AUSTRALIA: MY BEST DEAL - ALAN JACKSON'S ACI ACQUISITION.

AUSTRALIA: MY BEST DEAL - ALAN JACKSON'S ACI ACQUISITION. - Not content with his successful acquisition of Nylex, BTR chief executive Alan Jackson went on to buy its ex-parent, ACI. By Chris Blackhurst.

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Last Updated: 31 Aug 2010

Not content with his successful acquisition of Nylex, BTR chief executive Alan Jackson went on to buy its ex-parent, ACI. By Chris Blackhurst.

If Alan Jackson didn't exist, he would have to be invented - as an encouragement to school-leavers everywhere.

In 1951, daily commuters on the train from Drouin to Melbourne, received a new, 16-year-old companion: the office boy for Kelly and Lewis, a Melbourne machinery manufacturer. Forty years on, that boy is the man behind BTR's £1.5 billion bid for Hawker Siddeley.

In Australia, Jackson is a business legend. The story of how the lowly office boy went on to study for his accountancy exams on a correspondence course and achieved the top marks in the country, how he later rose to build BTR Nylex - the UK industrial conglomerate's local subsidiary - into Australia's third largest company, is part of business folklore. In just seven years he took BTR Nylex from annual sales of A$115 million to A$4.8 billion and profits of A$16.4 million to A$764 million.

The only person to win the Businessman of the Year award from Australia's two leading financial magazines, Jackson was also voted Australia's top executive by that country's most powerful union boss. Now the tough-talking Aussie has been charged by BTR chairman Sir Owen Green to work the same magic on a much broader canvas. In January, he became group chief executive.

Not surprisingly, given his short time in Britain, Jackson's best deal - 'ordeals, the one fits into the other' - occurred in Oz. In 1984, BTR Hopkins - BTR's then Australian arm - led by Jackson, bought Nylex, a plastics manufacturer from Australian Consolidated Industries (ACI). BTR Hopkins was renamed BTR Nylex and Jackson's rise began. For three years, Nylex had lost money.

A year later, it was back in profit. The ease with which Nylex turned 'into an immediate profit-earner' planted the seed of an idea in Jackson's mind.

'Inside the Nylex deal I glimpsed a sleeping giant in ACI, its ex-parent. As one of the biggest companies in Australia, ACI was highly respected. But it had always under-performed. Because of Nylex, I began to look at ACI differently. Now, when l looked at it, I saw seven Nylexes.' There was just one problem ACI was more than twice BTR Nylex's size. 'We were worth around A$150 million; it was north of A$2 billion.' Jackson put his ambition on hold.

By October 1987, BTR Nylex had edged a lot closer, growing to annual sales of A$1.5billion, compared with ACI's A$2.5 billion. Then came the stock market crash and, on a Saturday morning in early December, the call Jackson had longed for. One of the biggest shareholders in ACI, with 15%, had over-reached itself - would Jackson be interested in buying the stake? He said he was and spent the rest of the weekend glued to a computer.

'I keep a computer model on all the companies I'm interested in. Ever since Nylex, I'd kept a file on ACI - just return on assets, return on sales, that sort of stuff. 'At the end of the weekend, he put a call into Green and Cahill. He wanted to bid for ACI.

Jackson put together a proposal for the full BTR board and flew to London. After hearing his case- 'I told them the price range and how I would fund it '- he got the go-ahead. On 4 January, 1988, he offered A$1.6 billion, or A$4 a share, for ACI. Three months later, after what he terms a 'tough fight', ACI was his. It was the biggest takeover in Australian history. 'ACI did to BTR Nylex what Thomas Tilling did to BTR. It was the largest industrial company in Australia and number four on the stock market.'

Jackson moved in. What he found confirmed his suspicions: despite its size, the company was hopelessly run. There was no standard central reporting system. 'The only thing, for example, that one manager, of a large glass-bottling plant in Melbourne, was required to report to head office was the number of tonnes of glass he had melted each day - not even the total of bottles produced or sold.'

In just 12 months, he saved A$40 million in overhead costs.

Building products, which used to account for 8% of ACI's turnover rose to 16%; packaging went from 8% to over 20% and nylon from 16 to 22%.

That was in Australia. As to which companies are in his computer now, he is not saying. Sorry.

(Chris Blackhurst is City Editor of the Sunday Express.)

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