A lasting legacy

A lasting legacy

Trace the roots of IT giant TSG deep into its past and you’ll find a family-run shop near Gateshead, where a teenage Mark Joynson first learned to sell under his father’s gaze.

TSG, the rapidly-growing North East tech firm is invariably associated with the tale of what Sage co-founder Graham Wylie did next. But a lesser known yet no less important yarn buried within the fabric of the business is that of the Joynson family.

Their office supplies shop in a small town in the North was the acorn out of which the £45m oak tree grew. And here to tell the story, over a sizzling curry on a rainy Thursday afternoon, is Mark Joynson, currently serving as TSG’s regional managing director.

Joynson left school aged 16 on a Friday with ambitions of a military career. By the following Monday he was working for his father’s business in Whickham. At least there was some degree of militancy, though, with his new boss refusing to employ him on a full salary, instead paying him £25 per week on a YTS arrangement.

“I got to know the business from the ground up and learnt all aspects of the entire organisation. In the early years I was a junior sales person and learnt the ropes. My dad is one of the best teachers we ever had, with my brother Peter joining at 16 three years after me.”

Then, as what Joynson recalls as a “really tight-knit family business” grew, so too did its appeal to potential suitors. In 1988 the business was snapped up by a national plc, a shrewd move by Joynson senior given the looming recessionary years of the early 1990s.

The company’s new owner was later acquired by Pentos, which owned stationery giant Ryman at the time. And, after four years of being run from afar, the opportunity for the Joynson family to fly solo once more was forced upon them.

“Pentos couldn’t get the concept of giving credit to business-to-business customers as opposed to retail, which was their core business. We got the opportunity to buy the business back right in the middle of the recession 1992 so we did, but we had to cut our cloth accordingly.

“We had too many staff at the time and had some tough decisions to make. We let people go, some of which were family members, so that was a really difficult time for us. But we had to keep the business going.

“We cut some costs and had to make profit to sell as much as we possibly could to our customers – but our customers stayed very loyal to us.”

When the fire-fighting finally ended, the Joynson empire emerged from the smoke with a new-found, forward thinking outlook. “We were doing office equipment but, as things progressed, we were selling typewriters, then word processors and then PCs, which gradually became more affordable.

“So we just morphed into a technology firm. We totally diversified in the mid-nineties and decided technology was going to be the way forward. We took the route of selling Pegasus accountancy software as well as Sage and we were quite unique at the time because we were doing hardware and software.”

Then came the Millenium Bug – or rather it didn’t. “The world was going to implode and a lot of customers were changing their systems and we were very busy at the time.

“We had to make sure our customers were clued up to what was going to happen. The software vendors were telling us what might happen, as were the hardware vendors, and there were a lot of system refreshes to get ready for the big day.”

But when the clock struck 12, directors Mark and Peter and their father, the MD, were not chained to their desks wincing at the prospect of a technological meltdown.

In fact they were celebrating the completion of a deal which saw the two brothers assume complete control of the business, with their father getting the exit he was looking for. “We basically bought the business from my dad and dropped office equipment out of the name. We became 50% shareholders and set a plan out of what we were going to do with the thing.

“We’d grown it to £2m turnover, it was profitable and my dad had a nice lifestyle out of it, but it was time to kick on. The deal went through on New Year’s Eve.”

The acquisition of rival firm Mill House Computers and further organic growth helped to take the company to around the £4.5m-a-year turnover mark by 2003 – but the ambition was to grow further. Enter software tycoon Graham Wylie.

“Graham had left Sage and so we approached him about joining us as a non-exec director to help us realise our ambitions and go on a journey. He asked us to give him some time to relax after working for Sage, but in the next meeting we had, he said ‘I don’t really want to come on your board as a non-exec director, I want to buy your business’. And we nearly choked on our pasta.”

The company was only three years into its 10-year plan at the time, having built up a 45-strong workforce. “It was a very profitable business and a good sized IT reseller but we were purely North East. Graham sold us the grand plan and his idea to create a national IT solutions provider that was going to be £50m-a-year, and then £100m.

“When the offer was on the table, the key thing that swung it was how exciting it could be in the future and so we decided to sell the business lock stock and barrel on October 13th 2003.”

That he remembers the exact date is hardly surprising given that he clearly still lives and breathes the business. But the deal was no speedy affair. “Negotiations are always tough with Graham,” he says smiling.

