A SCOTTISH company started 26 years ago by a former railway conductor with a £300 loan from his mother was sold yesterday for £80 million.
Alan McLeish left school with no qualifications and after a series of low-paid jobs in 1992 he persuaded his mother to lend him the money to start Lanarkshire-based rail contractor QTS.
Yesterday McLeish, 58, was counting his millions after Renew Holdings PLC announced it had acquired the company for £80m in cash. It remains “primarily owned” by McLeish and his family, according to the new owners.
The firm has been built from scratch by McLeish. Based at Drumclog in South Lanarkshire, the specialist contractor provides railway services such as vegetation management, civil engineering, rope access and plant fleet hire.
Managing director McLeish will stay with the company as it becomes part of the Renew Group, which is based in Leeds.
No redundancies are anticipated among the 300 permanent staff – the firm intends to expand its business when it becomes part of Renew.
QTS has enjoyed year-on-year growth in turnover since 2012 and last year had a turnover of around £70m, making gross profits of £19.8m.
It also has a productive relationship with Network Rail, which accounts for 80 per cent of its revenue.
The company is also well known for its involvement in sponsoring young athletes and recently extended its shirt sponsorship of Kilmarnock FC until 2020, which will make QTS the longest-serving shirt sponsor of the club.
The rail contractor is also heavily involved in the Kilmarnock Community Sports Trust, with commercial director Phyllis McLeish a founding trustee or the organisation.
Renew said it bought the firm to “increase Renew’s market share, footprint and specialist positioning in the rail market, a market with high barriers to entry.” The buy also “adds complementary services to the existing group’s rail offering.”
Renew, which will partly finance the purchase with a share issue, said in a statement: “The experienced and strong operational management team of QTS are being retained to continue to drive the business forward under Renew’s ownership.
“In line with Renew’s operating model, the QTS brand will be retained and the business will operate as a standalone subsidiary, with group oversight and support.
“The business has a directly employed workforce of more than 300, which is supplemented through the use of contractors as demand dictates – a very similar operating model to Renew.”
Commenting on the sale, McLeish said that the deal will provide opportunities to expand the company’s market share.
He said: “QTS is delighted to be joining the Renew group and we very much look forward to the future as part of a larger group.
“It was important to attract an owner with relevant expertise to support our growth ambitions without compromise to customer service or staff loyalty – the Renew business model fits perfectly with these aspirations.”
Renew’s chief executive Paul Scott said: “We are delighted to welcome the management and staff of QTS to the Renew group.
“This is a very complementary and earnings enhancing acquisition that aligns with our established and proven strategy, strengthening our position in the UK infrastructure market.
“QTS has grown to become a leading and well-respected brand in the rail sector and we very much look forward to supporting its ambition for continued growth.”
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