, James and David were keen to build on the excellent working relationship they had formed over the years. They identified private equity as an attractive opportunity to invest in and support a portfolio of companies. This would allow them to draw on their extensive experience across a number of areas and to help grow the next generation of market leading businesses. Brian joined the team to bring his corporate finance skills gained from 14 years at PricewaterhouseCoopers. They coined the phrase "Entrepreneurial Equity" where the skills and experience of the entrepreneurs is provided in addition to finance. Nevis Capital was launched in March 2007 to fill a gap in the market. Their first deal was the £5 million acquisition of The Micro Spring & Presswork Company Limited.
LCH Generators was the company that brought the four partners of Nevis Capital together. It was a leading UK services business that through its many components, represented a finely-tuned and progressive business model. Its structure and the sales and services it offered were as follows:
- a national depot network with one agent
- just under 200 employees
- a supporting head office exerting strong management controls, including the monitoring of key performance indicators and finances; head office also set and managed the sales strategy, marketing and PR, together with central purchasing, personnel and IT.
- a hire fleet of around 2500 diesel-powered electricity generators from 10 kVA to 1400 kVA
- the hire of all ancillary equipment required to form a complete temporary power solution, including cables, distribution, transformers and bulk fuel tanks
- out of hours emergency deliveries and breakdown cover using dedicated on-call drivers and engineers
- an internal transport fleet (ADR compliant) of rigid and artic lorries equipped with cranes
- fuel management via a fleet of tankers using a computerised fuel management system
- the sale of generators both in the UK and overseas
- planned maintenance, reactive maintenance and repair of third party owned generators
- comprehensive stocks of spares at each depot and in each service van.
- on-going training for staff, with an emphasis on health and safety.
The story of how LCH Generators was formed and ultimately sold is told below.
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LCH Generators was formed in Glasgow in 1980, by brothers John and James Pirrie. John's background was in engine sales and James qualified as a chartered accountant in 1984, and together they formed a dynamic team. Working from home, John full-time and James part-time, they built a business in buying and selling used diesel engines, which they shipped to customers, mainly in the Far East. By the mid 1980s, they had begun to respond to a growing demand for generators. They started to source and sell used sets, at the same time reducing their involvement with engines. James joined the company full-time in 1986, and in 1987 a third employee was taken on to work in repair and maintenance. This allowed LCH to offer a better quality of used generator and by the end of the 1980s, they not only sold new and used machines but could provide service and maintenance of customers' own sets.
By 1990 John and James had realised the opportunities to be explored through generator hire. Seven new generators were purchased to start the hire fleet and they continued to recruit skilled engineers to service them. They also began to take on administrative and sales staff to manage their growing customer base. They focussed on growing the business through a combination of a proactive approach to the market and their product, sound management of the company's financial, personnel and IT resources and above all, a keen commitment to quality of service. By 1997, the hire fleet contained sets from 10kVA to 1000 kVA, along with all the supporting accessories such as bulk fuel tanks, cable, distribution boards and transformers. Staff numbered around 40 and LCH was firmly established in the market as a company providing a reliable and high-quality service.
LCH had always operated its hire fleet throughout the UK but increasing business in England meant that it made sense to develop this area specifically. In August 1998, LCH opened a depot in Coventry, a location that offered good potential in terms of business opportunity and further expansion. Rapid growth throughout the English market followed and a London depot was opened in September 2000.
In 2001 David Bell joined the company. As Operations Director he developed the company's structure and operating model and implemented an integrated management system accredited to ISO 9001 for quality management, ISO 14001 for environmental management and OHSAS 18001 for health and safety management. At the time, LCH Generators were thought to be the first plant hire company in the world to be accredited to all three standards and were one of only around 300 companies in the UK to have done so. This helped LCH become a formidable national operator, delivering a level of customer service that was well to the forefront of industry standards.
In 2003 a fourth depot was opened, this time in Portsmouth, in order to better service the market in the south east of England.
In 2004 a new head office building was opened in Glasgow. Existing staff were relocated and extra staff recruited to help manage the growing business. A fifth depot, in Wigan, was opened filling the geographical gap between Glasgow and Coventry. The company now had total national coverage and by 2005 had become the market leaders with a level of service unrivalled in the industry.
At this point the company was approached by a competitor keen to acquire the business. Many approaches had been received over the years but the structure and timing of this approach lead John and James to think about the offer seriously. It had always been their intention to sell the business at some point and the timing, although perhaps earlier than anticipated, seemed right. PricewaterhouseCoopers were engaged to conduct the sale process. This was when John, James and David came into contact with Brian Aitken for the first time. As the Director of Corporate Finance, Brian headed the team that conducted the sales process and invited bids from other potentially interested buyers, including trade and private equity. Brian advised John and James throughout the sale process and led the negotiations. In May 2006 having grown to employ almost 200 people and with the annual EBITDA approaching £12m, the company was sold to Speedy Hire Plc for £62m. The structure of the deal meant that all of the employees, the operating locations and the head office were retained, an important consideration for John and James when deciding which offer to accept. The company continues to grow in new ownership and since the integration of the Speedy generator fleet with the LCH fleet, the company is now by far the largest generator hire operator in the UK.
After they exited from the business, John, James and David were keen to build on the excellent working relationship they had formed over the years. They identified private equity as an attractive opportunity to invest in and support a portfolio of companies. This would allow them to draw on their extensive experience across a number of areas and to help grow the next generation of market leading businesses. Brian joined the team to bring his corporate finance skills gained from 14 years at PricewaterhouseCoopers. They coined the phrase "Entrepreneurial Equity" where the skills and experience of the entrepreneurs is provided in addition to finance. Nevis Capital was launched in March 2007 to fill a gap in the market. Their first deal was the £5 million acquisition of The Micro Spring & Presswork Company Limited.