TGL: Potential Judges Scientific23 Jul 2016 20:50
Former shell JDG, a 25-bagger, is a good lesson in what can be some desirable RTO traits: i.e. a niche business, exporting, that owns the intellectual property:
"Judges Scientific: the precision instrument maker that came about by chance
David Cicurel explains how he built a �100m scientific instrument group after stumbling across a sector boasting 2,000 UK companies
By Alistair Osborne, Business Editor
6:00AM GMT 17 Dec 2013
� He began examining different types of deals and, among the dozens that came his way, he found one particularly �puzzling. It had �3m turnover and �750,000 operating profit, with 19 staff. It looked too good to be true.� It was FTT.
He met the owners, �an engineer and a scientist, who were both looking to retire. They explained they had a dominating position in a tiny world niche and that the drivers of the business were regulation and globalisation.
�I thought that�s a really good business to have if you have little money, you can still be powerful,� he says. �It�s better to be in a little principality and you�re the prince than competing with big empires when you don�t have the wherewithal to do that.�
Cicurel, who owns 15.6pc of Judges, wondered if FTT was a �unique thing�. So he did his �homework and found there are 2,000 companies in that sector, just in the UK�. Not only that. They export almost four-fifths of what they make.
FTT became the first of 10 acquisitions in the sector, together costing just over �30m.
... Judges� strategy, he says simply, is �to find good companies, very nichy, and pay down the debt. We probably see about 50 deals a year and engage seriously with three to five. They are not family businesses. I think people start them at 40 and sell them at 60. We�re normally buying because the people are getting old and want to retire.�
He always looks for certain things: a manufacturer that �owns the intellectual property�, that sells instruments scientists buy and that has good profit margins and strong exports. �If you are not exporting a lot, you are not meaningful in a world niche,� he says.
Judges� main rivals are far bigger companies - Spectris, valued at �2.7bn, Halma (�2.1bn) and Oxford Instruments (�925m). But Cicurel ensures he has enough cash on the balance sheet to move fast on a deal, topping up the funds in October via an �8.1m placing, following the Scientifica deal.
He points out too that his big three rivals have also �done very well. I shouldn�t say this but in our sector it�s not terribly difficult to do well � though it is easy to do badly. There�s a lot of rubbish out there, you have to be really selective.�
Smiling he adds: �It�s more like mining diamonds than
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