Friday, 2 December 2011

24th E/MBA club event with Paul Wong, MD UK Bosch security systems

by Paul Israel November 2011

Thanks for Paul Wong EMBA01 support!


I thought I knew Bosch, I was wrong…

Bosch is everywhere... 60% of Bosch may be in automobile components, but this is just a bit of the story.

My new-founded respect for my extra-ordinary Bosch hedge-trimmer reflects a lot of what Paul Wong (EMBA 2001) told us on the 18th October in the EMBA club.

In a lively, highly inter-active presentation, with a fair dose of humour, Paul described the M & A process that Bosch security division went through in acquiring the UK/ Canadian company Extreme CCTV.

It was a surprise to us all, that Bosch was the fourth largest R and D spender globally and second in Europe through its 320 companies, and 281,000 employees, just under half of whom are in Germany, and 4,920 are presently based in the UK, including Paul's division - Bosch Security. Perhaps most surprisingly, like the giant Swiss Wilmsdorf Foundation (Rolex and Swatch), Bosch is 92% owned by a charitable foundation, really allowing it to think long term in its approach, though clearly it thinks and acts as a profitable organisation.

Bosch aims for 8% annual growth, of which 3% is to be by acquisition and 5% organic growth, which Paul says since the 2nd world war it has consistently achieved.

Paul was happy to report his appropriate use of CASS acquired skills (IRR/ NPV etc) on the valuation process in the Extreme CCTV acquisition, and the way Bosch grows by acquiring various young companies where through its in-built resources; it can offer scalability, economies of scale and global reach. Bosch also needs no external advisors as it has a very sophisticated in-house M and A division.

Extreme had a very interesting range of CCTV products, and Paul described how Bosch can "age' products in their lab to test for durability, they rebuilt the product so it could offer better scalability. Paul was frank in the aftermath of the recession in 2008 much of the supply chain for Extreme CCTV's units was in chaos and this was one element of due-diligence that could have been better.

We were handed around two very heavy products to see, ranging from £2k upto £25k these are the cameras to "watch over us" predominantly by the police and councils.

Paul also showed many of the new products coming soon, devices in your Mercedes that tells the car what the speed limit it, if it is slipping lane and helping night vision that seemed extra-ordinary and additionally security devices that covered fences and alas no stop parking spaces that will automatically hit you with a ticket! Perhaps most remarkable was the technology for the police that could quickly scan footage for say a red car, saving countless hours of work, and potentially lives in searching for terrorist suspects.

Paul concluded by saying in the fourth year, after re-designing the core extreme products it was now hitting positive cash-flow and delivering the full value it promised.

Cass resident M &A guru, Scott Moeller - of course - led on the entertaining questions.

Next time I am in the garden easily addressing any weed problems through my Bosch mini- hedge trimmer, I can be safe in the knowledge that the product testing and development can only have been second to none...


Fellow City/Cass MBA who fancies joining future E/MBA club:

more pictures:

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