Wideblue in Management Buy-out

09 March 06

The specialist design development department within Polaroid's Vale of Leven plant has been bought out by its management team in a six-figure deal.

Known as Wideblue, the department was established as a separate business unit within Polaroid in 2003. It specialises in helping small technology-based companies develop products and manufacturing processes. Initially focused on development solely for Polaroid, the department employed highly-skilled specialists in areas such as physics, electronics, software and mechanical engineering.

As work from its struggling parent company declined, it was decided that Wideblue should be formally established as a separate business unit capable of securing work from outside sources.
"As the work was decreasing, it became harder and harder for us to justify that broad base of skills while remaining competitive," said Jim Hall, chief executive of Wideblue.

As Polaroid's battle against the onslaught of digital photography continued, work from the parent company continued to dwindle to the point that Polaroid is expected to account for just 15% of this year's projected turnover of £1.5m for the current year. Executives came to the decision that Wideblue should be spun off completely, resulting in a new operation with 15 employees

The management team of Hall, Grant King, Russell Overend and Hugh Gill has taken an 80% stake in Wideblue. The other 20% is owned by SpringWorks, the private venture capital firm of Minnesota-based entrepreneur Tom Petters. While Wideblue has ambitious growth plans of its own, Hall is equally excited about the link with Petters, which will see SpringWorks chief executive George Danko joining the board of Wideblue. Hall said Petters had visited Scotland and was impressed with some of the work being done here, and could possibly be interested in making further investments in this country. "One of his biggest (business) areas is in consumer electronics," Hall said. "He is invested in a lot of technology companies that will help him keep ahead in his consumer electronics business."

Wideblue – which was assisted in both the legal and financial aspects of the deal by law firm Harper Macleod – has doubled its turnover every year since it was set up as a separate business unit. Hall said although growth would not continue at that sort of pace, it would remain in double digits. "In an era where there are seen to be few opportunities in Scotland for those with technical manufacturing skills, Wideblue is bucking the trend and building on its proven design and development abilities to secure its future," Petters first came into contact with Wideblue after he purchased Polaroid from Bank One of America in April of last year. The bank acquired the assets of Polaroid in 2002, the year after Polaroid was forced to file for bankruptcy protection with debts of nearly $1bn. The parent company's woes have impacted operations here. Vale of Leven – which makes film and cameras – has seen overall staffing levels fall from some 850 at the beginning of 2001 to about 170 today.

Source: Kristy Dorsey
The Herald

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