Chapter Twenty Six
With the banks starting to become aggressively unreasonable It was clear that we would have to find another way to financially run the company . We had made a tentative approach towards F.W.Morgan Cardiff a couple of years before when looking to secure a root to a port and direct importing which seemed to make a very logical fit that would benefit both companies and would greatly strengthen Nicks position. With the new equity shares now held between Phil McCormick and Rob Drury and the work carried out by Nigel Buckley-Ryan to clean up the companies balance sheet we were in good shape to move quickly to seek a partner that would give upstream purchasing and empower our sales position and market advantage. A further approach therefore was made to Mike and Clive Britton of Britons Holdings who had F.W.Morgan Ltd Cardiff in their group, a main line timber importer and merchant based directly on Cardiff docks set up in 2007 only a year before the financial crash F.W.Morgan had entered a difficult market and the logic of creating a new customer spending £2m plus a year by merger would greatly improve there own position in these difficult times.
Discussions commenced in December 2012 and an initial agreement to join forces was reached very quickly as to the benefit of a merger . A meeting with Nicks bank was organised so as to resolve the immediate banking issue with a financial umbrella from Brittons Holding a £9m asset company being offered as security over the overdraft currently used by Nicks . At this meeting the cross guarantee offered was rejected by the Bank ??? A personal share portfolio with a value of some £400k was also offered , this was also refused as security by the Bank ?? It was now becoming very clear that the Bank had , had there own agenda and were challenged directly on why obvious over securities were not good enough and what was there intent ? They stated that “they had no interest in Nicks as a client” why this could not have been stated six months before and avoid all the problems caused by there lack of support would only become fully clear some months later when the local manager left the banks employ in disgust as to how they had treated not only Nicks but a large number of his clients and made the true position known. What did become clear was that the bank had effectively cost the future of a number of well run long standing local businesses by the way it had behaved . Mike Britton and Phil McCormick left the meeting . Once outside Mike confided that the same Bank had mistreated Morgan’s some years before and that he was not surprised by the way the meeting had gone . A coincidence that I feel helped to secure the deal when It was decided over the boardroom table at Nicks that afternoon. The decision to create a merged trading company as soon as possible was taken , no accounts, no due diligence, not even a stock take just mutual respect , trust , and an old fashioned shake of a hand . The bank were informed we would be closing the account and moving to Lloyds the Bank used by Britton’s , F.W.Morgan would offer a £500,000 credit line removing the need for the overdraft , although Lloyds immediately gave Nicks a an identical facility to the one being removed by there old bank anyway proving the company was in fact sound. Nicks remained an independent Ltd Company The cost for this support would be shares in Nicks for Brittons Holdings which Phil and Rob gave up in an equal percentage measure so as to secure the future of the company once more . By February 2013 the deal was completed and the direct benefit to both companies was felt almost immediately and Phil McCormick with the support of the Britton brothers could now look forward to once more rebuilding the Business with a supported investment plan and the reinvention once more of Nicks going forward. Mike and Clive Britton joined as Directors at Nicks but left the management of the company in the hands of the existing team. And Nicks once more finds away through and lives to fight another day !