The main reason was a "perceived conflict of interest" which made some independent manufacturers fear that entering into a supply agreement with Upperpoint would mean their products having to compete with Baxall’s. Following a review, Upperpoint Group announced it would be demerging its subsidiaries into two separate entities.
Upperpoint Distribution Ltd will incorporate Norbain SD, Alarm Express Portugal and Reditron. Upperpoint Manufacturing Ltd will become the holding company for Baxall.
Alun John , Chief Executive of the Upperpoint Group, said one year on from the management buy out they had carried out a review which saw the logical creation of two holding companies.
"The main driving force was the perceived conflict of interest. Some independent manufacturers were reluctant to enter into supply agreements with the Upperpoint distribution companies because they believed their products would compete with those manufactured by Baxall, even though over 65 per cent of product sales are from third party manufacturers.
He added: "On the flip side, Baxall has faced concern amongst third party distributors that they are disadvantaged by comparison with Norbain." There were also different levels of investment and personnel skills required for manufacturing and distribution.
Upperpoint Distribution would be extending its range and Upperpoint Manufacturing would be introducing new products. Both were "more than likely" to benefit from the acquisition of related manufacturing and distribution business in the UK and abroad.