“It took us about four months to conclude the deal and it was quite a tricky period because we were trying to maximise our profits while providing a shed load of information to the lawyers and also negotiating what we wanted to sell at. But we got a great price for the business.

“My dad told us to do what we wanted as it was our baby now. It was a big decision and the type that you only make once but the key is that it just felt right.”

And Wylie’s vision nine years ago was certainly no conjuring act dreamt up to entice the Joynsons into a sale. Today the company is already at around the £45m-a-year stage in terms of turnover, having been a prolific acquisitor by adding close to 30 firms to its portfolio since Wylie’s intervention.

“Graham invested a lot of his wealth into TSG and then wanted to acquire more Joynsons throughout the UK. In the first year we were doing one acquisition a month and it was just a really exciting time.

“In the early stages I had a part to play to ascertain whether the acquisitions were the right fit and had the right individuals and structures in place but now we have an entire team that does that under the direction of chief executive David Stonehouse.

“In some instances the MDs of those companies asked me what it felt like on that side of the fence. And all the ones I spoke to sold out to TSG. When you do sell your business, you’ve done things your way and the biggest challenge is that the new company owners do things in a different way and some people find it difficult to adapt to. So some MDs are no longer in the business.”

Despite other business interests, the Sage co-founder is still in the business, acting as chairman, and remains a close adversary to Joynson. It must have its perks, BQ suggests, being a keen golfer and a pal of the owner of one of the region’s top courses, Close House.

“Nah. Graham gives me money and I just give him it straight back,” he says through laughter referring to his golfing membership and also his participation in Wylie’s new fitness business, SpeedFlex.

Joynson was member number one at the new Jesmond gym business which opened this year and promises to spread a new fitness phenomenon across the UK. “Because I’m so busy it’s a really quick fix to losing loads of calories,” he says as we prepare to gorge ourselves on a calorific feast.

And the membership fees he pays out to the Wylie corporation are perhaps countered by the rent TSG pays on its Team Valley office, which is owned by Joynson. Meanwhile, although Joynson’s dad has long since retired, he still remains a trusted source of advice to him, meeting as they do every Friday to “chew the fat over a pint”.

But aside from Mark and his brother Peter – who today continues to serve at regional director level within TSG – the Joynson name is prominent in other areas of the business too.

“A lot of the people from the Joynson’s business are still here today which is lovely to see. All my management team as they were are still in TSG. My mum worked for us in credit control until she retired a couple of years after we sold.

"My sister Sam has worked there pretty much since she left school as a sales administrator and my son Ben works in the warehouse – or UK logistics as he calls it. My uncle also works here, as well as my cousin who’s been with us since he left school. So there’s a lot of the old school still in the business,” he says.

Customers have also remained loyal to what started out as the Joynsons family shop before its meteoric rise to national prominence.

“We’ve kept hold of the majority of our customers. I’ve a customer today who I used to sell typewriters to who we now sell sixfigure technology networks. It’s nice when you get that kind of continuation.”

Joynson admits he’s not a product person but a commercial one – hence his ability to make the seamless transition from selling typewriters to high grade technology. He says: “For me the concept of IT is very, very simple. The customers just want it to work and they don’t want any downtime. It does happen from time to time but it’s about how you react to it.”

Areas of growth for the firm in terms of technology include customer relationship management systems, Microsoft’s collaboration software Sharepoint and the growing clamour among firms to adopt cloudbased practices.

Currently around £11m of its £45m-a-year sales come from clients in the North East, with around £7m being generated in Scotland and £5m coming from each of the Midlands and North of England.

“There are quite a few areas we’d like to grow into – we’ve got to grow in London,” he says, though moving the HQ there would never be considered he adds. TSG also remains firmly gripped to the acquisition track.

“We’re very lucky in the sense that we don’t have any bank borrowings and luckily we’ve got an owner who is more than happy to continue to fund the business. We’re very privileged to be in a position where we don’t have to rely on the banks to lend us cash to acquire businesses.

“Whilst we have a list of targets we’ve also got a much bigger list of people who are willing to sell to us. “So there’s plenty of opportunity for us to grow to twice the size of what we are both organically and in terms of acquisition.”

Doubling in size would see the firm become almost a £100m-a-year empire; a far cry from its origins as a family shop in Whickham.