The Cutting Room

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Their old employer and current nemesis Mark Ryan has thrown in the towel, leaving 20:20 Mobile now lagging behind in top management expertise.

You can bet Rod Miller (Brightstar European president) and Rob Baxendale (UK MD) have been cracking open the Cristal.

Baxendale especially probably can’t believe his luck. Ryan was the instigator of next month’s court case to stop the former working for Brightstar, as he was allegedly in breach of his exit terms from 20:20.

Ironically, it is now Ryan who probably can’t work in the mobile industry for up to a year. Not that he would necessarily want to – the 20:20 CEO ‘done good’ during the Caudwell years and has amassed a fortune of some several million.

Doubtless he will spend some of his ‘gardening leave’ polishing his £500,000 collection of Italian motor exotica.

In fact, the only thing surprising about Mark Ryan’s departure from the 20:20 Group was the time it took him to escape the clutches of Doughty Hanson.

You didn’t have to be a Harvard Business School graduate to work out that the maverick entrepreneurs who flourished under John Caudwell’s regime were never going to cut it with the private equity culture which puts P/E ratios and City sentiment well above the ability to cut a quick deal to snare and ship 100,000 N95s in a day.

The question mark is not over Ryan’s decision to leave (it turns out he never really wanted to stay after the change in ownership anyway). No, the real mystery is what Doughty Hanson actually thought they were buying into.

At the time of the negotiation with John Caudwell, wise industry leaders scratched their heads trying to work out how Doughty was reaching its sky-high valuations.

Apart from the stock and goodwill value, what yardsticks was Doughty using to value the business? Had they been avid readers of Mobile News they would have realised 20:20’s success was down to a ruthlessly ambitious leadership which had the connections and trading brains to spot and exploit opportunities on an hourly basis.

The ability for managers and directors to leverage their local and international connections and do instant deals was paramount.

Private equity groups like Doughty Hanson are more concerned with the rate of return on their investment, with one eye on the inevitable initial public offering and eventual exit route.

One can only speculate on the frustration Ryan must have felt about having to justify his activities to the Men In Suits who had little understanding of the cut and thrust of handset distribution and fulfilment and the hoops that he had to jump through.

His departure will have caused considerable consternation at Doughty Hanson; a private equity partner really buys into an effective management team with relevant experience.

The cornerstone of Doughty’s strategy was the understanding that Ryan and his team would significantly increase its revenues and capabilities via expansion in the USA and other European markets.

So far, all that has materialised is the acquisition of Swedish distributor AxCom.
Ryan’s departure now throws into question the entire strategy of acquisition and expansion. Put simply, who is left to identify and conclude acquisition opportunities?

 

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