MD who reached Nirvana stays on acquisition road

Apr 16 2008 by Aaron Boland, Liverpool Daily Post

Alistair Houghton meets WILF BOARDMAN, managing director of Mechan Controls

HE’S just secured a takeover to treble the size of his business, but Wilf Boardman says Mechan Controls will stay switched on to any new takeover opportunities.

Skelmersdale-based Mechan makes electronic switches that can automatically shut down machinery in certain circumstances to ensure the safety of people using it.

The majority of its products are used on conveyor belts or food processing lines, such as the Heinz canning plant in Wigan, but Mechan switches can also be found in the London Eye and on the Big One rollercoaster in Blackpool.

Last month, Mechan bought Staffordshire-based Nirvana Engineering, which supplies storage for back-up power systems.

The reverse takeover will see Mechan’s turnover soar from under £1m to almost £3m. The group now employs 34 people.

Boardman, Mechan’s managing director, says the company has long been on the look-out for acquisitions, and will keep looking out for potential opportunities.

He said: “This is our first acquisition, but not the first we’ve looked at. We’ve been looking out for some time and we’ve been down a few cul-de-sacs. We are actively looking at the acquisition route.”

Mechan’s products might be used on a food processing line to ensure a fast-moving production line automatically switches itself off when a worker checks products on it, meaning staff will not get injured.

Boardman said: “Donkeys years ago, you would have used a simple padlock. But that is cumbersome and awkward. Now we have non-contact switches that don’t interfere with the process so that when something goes wrong the power is cut to the moving mechanism.

“You might be on a packing line with cans or boxes coming towards you.

“There will be various stations along it for fine-tuning or checking. Each station will have a safety switch to stop people saying ‘I can’t be bothered stopping the line’ and so putting themselves in danger.”

Mechan’s products are sold throughout the world, and its next major export push will be to the emerging Balkan markets.

Boardman is particularly proud that Mechan switches are exported to the technological hotspot of Japan. “We’re an electrical manufacturer in sunny Skelmersdale and we’re selling to the Japanese,” he smiled.

Newly-acquired Nirvana makes racking systems for Uninterrupted Power Supply (UPS) systems, which provide back-up power in the event of electricity network failure.

Nirvana’s racking, shelving and storage systems are used in environments such as oil rigs to secure the power packs to ensure a continuous electricity supply even in extreme weather or after a natural disaster.

Boardman said: “They have to be very secure and protected when they’re used on something like a North Sea oil rig. The equipment has to withstand collisions or earthquakes – in Siberia, it has to withstand 10 on the Richter Scale.

“Nirvana’s work is different from what we already did at Mechan, but it’s still about safety and security – that’s our overriding scheme.”

Nirvana will stay in Staffordshire, but Mechan group HQ will stay in West Lancashire.

“We at Mechan are very much a Skelmersdale business, and will continue to be so,” said Boardman.

“This will be the command module. But Nirvana will stay in Staffordshire as it is.

“The value of a company is in the skills of its people. You cannot just shift that about and nor would you want to.”

Mechan floated on the Plus exchange, then known as Ofex, eight years ago. Boardman says the company was keen to float so employees could share in the wealth of the business, but said the cost of an AIM flotation would have been prohibitive for such a small company.

“Firstly, we wanted an independent valuation of our shares,” he said.

“Secondly, we wanted that valuation to be transparent.

“Thirdly, we wanted a trading facility so that employees can trade those shares.

“Fourthly, we can use share incentives. It means people are not just working for good wages but are participating in wealth generation in the company, which is my idea of enlightened free enterprise capitalism.”

The health and safety industry is one that is sure to grow, said Boardman, as the rest of the world looks to match the high standards of UK legislation.

“It’s a robust industry and one of the few that’s growing on a global scale,” he said. “It’s driven so much by safety legislation, which was started in this country then continued to Europe and now the rest of the world is playing catch up.

“Emerging economies are moving into manufacturing for export and all their product has in theory got to be made under the same safety conditions as here. That’s driving the industry’s growth.”

Over the last eight years, Mechan has grown at an average rate of 12% a year. Boardman says the company’s concentration on its niche market and its focus on developing new hi-tech products means it can stay ahead of the competition.

He said: “We spend a lot on research and development because that’s the only way we can keep that leading edge. Because it’s a niche, we can stay there.”

Boardman, of Preston, started his career as an apprentice mechanical engineer and spent 25 years as an engineering consultant.

He was also part of a team that bought Blackburn-based electrical engineering firm Park Naval Engineering, selling it on in 1982. He first heard of Mechan and its “blue-chip” reputation through networking, and in 1999 helped pull together a team to launch a buy-out /buy-in deal. The team included Peter Knowles, son of the company’s former boss, Ron Knowles.

Boardman said the new management team realised the company needed to change if it was to thrive.

“It was a one-product company,” he said. “That product was the Rolls-Royce of the business, but if people didn’t want that Rolls-Royce we were finished.

“We invested in product development and expanded the product range.

“People who wanted the Rolls-Royce could still have one, but they could also have a Ford Cortina.

“We continue to offer that full range of solutions to the market. That’s brought us strong growth.”

Now Boardman is determined that Mechan will continue growing and challenging the market leader.

“We are number two in this country – number one is Guardmaster of Wigan,” he said. “There’s quite a gap between them and us, but we’re chipping away at them.”

alistairhoughton