The best right-hand man in Irish business
In his twilight years, leading Irish businessman Michael Smurfit has found a new vocation as a commentator and author.
Mr Smurfit earned his place in the spotlight. He survived TB as a young man before transforming the family paper and packaging business into an international organisation.
Today, Smurfit Kappa has revenues of over $9bn (€8bn) and a global workforce of 45,000.
Mr Smurfit has many qualities but, as he acknowledged in an interview with the magazine Decision in 2016: “The Michael Smurfit of his 40s was a difficult man. I didn’t like myself and I don’t think many liked me either. I was too self-centred,” he said.
But Mr Smurfit had enough cop-on early on to recognise that he needed a strong individual by his side as he set out to transform the family business, one which fell into his lap following the death in 1977 of his father Jefferson.
As early as the late 1960s, he recognised that if the business was to have a future in a world opening up to free trade, expansion was the only option.
Enter Howard Kilroy, a genial figure with self-control and analytical skills.
Mr Kilroy and Mr Smurfit had things in common. Neither went to university, though both received a private school education. Each followed his own path, though both had business in the blood.
Mr Smurfit was sent into the family business at the age of 16. He was happy to work his way up. He always acknowledged that this on-the-job training was of great assistance to him as he added to the family empire by way of acquisition.
The young Mr Kilroy — whose death has been announced at the age of 83 — came from a Methodist background. He grew up in the middle class Dublin suburb of Clontarf, playing cricket in the lane behind his house with his brother, Norman. Howard was later a keen yachtsman.
He left school to train as a chartered accountant, going on to work for a subsidiary of food multinational CPC, before being hired in 1972 by Smurfit, which was gobbling up print and paper rivals across the country.
Mr Kilroy was not the first outside professional to join the team, but he soon became the key player alongside Michael Smurfit.
The Smurfit/Kilroy combination stood out by the late 1980s, by virtue of the prominence of Jefferson Smurfit Corp as a transatlantic plc with a go-ahead corporate culture, at a time when Ireland appeared to be, in the words of Gay Byrne, ‘banjaxed’.
The company’s headquarters in Beech Hill, Donnybrook, had a space-age feel about it.
Smurfit led the way in its use of high end professional advisers and in its abilities in financial engineering, which had yet to become a dirty word.
In 1986, the company hit pay dirt when it acquired 50% of Container Corp of America from Mobil Oil in a joint venture with the Morgan Stanley leveraged equity fund for $1.2bn. The previous year, it was ranked number one out of 1,000 top US companies in earnings growth.
There followed a flotation of the group on the Nasdaq exchange and the £682m acquisition of St Gobain which catapulted the group to centre stage in the continental European paper industry.
The achievement should be viewed in context. Ireland has tiny amounts of forest cover and a small paper and packaging industry relative to the leading countries.
Mr Kilroy believed in bringing on young talent rather than stifling it, and favoured growing your own from within.
Mr Smurfit was a genius when it came to spotting opportunity and hunting down corporate prey.
He could quickly spot the value of both plant and people in acquired firms. The company was also quick to offload useless assets and subsidiaries.
The funds raised were typically reinvested in the business.
Mr Kilroy was at ease with bankers. He served on the ‘Court’ (board) of the Bank of Ireland, taking over as governor in 1991 after the bank got into difficulties in the US. The company avoided the pitfalls when it came to capital raisings.
The disastrous failure of the GPA flotation exercise was not repeated.
In a sense, Michael and Howard were an odd couple with skills that complimented each other. People joked about Mr Smurfit’s occasional eccentricities and tendency to be brusque.
This was never more apparent than at times when the group was out of favour with the public during periods of share price under-performance.
Mr Kilroy was more genial, but there was a steely core. While close associates cannot recall him ever losing his temper, he reminded people they “should not confuse being nice with being soft”.
He could admonish the media fiercely — in particular when his business brother-in-arms had to stand down as chairman of Telecom Éireann after disclosures over property transactions.
Howard Kilroy was no perfumed aristo, but the man had class.
