THE board of Straight plc has agreed a £10.7m deal to sell the Yorkshire recycling products business to Irish suitor One51.
Jonathan Straight, founder and chief executive, told The Yorkshire Post that the deal provides a good opportunity both for the company to grow and thrive as part of a larger group and for him to pursue other interests.
The offer represents a 66 per cent premium on the share price before takeover talks were announced in February.
If shareholders back the deal, Leeds-based Straight will be delisted from the Alternative Investment Market and integrated into One51’s plastics division.
Alan Walsh, chief executive of the group, said: “We aim to support Straight in its growth plans by providing the security of a strong balance sheet and continuing to innovate the business model through investment in technology and machinery.
“The combination of One51 and Straight is an exciting opportunity as it adds considerable breadth, depth and scale to One51’s existing offering, creating a leading specialist injection moulding group in the UK which can then grow into other European markets.”
Mr Straight described the tie-up as a good match. He said: “They are into manufacturing efficiency and they have got very good skill sets in plastics production. We have brand and marketing and all the soft stuff.”
James Newman, chairman of Straight, said the opportunity to join One51 “will bring immediate and long-term benefits to our clients and staff”.
A scheme of arrangement released after Aim closed on Friday evening said One51 has irrevocable undertakings from 48.7 per cent of shareholders. Mr Straight himself has 38 per cent of shares.
He founded the business in 1993 and floated it on Aim in 2003 during a period of rapid growth in which turnover shot up to £25m from £1m.
Straight manufactures waste and recycling containers and employs 130 people, including 90 at its factory in Hull. Turnover last year was £26.1m.
One51 has a portfolio of industrial businesses and is headquartered in Dublin. Its plastics division has a group of injection-moulding businesses in the UK and Ireland and a manufacturing facility in China.
The group’s revenues fell 12 per cent last year to 301.6m euros, although core earnings more than doubled to 10.8m euros.
Mr Straight said One51 has committed to protect employment rights. He will act as a consultant to the group.
He said: “When the deal presented itself I felt it was a good opportunity for both the company to be able to grow and thrive as part of a larger group, which I think it needs, and for me to have some time to pursue some other things and other interests, while keeping a low-level involvement in the business, at least in the short term.
“The price we ultimately agreed, the board felt was a good deal for shareholders so that’s why we have recommended it to the other shareholders.”
He described his time with Straight as “one hell of a journey” and said “it’s not over... this is just a stepping stone”.
Mr Straight is one of Yorkshire’s more colourful entrepreneurs and is known for his waxed moustache, ponytail and large collection of eyewear.
He has also been a strong advocate of social responsibility in business. He said: “Business needs to be a vehicle for social and environmental good. A business can just be a business, but it can also be a business that does good things and makes good things happen.”
Should the other shareholders agree to the deal at the extraordinary general meeting scheduled for next month, Mr Straight will receive £4m from his stake in the company he founded.
He said his charitable trust will benefit from the sale, which will allow it to help more people.
Mr Straight said he is interesting in chairman or non-executive roles at Aim-listed companies. He has been doing some mentoring and will consider investing in start-ups.
At 49, he said he has not ruled out another world-changing venture of his own. “Recycling when I got involved was very marginal,” he said. “It’s not now.”