We talk to Cornwall Group’s chairman, Mark Mitchell, about why the company is on the acquisition trail.
At the beginning of December 2023, Cornwall Group acquired Birmingham-based Forward Glass, which stood out as the Group’s most substantial deal to date.
“We’ve made no secret of the fact that we are willing to talk to glass company owners who are looking to leave the industry – most likely to retire – but want to leave their businesses in safe hands so their employees are looked after,” said Cornwall Group’s chairman, Mark Mitchell.
“People are well aware of some of the options available to them out there, such as private investors, which may offer an attractive initial price, but don’t necessarily have their eyes on the long-term health of the business.
“Cornwall Group, on the other hand, is family owned, and we make investment decisions based on what we expect to see in five years’ time – which is typically beyond the horizon for many investors.”
The negotiations leading up to the purchase of Forward Glass were believed to have taken much longer than the average acquisition, but Mark says he was in no rush to see signatures on the dotted line.
“Forward Glass is the Midlands’ largest independent toughened glass manufacturer and stock distributor, and will continue to trade under its own name,” continued Mark. “It is a great fit for us, and we would rather spend time getting the details right, rather than rushing into it and repenting at our leisure.”
Mark explains that the business is very similar to Bristol-based Mackenzie Glass, which Cornwall Group bought from Pilkington Glass in 2017. It is an independent, family-owned business, selling single toughened, processed glass and stock to the trade.
“Forward Glass has a turnover in excess of £10m a year, employing over 100 people and, looking ahead, we have plans to broaden the offering,” Mark said. “It has three toughening plants, which brings the total at Cornwall Group to eight.
“Forward’s typical customers are sealed unit manufacturers, traditional glass merchants and shop fitters. This is an area where we have a lot of experience, so it provides the perfect opportunity to expand our operations beyond our traditional base of the South West.”
For many businesses in the glass industry – as well as the wider construction industry – acquisitions are currently low down on their list of priorities. With the cost of borrowing still higher than desired and high inflation making it difficult to price projects realistically and competitively, anything other than the most urgent spending plans are largely being put on hold.
“It is a General Election year (which always causes a certain amount of instability in the markets); inflation is still double what it should be; cost of borrowing is high, energy costs are still double where they were two years ago; the cost of labour is set to rise considerably; and many companies will be approaching the end of their tax years uncertain if they have made any serious profit,” said Mark.
“I understand why many companies are either putting spending plans on hold, or even looking to sell. But I would argue: can you afford not to invest?
“The decision to buy Forward Glass was made months ago, and it fits our medium to long-term strategy. So, it was always unlikely to be derailed by small economic blips. In fact, we are already committed to buy new plant and machinery at the Birmingham site, and we will be introducing an apprenticeship programme. This will make us stronger for when the market improves in a year to 18 months’ time.
“What’s the point of not investing, and trying to weather a difficult patch, only to be unprepared for when the increase in demand materialises?”
This is a strategy that Cornwall Group is already following across its other sites. Recent investment across Cornwall, Devon and Somerset include: a new sealed unit line, a new heat soak oven, and a new cutting table, to name just a few.
“If you order a new toughener, then it will take a year to arrive, and a new purpose-built lorry will take at least nine months,” Mark explains. “So, you’ve got to be one step ahead.
“That is why we bought Forward Glass, and that is why our door is always open to new opportunities – not just in the South West, but right across the country.”