As a new era dawns for Peter Brotherhood, managing director, Stephen Fitzpatrick in an exclusive interview with deputy news editor Paul Grinnell, explains why he and his colleagues have agreed to sell...
As a new era dawns for Peter Brotherhood, managing director, Stephen Fitzpatrick in an exclusive interview with deputy news editor Paul Grinnell, explains why he and his colleagues have agreed to sell...Just over five years ago – in March 2003 – Peter Brotherhood managing director Stephen Fitzpatrick led a management buy-out to purchase Peter Brotherhood from its then owners, the American engineering company Thermo Electron.
Now, in an apparent reversal of history, the management team is selling the company to another American engineering company, Dresser-Rand.
"We have had five years of tremendous success," said Stephen Fitzpatrick. "Back in 2003, people thought we were crazy buying a British engineering company. They said manufacturing in this country was in decline.
"We have proved them wrong. Since the buy-out we have tripled the 25 million turnover and built up the workforce from 240 people to 360. We have been consistently profitable every year, generating cash throughout that period."
Peter Brotherhood is a world leader in the design and manufacture of equipment for sustainable energy industries. It designs and manufactures steam turbines that produce power from waste heat and from sustainable energy sources such as biomass and also supplies gas compressors that (among other things) help oil and gas companies to process fuel more efficiently. In addition, it has growing interests in renewable energy – including a joint venture with a German company installing wind turbines across the UK and a research project into wave power which is just about to produce its first large-scale prototype generator.
Stephen Fitzpatrick said: "Our focus on clean, green, technologies means that we have been able to exploit the growing market for environmentally sustainable and renewable energy – and that is a market set for considerable further growth.
"To seize future opportunities, though, requires investment.
"As a relatively small, independent, company we would struggle to raise the money that we need. The 'credit crunch' is not helping but, even without that added complication, it would be easier to access capital as part of a larger group.
"Dresser-Rand not only helps in terms of giving us more financial muscle – it adds real value to the business in a number of ways.
"For example, it has service centres across the globe. Supporting our customers worldwide with after-sales service is a major expense. By making use of Dresser-Rand's network we can improve our service to customers without the huge costs that would be necessary to operate such a network of centres ourselves.
"The link with Dresser-Rand also provides greater career opportunities for the very talented group of people we have here at Peter Brotherhood."
Many of those "talented people" are Peter Brotherhood apprentices. At the time of the management buy-out the company had no apprentices at all. Now it has 20 – and the former apprentices from the first years after the buy-out who have finished their training have stayed with the company.
"That is a source of great personal pride," said Stephen Fitzpatrick. "We are building a team with enormous technical skills. Every year the quality of the applicants for apprentice training at Peter Brotherhood continues to rise. We are getting the cream of Peterborough's talent."
The company's growth and success has not gone unnoticed. Dresser-Rand is not the only firm to have enquired about buying Peter Brotherhood.
Stephen Fitzpatrick said: "We have been enormously flattered by the attention we have received.
"At first we turned all the potential suitors away. We were fiercely independent and wanted to stay that way.
"As time went on, though, we began to think more deeply about the future of the business.Where does Peter Brotherhood go over the next decade and beyond?
"The company has been around since 1867 and we want to see it continue far into the future – far beyond the time when we shall have any personal interest in it.
"We began to realise that if we were to provide a firm foundation for that future we would need deeper pockets than we have ourselves. We would need a partner which is willing to invest.
"Dresser-Rand is not only willing to do that, it also brings all the other benefits I have mentioned.
"Of the many companies that expressed interest in acquiring us, Dresser-Rand was by far the best in terms of its fit with our business and I am delighted that it has decided to pursue the acquisition. It is an ideal partner for the future growth and development of the Peter Brotherhood business."
What of Stephen Fitzpatrick himself? Now 58, he has been at Peter Brotherhood since 1988 when he joined as financial controller. He was made finance director in 1991 and managing director in January 2000, before leading the management buy-out team in 2003.
He said: "I am delighted that Dresser-Rand has asked me to join the board of the new company which it is setting up to oversee Peter Brotherhood and to remain as managing director of Peter Brotherhood.
"I certainly have no intention of retiring – I have plenty of energy and ideas to contribute to the continuing growth of the business as part of Dresser-Rand."
Factfile on. . . Brotherhood
Peter Brotherhood was founded in London in 1867 and moved to Peterborough in 1906. It was acquired by Thermo Electron in May 1983 and sold to a management buy-out team led by Stephen Fitzpatrick in March 2003.
Dresser-Rand – based in Houston, Texas – is among the largest global suppliers of custom-engineered rotating equipment for long-life, critical applications in the oil, gas, petrochemical and process industries. These products – centrifugal and reciprocating compressors, gas and steam turbines, gas expanders and associated control panels – are used in oil and gas production, high-pressure field injection and oil recovery, gas liquefaction, gas transmission, refinery processes, natural gas processing, petrochemical production applications and general industrial markets.