Adopted Business 2003: Grazies

Graham Nicoll takes us through theinner-workings of selling his business

By the time you read this Grazies will be on the verge of extinction.

You might think Graham Nicoll, founder of the fitness management company that Growing Business ‘adopted’ in autumn last year, would be emotional or scurrying around for a rescue package.

But he’s not. After all, Grazies is only on the way out because it performed well enough to attract interest from larger players in the sector. Soon after joining our fleet of adopted businesses it was sold to Kleinwort Capital backed Sona Positive Health.

It’s a scenario all good businesses face. And at the time it was just one of a number of options he had open to him. Nicoll came to Growing Business’ attention by winning a place on the Baker Tilly Investment Readiness course. Clearly one of the growth options he was considering was to raise funds for acquisition. So why did he opt to sell up?

“I was getting married in August,” he offers as means of explanation. “It was time to think sensibly, not gung-ho. I needed to raise money and it was either angel finance, VC or remortgaging, but I wasn’t keen on putting my balls on the line with personal guarantees and debentures.” He’d had a couple of approaches already and when Sona made its first offer it was quickly rebuffed, as were others. Just before his wedding he agreed a deal in principle. It went to due diligence while he was honeymooning. And soon after his return, the transaction was complete.

To add a smidgen of context, Sona was further into its life cycle. It had £5.5m backing from Kleinwort Capital and the money was burning a hole. For Sona the advantages were manifold, namely that it removed a competitor from the marketplace, got access to its competitive knowledge and bought in its marketing capability, including dealmaker Nicoll. One example of what it got is the facility he recently launched at Vodafone’s HQ, which, among others, was work in progress two years ago. Other clients Nicoll brought included PowerGen, Pfizer, BT, Air Miles, 3i and American Express.

So what’s an integration really like? On a personal level Nicoll is now business development director, but appears sanguine about this loss of autonomy. He reports to the group chief executive, and concentrates on products and services, new clients, more strategic accounts with existing clients and cross selling, so has kept quite a few elements of what he did and now has access to 500 employees, whereas once it was just over 20. “Yes, I’ve lost that control, but at this moment in my life and career, it’s good. I started Grazies at 21 and it was the first big thing I’d done. I’m now working with those who had been MDs at bluechips, so it’s a steep learning curve.”

Indeed, group chief executive Chris Jessop, who led the management buy-in, was formerly managing director of a division of BUPA. Contacts like Jessop and others may prove invaluable in future, he points out. There are things to be learnt from some of Sona’s other acquisitions, such as the recent purchase of a medical company. Nicoll sees it as a positive that he’s worked as an employee of a larger organisation and relishes the associated frustrations and opportunities. “I still see myself as an entrepreneur,” he says. “And as Sona is still relatively small with a turnover of around £2.5m I can add that entrepreneurial flair.”

Sona was formerly known as Tweedpark, pre-MBI, its founder Brian Davies remains as managing director. With a similar background to Grazies, Nicoll believes the assimilation for him and his staff was easier due to Davies’ understanding of the process. And for continuity with clients, phone numbers, the website and point of contact remained the same in the first few months.

Now the integration is near complete – Nicoll is tied to Sona until October and plans to stay for the foreseeable future – he is though, weighing up other options. Long-term he would consider being part of an MBO of Sona, he says, but for now he’s open. “You always have a variety of ideas of what you can do. One in particular appeals – give it six months and there may well be the seedling of a new venture.”


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