In April 2013, Dorchester Pacific Limited, a New Zealand based finance and insurance business, bought a 20-per-cent share in NZX-listed Turners Auctions. By getting a seat on the board it believed it could gain a better understanding of the motor vehicle auction business and how its own finance and insurance interests could fit into Turners Auctions’ operations.
Paul Byrnes, the CEO of Dorchester at the time, says what the Dorchester board members saw was not only a well-performing business but a platform for significant further growth of the wider group. Subsequently, in August last year, Dorchester launched a NZ$82-million cash-, scrip-, and bond-funded takeover for 100 per cent of the Turners Auctions business.
“We realised that if the acquisition was successful we would end up owning two listed entities—Turners Auctions and Dorchester Pacific Limited—whereas we wanted delisting synergies,” Paul recalls. “Fortuitously, while we had been on the board, Turners Auctions had undertaken some marketing with focus groups, looking at what the Turners brand represented to stakeholders. The Turners name has been around for over 100 years; it has great heritage based on integrity and trust—and plenty of goodwill. In the end, it was a simple decision to take it on. While we were proud of what we had achieved as Dorchester, Turners had this value proposition we just couldn’t ignore.”
The Turners Auctions acquisition marks the latest chapter in what has been a remarkable turnaround for Dorchester. It follows acquisitions of debt recovery business EC Credit, and motor vehicle finance company Oxford Finance in the past three years. Dorchester was one of very few New Zealand finance companies to survive the GFC. The improved financial metrics since it emerged from a self-imposed moratorium speak for themselves; from negative shareholder funds of NZ$20 million to current shareholder funds of around NZ$130 million; from a trading loss of NZ$2 million to a profit of NZ$20 million for the current financial year; and an increase in market capitalisation from NZ$1.5 million to around NZ$180 million currently.
It’s been a fascinating time but certainly not unfamiliar territory for Paul, who has been at the helm of Dorchester and now Turners as CEO and deputy chairman. With more than 25 years’ experience in senior executive roles, he has managed his fair share of buyouts, mergers and acquisitions, and turnaround projects, and he gives more than just his skills and expertise to each assignment.