Pearce optimistic after £9.2m MBO

The Pearce Group has been bought by its management for £9.2m from Crest Nicholson.

The management buy-out (MBO) was led by Pearce Retail managing director John Rackstraw and group finance director Tim Leigh, with backing from Lloyds TSB and Anvil Partners. Anvil director Richard Youngman will join Rackstraw and Leigh on Pearce's new board.

Pearce employs 626 staff and generated a turnover of £184m in the year to 31 October 2002. It posted a £3.3m loss after a £1.1m exceptional charge due to the closure of M+W Pearce and several loss-making contracts (since rectified).

Pearce will continue to work for Crest Nicholson's commercial property and mixed-use development business.

Pearce comprises five businesses: Pearce Retail has a £75m turnover working for Asda, Sainsbury's, Waitrose, Somerfield, Safeway, Marks & Spencer, Debenhams and the Co-op; Pearce Leisure (£20m); general contractor CH Pearce (£60m), which includes Pearce Health, part of the Medicor consortium bidding for ProCure 21 contracts; and two Pearce Construction divisions in Barnstaple (£14m) and the Midlands (£15m).

Rackstraw told CJ he expects the group to exceed a turnover of £220m this year. He said Pearce will be concentrating on its niche specialisms; and he believes the company can generate £120m to £150m from the retail and leisure sectors.

While the MBO will lead to some restructuring, Rackstraw expects Pearce to be a net employer.

Pearce was founded in 1922 and merged with Crest Nicholson in 1985. Rumours of the MBO first emerged earlier this year (CJ 13 March).

"We've been looking forward to this deal for some time. The ambiguity is [now] out of the way. We're in control of our own destiny," said Rackstraw. "We need quality people to go forward."

Cox Homes, previously part of Pearce, has been retained by Crest Nicholson. Former Pearce managing director Don Ross has left.