ENTREPRENEUR John Watson made about £15 million from the sale of his label-printing business to US giant Multi-Color Corporation, it has emerged.
Mr Watson, at the time the sale of Glasgow-based John Watson & Company was announced, described it as a “serious multi-million-pound” deal but the price was not disclosed.
The price paid for the Scotch whisky label specialist is revealed in notes to the accounts of MCC, and represents an impressive exit for Mr Watson given the huge challenges faced by the printing sector in recent decades.
Mr Watson earlier this month presented a cheque for £100,000 to Glasgow Chamber of Commerce for the organisation to invest in helping growing young businesses in the city.
The latest available accounts for his former company, which has now been renamed Collotype Labels, show that it has continued to perform well under its new ownership, with staff numbers holding steady.
In its annual report for the financial year to March 2015, MCC details the price paid for John Watson & Company and emphasises how well the firm fits with the Clydebank-based Labelgraphics business it had acquired previously.
MCC says: “On October 1, 2013, the company acquired John Watson & Company Limited (Watson), based in Glasgow, Scotland, for $21,634,000 less net cash acquired of $143,000. Watson is the leading glue-applied spirit label producer in the UK.
“The business is ideally located for its key customers and is complementary to MCC’s existing business in Glasgow (formerly Labelgraphics), the leading pressure-sensitive wine and spirit label producer in the same region.”
MCC’s accounts show that the purchase price of $21.6m included $8.5m of estimated “contingent consideration”, based partly on John Watson & Company’s earnings for the year to March 2014. And they indicate that additional “earn-out” payments totalling about $1.4m, on top of those anticipated, became due to Mr Watson largely on the basis of a better-than-expected performance by the business that he sold to MCC.
The latest available accounts of John Watson & Company, now Collotype Labels, show that the company achieved a rise in turnover to £11.6m in the year to March 2014 from £10.3m in the prior 12 months.
Pre-tax profits came in at £678,492 in the year to March 2014. This was down from £788,023 in the prior 12 months but well ahead of the pre-tax profits of £278,070 posted by the business for the year to March 2012.
And the accounts show that the average number of employees in the year to March 2014 was unchanged from that in the prior 12 months, at 84.
Stuart Patrick, chief executive of Glasgow Chamber of Commerce, earlier this month paid tribute to what Mr Watson had achieved with a family printing business founded by the entrepreneur’s great-great grandfather.
In a column in The Herald, Mr Patrick wrote: “John Watson sold his family printing business … so that he could retire. He led that business for 48 years through some of the most dramatic technical challenges printing has faced since its invention over 500 years ago. It hasn’t been an easy business life.
“Since retirement he has been making several large donations to causes he feels are important to his family and to the city.”
Referring to Mr Watson’s presentation of the cheque for £100,000 to the chamber at its Glasgow Business Awards dinner held on October 1, Mr Patrick added: “As he presented the cheque to chamber president Vic Emery, he drew on the example of Andrew Carnegie as his personal inspiration. He felt keenly his own responsibility to give back to society from the gains of a successful business career. Amongst the business folk of Glasgow, I know he is not alone.”
Mr Watson chose to specialise in labels for the drinks sector, principally Scotch whisky, having done large amounts of printing work for US computer giants such as Compaq and Motorola in the 1980s and big oil industry players in the 1970s.
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