Dyno-Rod float down the drain after founder refuses to sell

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The Independent Online

The flotation of Dyno-Rod, the famous drain-clearing business, has collapsed after its founder refused to sell.

The flotation of Dyno-Rod, the famous drain-clearing business, has collapsed after its founder refused to sell.

Jim Zockoll, the former transatlantic pilot who set up the business in 1963, told the planned new management team yesterday morning that he was pulling out of the deal.

His decision came even though the consortium, Dyno Group, scraped together the full £60.5m asking price after a frantic round of investor meetings on Thursday. Dyno had been planning to float on AIM immediately after acquiring Mr Zockoll's business, which has expanded in recent years from drains into plumbing, locksmithing and rat catching.

The Dyno camp was mystified as to Mr Zockoll's reasons for ending talks after 18 months. One rumour in the City was that he had received an offer from overseas. Mr Zockoll was not returning calls yesterday.

Kevin Mahoney, the former British Gas executive who would have run Dyno Group, said he was hugely disappointed. "I am proud of the fact that we raised the money in difficult market conditions, and disappointed at having fallen at the final fence. But when you are dealing with a private seller, who has a different landscape and different criteria, these things happen." He added that he was sorry for the franchisees and employees who had committed £1m of their own money for stakes in the floated company.

Dyno Group had planned to list two days ago, but Seymour Pierce, its broker, was struggling to raise Mr Zockoll's long-standing asking price and had to postpone.

It was only late on Thursday, after additional equity investors emerged, that the full £60.5m was achieved, through a combination of equity and debt financing.

Mr Zockoll asked to think about the deal overnight and yesterday informed Dyno Group through an adviser that he was walking away.

The 74-year-old American founded Dyno-Rod after flying over electromechanical machines used in the US to unblock a drain at the London hotel used by Pan Am pilots. He and his family own 85 per cent of the company, with the remainder shared among more than 20 former stewardesses, pilots and mechanics who were his colleagues at Pan Am.

Dyno-Rod has annual revenues of £56m across its 167 franchises, generating £12m of franchise fees and £4.5m of earnings, before interest and tax, for the central company. Mr Zockoll had previously said he would use the sale proceeds to invest in Phonenames, a venture run by his son, Steven.