Bill Lynch, the man who made Imperial Holdings (JSE:IPL) into one of SA’s top three industrial companies, died today, aged 64, after a short battle against cancer.
Just over a year ago Lynch won the World Entrepreneur of the Year Award in Monaco. The award recognised an extraordinary career in which he steered a company from an initial market capitalisation of R35m to a high of R36,7bn last year.
At the time he won the award, retirement was far from Lynch’s mind. He always said he would work until he no longer could. Last year he stunned Imperial directors, staff and shareholders by stepping down for health reasons.
Hubert Brody was appointed CEO in his place. Les Boyd was earlier appointed non-executive chairman.
Executive director Tak Hiemstra said: “This is a very sad day for us. Bill has been very ill but we are still shocked.”
Lynch, who bought 10% of Imperial in 1973, was one of the country’s richest men – and among its greatest generators of shareholder wealth. Imperial grew earnings and assets for every one of the 29 years since its listing, usually surprising investors on the upside -R10 000 invested when Imperial’s shares listed on the JSE in 1987 became worth R2,3m in 2006.
In December the company made its first negative announcement. It said it would close its aviation and its Tyco trucking division, entailing “substantial” write-downs. It said the motor dealerships are experiencing difficult times and that the insurance company is suffering as the equity portfolio takes strain. First half headline earnings would decline by 15-25%. More detail will be published at the interim in February.
Hiemstra said there was no connection between Lynch’s going and the sudden deterioration in the company’s fortunes.
“It would have happened even if he had been here.”
Imperial today employs nearly 40 000 people and has a market capitalisation of R18bn. Through the innovative Ukhamba Trust, Imperial also conceived one of the most successful initiatives for broad-based black economic empowerment.
Imperial Holdings has seven divisions (integrated logistics solutions; fleet management; vehicle and forklift leasing; aviation operations, sales and leasing; car rental and tourism; motor vehicle importation, sales and after-sales services; and related financial services).
Chairman of the nine-member independent judging panel of the World Entrepreneur of the Year award, Sunil Bharti Mittal said, “Bill is the epitome of an entrepreneur – he started with nothing, but he grew an amazing business over thirty years, and today makes a huge positive impact in South Africa. He does that not only through the jobs he creates but also through the training, education and other community support Imperial provides.”
Said Ernst & Young Chairman and CEO James S. Turley. “Bill’s story is a classic one: he started from humble origins and through hard work and smart diversification built a multi-billion dollar international business.”
Lynch had only a village school education and a love of business from the day he began work in a garage in rural Ireland.
In 1971, aged 27, Lynch came to South Africa with his wife Ann, £2 000, no job and few prospects during a worsening recession. He joined Imperial Motors, a car dealership losing R120 000 a year. Lynch led a turn-around, applying disciplines that were second nature to a manager raised in poverty.
He led a growth strategy, with diversification into truck hire, logistics, car rental and leasing.
Imperial listed in 1987 at 9c a share versus R86 today. In 1990, Lynch became Imperial’s executive chairman and showed his faith in SA’s future by driving further expansion, transforming the core Toyota dealership into a multibrand network, among other initiatives. At the time, many predicted SA’s descent into political and economic collapse. In 1998-99, Imperial expanded offshore, buying Thyssen-Krupp’s European logistics business and moving into aviation leasing.
Colleagues said Lynch kept things simple. He believed in commitment and selflessness. He was frugal to the point of tight-fistedness.
Moneyweb’s Alec Hogg asked him what made him seek a new life in South Africa?
“My ambition and deprived background were critical. I was not satisfied with what I had. That is the foundation for any entrepreneur.”
Lynch told Hogg: “Universities teach a lot of things, but what they don’t tell students is how to actually get on with it. Take the positive approach. Don’t hesitate. Do it.”
He adds: “Many people talk too much. Entrepreneurs are men of action. You have to be prepared to embarrass yourself. That requires humility. And don’t be afraid to start small. I’d much rather put R50 000 into a new business than R50m. But there’s nothing wrong with starting small.”
Lynch said “sweat equity” can never be under-estimated. All his life he worked 60 hours a week, and usually took papers home: “Reading my business matters is as attractive to me as any book.”
The right home environment is just as important: “My family have always supported me fully. They have never complained about spending too much time on business and too little on them. That removes a lot of unnecessary pressure.”
But perhaps the best insight into Lynch the businessman comes from the people surrounding him. Financial director Hafiz Mahomed was spotted by Lynch when he came in as part of the audit team: “After a few years it wasn’t hard to see Hafiz was much smarter than the audit partner. But we couldn’t poach him from our auditors. That’s not ethical.”
But after hearing Hafiz had left the profession and joined Union Carbide, Lynch made it his business to keep in touch. A year later Mahomed called to say he wasn’t happy at the chemicals group and wanted to join Imperial. That was back in 1982. He continues to play a key role in the business today.
Similarly Carol Scott, the car hire queen was hired to head the new Imperial Car Hire business partly because she was angry at being turned down for a managerial position at Avis.
Lynch set a long-term goal of having 100 vehicles in the new car hire business. Scott achieved the target in a matter of months. That was in 1979.
Another close lieutenant, Hiemstra, joined Imperial in 1992. As a merchant banker he’d been advising the group for years. So when he made a decision to leave financial services, Lynch was the first person he called.
Imperial never uses headhunters, Lynch says, because buying into the group’s rather unique value system is far more important than the apparent skills and quality of a prospective employee.
Lynch leaves his widow Ann and a son, Neil, who works at Imperial.