Succession planning behind McKellar Renown sale

The Norgate family says selling the McKellar Renown building last year led to the company’s sale to Bambra Press, as part of its succession plan for the next generation.

Co-general manager Chris Norgate tells ProPrint the timing was right for the family’s succession plan from the previous generation of Stephen and John Norgate to himself and Adam and Kerrie Norgate.

He says the Carnegie plant was ageing and was previously a movie theatre, and therefore not set up to be a printer, so they took the opportunity to provide for Stephen and John in their retirement and start a new chapter.

However the younger generation are fully intending to continue in the industry. “We intend to be in print a long time,” Chris says.

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Outgoing managing director Stephen Norgate says ‘people were knocking on the door to buy the place, so we got a high price’, but then had to consider the future of the business.

“My primary concern was to keep our clients serviced because without clients there is no future for the company and no jobs for the staff or my family,” he says.

“I am nervous about the industry because it is declining rapidly and print does not have a lot of good news right now, so we had to make sure we left our kids in a good position.”

Stephen Norgate says the family considered all options including a new plant, acquiring other businesses, merging, or sharing resources.

After discounting a greenfield site as ‘too risky’, Stephen says the job was largely left to the next generation to pilot the future of the industry, and he could not be prouder of the result.

“In hindsight, what I gave them the authority to do was a huge task and they have done very well. Our succession plan has worked better than I anticipated,” he says.

Chris Norgate says they decided against buying or leasing a new site because of the cost and process involved and because they did not want to have the plant’s setup superseded by new printing technology.

He says they assessed offers to acquire two other printers, and discussed being bought out by a couple of others including Bambra.

Stephen says the family was selective about who to discuss potential sales or buyouts with, and Chris and Adam extensively interviewed prospects to see if it would be a good fit.

“Some had good offers, but they did not really get what we do or were not appropriate for the needs of our clients, but Bambra made a lot of sense,” he says.

“We could have happily have traded on but I think this is the best option and I am extremely excited. How often do you see two honest businesses joining together?”

“McKellar can only get stronger as a brand from here and we have created a strong player in the industry.”

Chris says the outcome is not only what is best for staff, clients, and the family – it is also great news for the printing industry, which is struggling with overcapacity.

“We want to be part of the solution, not the problem. We do not want to be growing capacity in a market with too much already, cutting prices and hoping that when the music stops we are left standing,” he says.

“Instead, two long standing, stable, forward-thinking businesses with strong reputations are joining forces to create even greater possibilities for print.

“We are confident we can add more value to print and build more excitement in the medium – offering media buyers more reasons to buy print versus competing advertising and communications mediums and industries.

“We aim to create more innovative products and solutions for clients that prove print's effectiveness, get results and encourage Australian media buyers to make print an effective, proven and growing part of their media and communications spend long term.”

[Related: It's a family affair]

Chris says while it is bittersweet for the family business to be owned by someone else, McKellar will remain autonomous under his and Adam’s direction, and instead of reporting to Stephen and John then will now report to John Wanless.

“This deal has been collaboratively engineered by John's team and the Norgates over the last six months. The two businesses are a natural fit, we are cut from the same cloth and based on good quality craft,” he says.

“People who know the pedigree of Bambra and McKellar know what an organic marriage of skills and philosophies it is. We hope this can set a precedent for how things can be done.”

Chris says McKellar’s turnover is in good shape has been consistent for the past three years, and though not all of its equipment will transfer to Bambra, adding extra shifts will keep capacity at the same level for both companies combined.

“Both brands came into this in some of the best shape of their lives and neither will shrinking away – both will be learning from each other and growing their abilities, market prominence and value propositions,” he says.

Chris says he and Adam will retain their co-general manager roles and maintain control of the McKellar brand and along with Bambra general manager Troy Riley will report to chief executive Wanless.

John Norgate retired at the end of 2014 and 61-year-old Stephen will stay on in a sales and advisory role with a view to gradually winding back. Their father Ray, who bought the business in 1946 and is now 94 years old, has given his blessing.

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