Organic Growth Masterclass: Excelsior, backed by ENACT private equity

Chris Cormack, partner at ENACT, explains how strengthening the team and working more closely with existing customers has helped flexible packaging business Excelsior power ahead.

Excelsior is a flexible packaging business which was acquired by Enact in 2014. When they invested it had two manufacturing sites, one in Deeside, North Wales and the other in Nelson, Lancashire. At both sites, significant capital investment had been made.

Chris Cormack, partner at ENACT, says: “When we first looked at the business, it had been adversely affected by a number of factors. The first was it had lost a key customer and turnover had dropped by c.20-25 per cent. It was also making losses north of £1m; the foreign exchange rate was impacting the business; the overhead efficiencies in the operation were poor and there was a lot of wastage. All of this led to severe cash pressures on the business and a damaged ethical reputation.”


Chris says: “At investment, the business was largely being run by interims and the CEO and finance director had departed. Keith Chapman joined as the executive chairman and acted as CEO of the company. We had a strong sales director, who remained with the business and knew the product range well. Initially we appointed an interim finance director, who quickly made sense of P&L reporting and cash management. We later appointed a full-time finance director. We brought in an interim operations director, who we managed to tempt to stay full time. He was able to significantly add to the profitability of the business.”

“We also appointed new people to the sales team and promoted existing members, who were not getting the support they needed to develop. The existing commercial manager stepped up to play a key role in reducing costs and improving margins.”


Chris says: “We looked carefully at the product groupings and broke them down into separate categories: technical films for food; higher margin products such as pouches; medical packaging and packs for microwave ready meals. Although Excelsior had lost a major customer before we invested, it also had another major customer - Pinnacle Foods, based in America. Pinnacle Foods was using existing Excelsior intellectual property in the form of a valve system incorporated into Birds Eye ready meal packaging. A key to the business’ growth was growing the Pinnacle Foods relationship and integrating Excelsior into their operation by understanding their needs. We worked to produce a better product in terms of quality and delivery than they were able to get from local packaging suppliers in the US.”

“From this, we grew overall sales turnover from £33m to around £40m. At least 50 per cent of the sales growth came from our partnership with Pinnacle and Birds Eye in the US.

We also invested c.£150,000 in a new product development centre and we employed five to six people at any given time to develop new products for the business. With this, we were able to convince Pinnacle and other customers that we were the partner to develop new products with.”


Chris says: “Before our investment, the business was quite dated in terms of how it manufactured its products. We introduced a programme of lean manufacturing improvement in the factory, which involved applying Japanese, Toyota-style manufacturing techniques, utilising Kanban and just in time (JIT) methodology. This enabled us to improve on time in full delivery (OTIF) to 95 per cent and to reduce scrap and stock levels.”