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North Lincs Haulage—It's not a Take-over
Page 34
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Lines
" acquisition " of the North recent announcement concerning
.1 the Haulage group by London and Northern Securities Ltd. caused considerable concern among customers and drivers, many of whom asked whether this meant that the companies had "gone broke". One substantial client threatened to look elsewhere for transport while a driver actually telephoned from Glasgow, so concerned was he.
The Commercial Motor" decided to investigate and, if poss!ble, clarify the position and Norman H. Ifilsley's report, which follows, w;11 no doubt be of interest not only to those who have dealings with the companies concerned, but to others in the industry who are interested in take-overs, amalgamations, financial arrangements—call them what you will.
For• several years now reports of acquisitions—or take-over bids—in the haulage industry have appeared almost constantly, week by week, in the technical and financial press; the vehicles and businesses have in most cases come under the control of larger groups or bodies of people with an interest in haulage.
There can, of course, be many reasons why a company or an individual should want to sell out, amalgamate or be taken over. For instance, the party, or parties, concerned may be on the verge of a financial crisis: there may have been a death of one of the directors; there may be a desire to concentrate on another and different kind of business altogether or, With the threat of nationalization and the headaches that go with haulage, the parties concerned may just want to quit the business.
An acquisition (or should I call it an arrangement?) with a difference was the one reported in The Commercial Motor on June 12 concerning the North Lines group of Scunthorpe, Lincs. These companies consist of North Lines Haulage Co., Tanker Hire Ltd., North Lines Garages Ltd., and North Lines Tankers Ltd.
It is different for two reasons—first, because London and Northern Securities Ltd., the City group with whose name North Lines is now asso ciated, i s n o t primarily interested in road haulage—it has big investments in the contracting and construction industries, and quarrying, too. Secondly, the North Lines companies are neither on the verge of bankruptcy nor is its managing director fed up with haulage, dead, or frightened of nationalization! Far from it. The companies' founder (he started off with £50 and one vehicle when he left the Army) is Douglas N. Holloway. Having started so modestly, and having worked his way up to be the chairman and managing director of a group of four companies, incorporating some 80 A-, Contract Aand B-licensed vehicles, plus 40 tankers, it is hard to believe that Mr. Holloway—a man stilt in his late 30s— should want to get out of the business.
What then—Mr. Holloway's customers and competitors may well ask—is he up to? The answer is simple.
He still retains a substantial interest in the business and, at the same time, is gaining a sizeable holding in the fastgrowing and more diversified London and Northern Group, the shares of which are publicly held and quoted -on the London and Newcastle Stock Exchanges. He was approached by London and Northern who, not so long previously, had acquired an interest in Davisons Transport Ltd., of Shildon.
Having weighed up the pros and cons of associating with London and Northern, Mr. Holloway. and having sought professional, expert advice, he decided to take the plunge.
"It is an insurance policy, as far as I am concerned," he told me when I interviewed him. "It will ensure that we remain competitive. We have enlarged so quickly at Scunthorpe that we have either to open depots of our own in major cities, or amalgamate." He is ambitious enough to know that in business— especially in haulage—an eye must be kept on future growth. "It is easier to make money on your own doorstep than it is 100 miles away," he told me.
But there is snore to it than this. He is realistic enough to realize (and his accountant confirmed this) that if he died —perhaps on the road at the wheel of his Aston Martin—death duties could put each and all his companies in jeopardy, which in turn would affect the 200 or so employees plus, of course, his customers.
The link-up with London and Northern will mean that North Lines customers can benefit from Davisons Transport's existing depots in London, Birmingham, Manchester and Shildon. Instead of relying on contacts for backloading, priority will be given by Davisons to North Lines, and vice versa, less, of course, the usual sub-contracting percentage deduction. Interchangeability will eventually be the order of the day.
"Things will be going on the same as before," Mr. Holloway has told his understandably anxious customers and drivers. I think he is being just a little modest in this. The sentiment has often been expressed—and it was at the last Road Haulage Association conference at Brighton—that the day of the one-man business is over. If this is so, then by linking up with London and Northern, Mr. Holloway is surely doing his customers a favour. Maximum backloading, the use of "foreign" bases. What more can a haulier ask?