Alexander Dennis – a case study of how family offices can make serious money from old-economy companies

Scottish bus manufacturer Alexander Dennis was one of Souter Investments’ first deals, plucked out of administration fifteen years ago and sold to NFI Group of Canada for £320 million in May 2019.

Andy Macfie says: “At the time of the buy-out Alexander Dennis generated turnover of around £150 million a year. When we sold the business, sales were more than £600 million. Getting it right was all about appointing the right people, getting the product right, creating a flexible lower fixed cost manufacturing base and internationalising the business.”

Alexander Dennis is now Britain’s largest bus manufacturer and the global leader in the design and manufacture of double-deck and lightweight buses and coaches

He recalls Sir Brian Souter wasn’t always impressed with Alexander Dennis’ products at the outset: “Way back then, Brian would say that when people put ships in the water they didn’t leak, but ADL couldn’t put a bus on the road without water coming in through the windows. His tongue was only slightly in his cheek.”

Macfie was impressed by the way Alexander Dennis’ chief executive Colin Robertson dealt with things by improving Dennis’ engineering skills and product capability: “Colin drove a total change in mindset as far as product, manufacturing quality and customer service was concerned. Sir Brian continued to provide feedback from a user’s perspective.” As you might expect.

Over time Souter lifted its stake from 30% to 45% by buying out stakes held by Sir David Murray, former owner of Glasgow Rangers.

Alexander Dennis is now Britain’s largest bus manufacturer and the global leader in the design and manufacture of double-deck and lightweight buses and coaches. It has worked with a number of technology partners to develop an extensive range of zero-emission electric and alternative propulsion buses for both domestic and international markets, and employs more than 2,000 people, making it one of Scotland’s most important manufacturing businesses.