Lawrence Tomlinson has only exited from one business in twenty five years as an entrepreneur. As he tells In the Know, he was prompted by external and internal interest and the opportunity a sale would provide to focus on another unit within his diverse group.
The first thing that strikes you about Lawrence Tomlinson’s LNT group is the sheer diversity of its activities. From care homes, construction and software through to high performance racing car production, Lawrence has covered a lot of ground during his entrepreneurial career. Put simply, he is clearly not someone who is content to stick to his knitting. "It is a diverse business," he explains. "It’s always been diverse because it is based around the things that I am passionate about."
Having started his working life as an engineer, Lawrence made the jump from employee to business owner when he bought a care home that was previously owned and run by his parents. Trading as TriCare, his company went on to open a further six homes and as the business expanded, Lawrence spotted a new opportunity. "There was a gap in the market for a developer that could build purpose built care homes," he says. The next step was a move into a hitherto unfamiliar industry – namely construction. Further down the line, he established LNT Software (formerly Cool blue IT ), which supplies software systems to care homes.
But Lawrence hasn’t limited himself to care home-related ventures. LNT Solutions manufactures de-icing equipment for the rail, aviation and facilities management sectors and the purchase of the Ginetta car brand in 2005 has enabled him to indulge a passion for high GT race cars. Working within a niche, the company has established itself as a successful manufacturer and its cars can be seen winning races at tracks all over the world.
MAKING AN EXIT
In 2007 he sold one of his businesses – Orchard Care Homes – for £180m in a management buy out. It was an unusual event. Lawrence’s inclination is to build his portfolio rather than sell out but as he recalls, the sale was prompted by interest from trade buyers and the internal management team. "In my twenty five years in business I have only ever made one exit," he says. "But in this case we were approached by a number of trade buyers in 2006 and 2007 and that external interest in the company resulted in the management team putting together an offer."
As Lawrence sees it, selling to management simplified the sale process in that it cut down on the due diligence requirement. And after the sale, the fact that the new owners knew the business inside out meant there was no need for Lawrence to remain actively involved as part of an earn out process. "In MBO situations, you’re not really needed by the new owners," he says.
That was an important factor. One of the main reasons for selling was Lawrence’s desire to free up time and resources to focus on growing the construction business.
MY BIG BET
Which brings us back to that first diversification. Lawrence acknowledges that he is a hands-on owner. Rather than delegating to ‘expert’ managers, he likes to stay firmly in the driving seat at all times. "Today, the company is structured around department heads who report directly to me," he says.
He acknowledges that the hands on approach can be challenging. As a decision maker, the man in charge has to be fully up to speed on the business itself and the industry sector and all the associated technical issues. As Lawrence puts it, "I have a really good team of senior managers. It’s important that I speak the same language and they know they’re not talking to a muppet."
And in that respect, he sees the move from care homes into construction as the biggest risk of his entrepreneurial career, simply because it was the first time he had stepped from the comfort zone of one industry into another less familiar landscape. "The way I approached it was to do as much research as I could," he says. "I read a lot of books and I made sure that I knew as much as I could about what was going on in the sites."
Since then, of course, stepping into unfamiliar territory has been a feature of his career, but it was the move into construction that provided him with a personal route map for transferring business skills from one sector to another.
TOP TIPS
Use exits to free up time and resources to develop key businesses within the group
In diversifying, follow your passions but also look for opportunities for synergistic relationships between business units
When entering new industries, do as much research as possible.
