Rigging sector is in for a lift

RIGGING SECTOR IN FOR A LIFT

Axel Johnson International recently announced the expansion of its global capabilities within the lifting segment with the acquisition of five Australian companies. Interestingly for the local rigging and lifting sector, this is the first time Axel Johnson International’s Lifting Solutions business group has ventured into the Australian, New Zealand and Pacific markets.

THE ACQUISITION INVOLVES FIVE LOCAL

lifting companies – The Rigging Shed, Lifting Victoria, Elevate Lifting & Rigging, Schillings Hoisting Equipment and On Call Lifting.

Together, the companies have 10 sites strategically distributed across the west, south and east part of Australia and will form a group under the leadership of Steven Flint, currently the Managing Director of the largest company in the group, The Rigging Shed.

With approximately $40 million in sales and 125 employees, the companies provide lifting and rigging equipment and related services. Their success is built on strong product knowledge, solid local relationships and a diversified customer base. Today, the companies are affiliated through an organisation called the Global Lifting group where the companies collaborate within purchasing.

Cranes and Lifting magazine spoke with Steve Flint to discuss the background to the development and better understand what the crane sector can expect to see following the acquisition.

“There is an interesting back story to the development. The owners and shareholders of The Rigging Shed, Lifting Victoria, Elevate Lifting & Rigging, Schillings Hoisting Equipment and On Call Lifting were are all in a similar position. We were operating businesses which were privately owned and not necessarily family-owned businesses. And collectively we realised that we were coming to the end of our time with the businesses,” he said.

Flint discusses The Global Lifting Group, why it was started and how the collaboration between the participating businesses has benefitted customers and the industry in general

“The Global Lifting Group was established in 1997 by what was then four small to medium sized businesses. They were seeking to increase their purchasing power in order to be competitive with the major lifting and rigging equipment suppliers operating in the Australian market.

“The Global Lifting Group was able to take on more purchasing power and pass on better pricing to our customers. Where possible, we have looked to work together on projects but combining of resources was not really designed to service national crane companies for example, as each business has continued to trade independently.

“During conversations with the various business owners, it was apparent we all had a similar outlook. We had spent many years building the businesses, they were successful, and we had built excellent, customer focused teams around us. But we were also beginning to see that we needed an exit strategy, and we didn’t have a succession plan in place,” said Flint.

The new structure will provide the same level of service to crane businesses operating across multiple states including many of the multinationals.

The group went about formulating a structure to generate interest from potential purchasers explains Flint.

“We engaged a mergers and acquisition firm called EP Advisors and they put together the required documentation and worked on preparing the consolidated figures and other required information. We then went out to market with the proposal. A number of private equity businesses and even individuals expressed interest, and we were also approached by a number of industry type businesses including Axel Johnson International,” he said.

Axel Johnson International expressed interest early. Flint elaborates on the reasons for the move into the Australian market.

“Axel Johnson International is looking for growth and they were looking for successful businesses to acquire and help facilitate this growth. They are also wanting to retain the people, the mentality and the culture of the businesses which has led to their successes.

“Axel Johnson International tend to leave acquired businesses to run relatively independently from the head office because management sees the value in local knowledge. Although there is likely to be some rebranding in the future, at the moment, our focus is to retain the local identities of the businesses and to continue to provide our customers with the best products and service possible,” he said.

Flint explains the reasons why the member companies of the Global Lifting Group have been successful over a long period of time and how the market has responded to the development.

“The businesses involved in the acquisition have very similar philosophies with a very strong people and customer focus. The key to our success is the people within each of the organisations and our dedication to customer service.

“The feedback from the market has been very positive. From our perspective, the team at The Rigging Shed hasn’t heard anything negative, and we haven’t had customers or suppliers contacting our organisation with concerns about the development. Our customers know they will continue to receive the same levels of service and support with the same people dealing with them,” he said.

In time, there are likely to be some changes to the products as the acquisition develops and Axel Johnson International begin to introduce more product from other markets. But the market has been very strong for the Global Lifting Group for some time, and this is likely to continue says Flint.

“Over the coming months there will be additional products and brands which customers will have access to. At the moment, the market is very confident and demand is very strong.

“Across the various states, we are seeing plenty of activity in various industry sectors including infrastructure build, particularly on the Eastern Seaboard, and in resources, renewable energy and construction in general. Obviously, COVID is providing significant challenges to the way we operate, and this includes delays in our supply chains, but we are working through these,” he said.

“If this isn’t the biggest development in our particular market sector it must run a close second. When you consider the Bullivants business has been bought and sold several times during my 30 years in the industry, this has to be up there with industry developments.

“One of the major benefits is we will now be providing the same level of service to crane businesses operating across multiple states including many of the multinationals. Other benefits include the career development opportunities provided to our employees.

“As business owners and also managers, there has tended to be a ‘glass ceiling’ when it comes to providing talented people with opportunities to progress within the businesses. We are already seeing this change with the removal of ownership and management allowing people to grow into newly expanded roles and positions.

“An obvious benefit is the vast amount of technical and industry knowledge we are now able to access on a global level.

“It is a significant step forward for the industry to have an international corporation like Axel Johnson now represented in the Australian market,” said Flint.

The businesses involved in the acquisition have very similar philosophies with a very strong people and customer focus.