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1961: UK competitor is bought out
In early summer 1961, as well as the deal to take over Pergamon's Soviet publishing contract, Monty was preparing to purchase his only real UK competitor.
Ronald Armstrong, formerly of ICI, had founded Technical Information Company in his home territory of Birkenhead, across the river from Liverpool. His Patents Abstracts had shorter summaries than Derwent's -- two or three lines -- but more professionally typeset and expensively advertised, aiming for a more popular and less specialist appeal. Maintaining in addition a London base near the Patent Office, Armstrong's costs were relatively high and he was now ready to sell the publication and concentrate on other interests.
He was including in the deal a lucrative contract, yielding some £2,000 of annual profit, for the supply of copies of patents (British and foreign) to East Germany.
Dated 26 May 1961, the deal was worth an eventual £19,330, massively assisted both by deferred terms and by the presence of nearly £10,000 in the coffers as pre-payments from East Germany. Specifically there was:-
(a) Deferred payment of £7,800 in respect of British Patents Abstracts (which had sales of £13,224). This sum to be paid in seven yearly instalments, from 31 December 1961.
(b) Immediate payment of £4,918, comprising as follows.
£1,500 for German Patent Abstracts (sales of £6,021)
£1,500 for Russian Patents Abstracts (sales of £3,418)
£1,918 for the Patents copy business (which had a profit margin of 37.5%)
(c) In addition six monthly instalments of £1,102 each, starting 31 July 1961, as a consultancy fee to Armstrong.
The deal did require Derwent to continue to supply customers for the remaining six months of their subscriptions, but as Monty's memoir notes puts it succinctly, "we turned his customers into ours."
The other aspect of the deal was that relevant Armstrong staff transferred over to Derwent. Mr Wickardt and Miss Newey in particular went on to become stalwarts of the company, playing important roles.