A series of acquisitions throughout this decade has made the distribution
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division of Securicor the biggest in the company and a major player in its own right. And it hasn't stopped spending yet— plans are afoot to acquire at least one more company in the South-West to enhance its national coverage.
Since the launch of Securicor Omega Express in 1990 its growth rate has been staggering with turnover up by by nearly 400% from the £120m it earned in 1989. Last year the distribution arm finally became the largest of the firm's four divisions, outstripping even the security business which most people associate with the name Securicor.
The latest published figures, for September 1996, show that the distribution arm made a profit of £21m from a turnover of £470m and employed 12,500 people at 330 branches and terminals. At that time it was delivering twomillion parcels a week with a fleet of 9,500 vehicles to take 16% of the UK overnight parcels delivery market. The recent acquisition of John Miller Transport has increased these figures.
Much of this startling growth has been made through acquisition, starting in 1992 with the purchase of the UK customer base of US carrier Federal Express. Securicor became responsible for all FedEx deliveries and collections outside the M25. This was followed a year later by the acquisition of Scottish freight forwarder Scottish Express International.
Securicor chief executive Pat Howes says: "The purchases of these two firms were not made to comply with any strategy—they were on the market and gave us a good opportunity to expand. When we bought SEI we were not looking for a freight forwarding business but BAA had it and did not see it as a core business so we took if over to strengthen our position in the marketplace.
"However, further acquisitions, starting with the £50m purchase of Russell Davies, have been part of a strategy" he adds. "It made a lot of sense for us to acquire Russell Davies because if we were to remain in parcels we had to get bigger. Russell Davies improved our coverage in East Anglia, the south of England and the Midlands but we still needed a firm in the North and in the South-West. We have achieved our northern target by buying John Miller but still need to find a company in the South-West" Howes denies industry rumours that Securicor mounted a bid for the Bristolbased Lane Group.
However, even the purchase of Davies and Miller had spin-offs which were not included in the original game plan. Davies owned a container business, Rent Master, which gave Securicor its first foothold in the container business. Now, renamed Securicor Omega Container Logistics, it is claimed to head the UK container transport market as well as becoming a specialist in bulk and liquid distribution services.
And the purchase of John Miller has opened up the Irish Republic, where the firm now handles a lot of business although Ireland was not on the agenda when the original expansion plan was drawn up.
The takeover strategy has not been marked by the heavy-handed approach employed by some other firms. "We buy firms because we like the people and believe there is a chemistry between us," says Howes. "For instance, Ron and Glyn Davies (of Russell Davies) stayed with us for two years after the takeover, although they have now left to pursue other interests," This attitude is confirmed by John Miller, whose Dumfries-based business was bought last month for .1.5m. "We had a number of offers for the firm and decided that Securicor gave us the best opportunity to go forward," says Miller. "We decided to sell because we had reached a plateau where it was very difficult to expand by ourselves, but by hitching ourselves to the Securicor wagon we feel we can now grow the business."
Miller's firm operated 110 trucks with 270 trailers and five depots, with one as far south as Milton Keynes. He says that, while the firm will now operate under Securicor Omega Logistics' systems and budget control, virtually all of the staff, including all the drivers, will keep their jobs. He has been named operations director for Scotland and northern England.
"The biggest single thing that the takeover has achieved is that it will allow us to develop our professionalism," says Miller.
Securicor's acquisitions have not been restricted to distribution specialists, however. In October 1996 it bought driver agency Round Peg, which also supplies office and warehouse staff. The resulting relationship has been "excellent" says Round Peg managing director Adrian Hobbs. The firm, now known as Securicor Round Peg, offers its services in the Midlands seven days a week, 24 hours a day. Since the acquisition has developed a network of 50 bases and is well on the way to establishing a centralised national network where drivers can be obtained for any part of the country with a single call. We had always planned this move before the acquisition but our unique national system will not only benefit Securicor, by providing it with drivers, but we will also supply drivers to all the large distribution companies" says Hobbs. "The link up with Securicor has not meant that we have had to change the way we operate but it is rather the other way round. Securicor was so impressed by our innovative techniques that it has adopted some of them for use in other parts of the organisation."
Even Howes seems slightly taken aback by the speed of the development. "We did set out four or five years ago to buy more businesses," he says, "but there were no opportunities." As the opportunities came along Securicor has taken full advantage—and still has the acquisition of a compatible outfit in the West Country as a prime target.
I by Mike Sherrington