Unitech Industries’ reputation as one of the most acquisitive enterprises in the UK catering equipment market was enhanced recently when it picked up the assets of fallen catering distributor Valera. Catering insight spoke to Unitech’s CEO, Nick Imlah, to find out where its latest catch fits into the group and what makes a good acquisition target
What attracted Unitech to the Valera business?
Valera is a very well-known and established company in the catering sector. It has a strong reputation, integrity and service amongst its distributor base. We felt that with the existing offering we have with Corsair Engineering, we could complement Valera’s customer base with our own. It has given us a bigger range of products that Corsair Engineering and Valera can offer together.
What new market categories will the deal take you into?
Refrigeration, display counters, microwaves, induction hobs. There are a number of key products which I think Valera had that [they] were very successful in marketing, which they can market again, and we can strengthen that by having good support behind the business, and in addition increase the range of products through the Corsair Engineering offering as well.
The business you acquired has been named Corsair Wholesale Limited incorporating Valera. How similar will the new business be to the old Valera that people knew prior to its administration?
Valera probably had 11 or 12 key brands and we have been able to secure the vast majority — not all — of those brands already. We are still talking to one or two of the other brands, so I think we will be able to offer the majority of those brands through Corsair Wholesale Ltd to their existing customer base, but also to Corsair Engineering’s customer base. There will be a distinct crossover.
When making the acquisition, how dependent was it on you securing the support of key Valera suppliers?
I think that it is always fundamental that you get support from the supply chain. If the supply chain doesn’t feel comfortable moving forward with the new company then they can always go and find another route to market, can’t they. It was very important to us, and some have been more amenable than others to coming along straight away.
Presumably some of the equipment suppliers would have been hit financially by what happened to Valera…
I think most of them probably were. I think what we are able to demonstrate is a good, successful business with a track record of being able to purchase a number of businesses from administration, then looking at the strength of those businesses and bringing that strength to the front, while trying to bolster any weaknesses that need support.
Was there more competition for the business than you’ve typically faced when making acquisitions in the past?
I think it is always difficult to understand what competition there is sometimes. When something is being sold by an administrator, he is not revealing all his secrets. There is always going to be a big interest in a company that has gone into administration because a lot of people just go there to see if there are some people they can take, or something they can get without paying. There is always competition and there are always people looking to do a deal. I felt that we were able to offer Pratap [Gadhvi] and his team a good route to market through Corsair Engineering’s existing market place, and capitalise on their market place and existing distributor base.
What does Unitech Industries look for in a business when it is making an acquisition?
I think we have been fortunate in what we have expanded into. It has always been something that has aligned with what we are doing. With Scobie & McIntosh, we were making trolleys for them when they closed down. So, inevitably there was a link there already as we were a supplier. With Corsair, we were supplying that market place through Unitech, but Unitech was also much stronger in the food factory industry, so we felt it was a little bit of a crossover. We don’t necessarily have a strategic plan of acquisition, but we look to see what becomes available and analyse if we can bring some value back to what maybe has been there, or assess whether it is something we can structure within our own business. For instance, Valera will potentially cut Corsair Engineering’s overheads because we are going to be renting space and there’ll be shared office, distribution and accounts functions.
Is Unitech only interested in purchasing the assets of companies which are in financial trouble or administration?
No, we bought a company last year called Driver Southall, which is a very well-established checkweigh and vibratory conveyor manufacturer that has been around since the 1960s. That had been previously owned by Averys and we bought that in December last year to complement our range of conveyor systems. So, we don’t only look at companies in distress in that sense. We look at what happens to suit the market place and suit us as a business as we grow. It is very difficult to say to yourself, ‘we are going to do this now and this then’. It depends on the opportunities that become available.
Are there more acquisitions on the cards in the coming months?
No, if I am honest I think we need to have a couple of years of consolidation within the business. We need to consolidate what we have and strengthen the business where we need to strengthen it.