John Crichton, the CFO of PE-backed Aston Barclay, has had a busy few years. He talks to Rachel Bridge at Drax about the importance of understanding people as well as numbers.
In the past few years John Crichton has built up a strong reputation for his ability to deliver an effective private-equity backed buy and build strategy.
With good reason. When he was CFO at Marston he successfully oversaw nine acquisitions in the space of six years, including the £125 million acquisition of NSL, the civil parking enforcement and government outsourcing provider which was operationally larger than Marston itself. During this time the business also underwent a change of private equity ownership, from Inflexion to ICG.
The acquisitions were carefully chosen, he says: “We were often buying owner managed businesses that had some sort of challenge around the corner, for example regulatory change which meant they would have had to invest significantly in new processes or business practices. They recognised that this was their moment to exit and so we were able to buy the business at a sensible multiple and then deal with the regulatory change by absorbing them into a business that had already gone through that change.”
John has now brought his buy and build skills to Aston Barclay, the vehicle remarketing specialist. He joined the business as CFO and Commercial Director early in 2018, a few months after the business was bought by Rutland private equity, and the business has already completed two acquisitions with more in the pipeline.
John says the key to integrating an acquisition successfully is to treat it as an ongoing process rather than a one-off transaction. He explains: “Difficulties can occur when an acquirer tries to adopt a ‘one size fits all’ approach in how they manage the business as they integrate it into the group. They obviously want to achieve certain objectives in terms of how the business is organised, the culture and so on, but that is a journey, it is not a switch that you can flick on the day that you buy the business.”
He adds: “The acquisitions that go wrong are those where the acquirer fails to recognise that they have got to bring people on that journey. You can’t just expect them to take one hat off on a Friday and put on a new hat on a Monday and for it all to work perfectly. People underestimate that integration process.”
Indeed he says that his job can often be as much about understanding people as it is about understanding finance.
He says: “If you are buying smaller businesses you are often dealing with people who have not gone through an acquisition before and it can be a real shock for them. They can be completely overwhelmed by the process they need to go through in terms of due diligence and so on. Making sure you manage the expectations of the vendor alongside managing the practical steps of the process is key to its success.”
John was born and brought up in Inverness in northern Scotland and after qualifying as an accountant with a local firm got a job as a financial controller with an oil field support services company in Bahrain.
After six years he moved to London and became Director of Finance at ArmorGroup, which at that point was a subsidiary of a US manufacturing business. However, the business quickly underwent a management buyout backed by Granville Baird, and two years later it listed on the London Stock Exchange.
It was John’s first taste of private equity and a hugely beneficial learning experience. He says: “I had the benefit of three different perspectives in very short succession. Within a four year period we went from being a subsidiary of a US listed company through private equity to an independent UK main market listing.”
When the business was bought by G4S, John moved to APCOA, the private-equity backed parking operator, before joining Marston in 2011.
John singles out one characteristic that has been particularly useful to him throughout his years of working in private equity-backed businesses: “I am calm and I think that is important. A CFO needs to be able to support and nurture the CEO and I think being a calming influence can be quite a complementary skill to have.”
It is all a very long way from the career John planned for himself as a child, when he dreamt of becoming a long distance lorry driver. He says with a smile: “There are times when I think that having a bit of solitude and peace and quiet might be quite attractive, but on the whole, I am quite pleased with how it has turned out!”
Drax sector lead: Mark Tomley
Head of CFO and Finance Practice
Tel: 0203 949 9557