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BY STEVEN VASS

JIM McColl was racing to do the biggest deal of his life before the world economy fell apart. It was early September and the chairman and chief executive of engineering group Clyde Blowers had not slept properly in a fortnight, having spent a week in Boston and a second in Glasgow in marathon negotiations with American counterparts. Confidence was collapsing everywhere as former bulwarks like Lehman Brothers, HBOS, Fannie Mae and Merrill Lynch plunged in value. Nobody had ever seen anything like it, and if he and his team couldn't conclude a deal soon, the whole thing would surely fail.

His target was the industrial division of US defence and aviation conglomerate Textron, which included worldwide businesses in industrial pumps, gearboxes and hydraulic equipment. A whole year had passed since McColl, who is next year expected to be crowned the richest man in Scotland, had originally approached the Rhode land-based group. Almost everything that could have gone wrong had gone wrong in between.

His advisers, his wife and probably also common sense had told him to walk away, but he was still at the table, plotting against cash-rich counterbidders, determined not to lose. His stock had already soared in his native Scotland thanks to his £48 million rescue of Weir Pumps the year before, but pulling this off would transform his company into a serious global player.

Originally, he explains, Clyde had only been interested in Textron's Union Pump business, a US leader in making centrifugal pumps for industries including oil, gas and power generation. The existing Clyde/Weir Pumps business was already strong in three of Clyde's priority markets - Europe, China and India - but lacked muscle in the US, which was its fourth.

"From its base in Cathcart in Glasgow, Weir Pumps serviced the whole world, but that's an outdated model," says McColl. "You have to have manufacturing and sales and marketing outlets in all the markets you are serving."

But if this was to be the first target of the £225m venture-capital fund that Clyde had raised to break from raising cash on a deal-by-deal basis, there was a major catch. Textron was not prepared to sell Union as a stand-alone operation. Any deal would have to include the entire industrial division, which also included David Brown Gear Systems and David Brown Hydraulics, respectively based in Huddersfield and Poole in England, and Maag Pump Systems of Oberglaat, Switzerland, which makes reciprocating pumps for industries such as plastics and rubber.

The four businesses comprised an initially intimidating 47 subsidiary companies in 20 countries, yet when the Clyde men looked more closely, they decided they all met their acquisition criteria. They were all engineering businesses that were involved in either oil and gas, power or water/waste water; they all had the potential to move from being businesses with international profiles to being truly global in the way that McColl envisaged for the centrifugal pumps; they all made things that were at the core of industrial processes; and they all had lucrative after-sales markets.

In January, the Textron board decided they were prepared to sell, but they rejected McColl's request for exclusive negotiations.

He says: "You want to do a lot of due diligence but because you are spending a lot of money, you certainly don't want gazumped by anyone else," he says.

The total price of the due diligence was £20m, but they decided to go ahead nevertheless.

"That's where the entrepreneurial spirit comes in, or stupidity, if you want to put it that way," he laughs.

This was only the start of the problems. Originally Clyde had been dealing with just one bank to raise the money, but confidence was now so low that it needed four, and even then the amount the banks offered was about £100m short of the original target. The traditional private-equity model sees banks lending about 75% or 80% of the money for a deal, but the best Clyde could hope for was 45%. The remainder would have to come from McColl and his nine other private investors, and about three-fifths of that from McColl's own personal wealth.

Houston's SCF Partners agreed to take 30% of Union Pump, having been a substantial investor in the rest of the Clyde pumps business, but the deal's other partners proved more awkward. An investor for the gear systems business, who McColl will not name, had become so risk averse since the credit crunch that he had to cut them out of the deal.

At the same time, falling asset values forced McColl to go back time and time again to propose new clauses that made the deal less attractive to Textron.

"Whenever we had tough discussions, I insisted on doing it face to face in Rhode Island rather than by a conference call. You have to be sitting with people to sell an idea to them. In all, I went there about 10 times," he says.

The money markets were so bad by the summer that Clyde couldn't raise the last £28m, which forced him to propose that Textron accept a loan note, effectively asking them to invest in their own sale. Even the advisers, which included KPMG, Ernst & Young and Dundas & Wilson, told McColl to give up.

By the time he was in Boston in September selling his plans to Textron's pension trustees, everything was coloured by the fact that nothing would work without the approval of the US, French and UK governments, who were all customers of the division. There were also at least one, possibly two counter-offers from other interested bidders that could well be higher than Clyde's. If the Scottish noses were in front, it was only because they were proposing to keep the company's US operations open while the others were apparently not.

"Textron was trying to get us into a position where we couldn't back out, but right up until the last minute you always have to have a possible exit," he says.

By the time McColl returned to Glasgow, the markets were in free fall and any number of his advisers probably thought he was destined to fail. Yet in the small hours of Thursday, September 11, the final contracts were signed and the champagne corks erupted at the offices of Dundas & Wilson in Glasgow. Clyde Blowers was buying the Textron industrial division for $640m (£436m), or around $1 billion once you threw in working capital and bonding, one of the biggest deals done anywhere in the world in the second half of the year.

"We signed three days before Lehman Brothers went down," he says. "How lucky is that? It would have made concluding a deal a much tougher challenge if we hadn't signed by then."

The deal completed in November and McColl has spent the past few weeks shuttling between continents, outlining to local managers Clyde Blowers' growth strategy. The whole business currently turns over £1.2bn, with profits at between 10% to 15% in each division, but McColl is aiming to grow several times larger in the medium term. In pumps alone, which now turns over about £400m, he is targeting fivefold growth in the next five years.

With Tom Hunter thought to have been among the biggest losers in the past 12 months, McColl is expected to be unveiled as Scotland's richest man in next year's Sunday Times Rich List, having an estimated fortune of £800m.

McColl, a good friend of Hunter, refuses to comment, saying that he finds it "embarrassing". Although one senses that part of him may enjoy the pre-eminence more than he is willing to admit, he says: "I am apprehensive about what it might mean, how people might react. Some people treat you differently and you don't want that."

But that is for next year. Even emperors must have a moment for reflection. In a year where much of Scottish business was battling in darkness, Clyde Blowers' Textron deal will be remembered as the brightest light around.

2008 FLASHBACK: INEOS - NORTH SEA ON ITS KNEES

MEDIA-shy he might be, but memories of floppy-haired billionaire Ineos boss Jim Ratcliffe arriving to jeers at Grangemouth in April will last long after the year is out.

A 48-hour strike by 1200 workers over plans to close the final-salary pension scheme to new employees at the oil refinery might have sounded like a storm in a teacup, but it grew much more serious when it emerged that the adjacent BP Kinneil plant depended on the site to keep the Forties pipe-line open from the North Sea.

The pipe went down for a number of weeks, halting 40% of North Sea oil production and 25% of gas production. It demanded emergency fuel shipments to Europe to plug shortfalls at Scottish petrol stations and cost the industry £600 million in total losses - reportedly the costliest industrial dispute ever to hit the country.

A fierce war of words was relayed by the media, as the unions claimed that Ineos was scaling-back pension provisions in the name of corporate greed.

Ineos insisted the company had to modernise to stay competitive and threatened to switch a £200m investment plan to another European site if they didn't get their way.

While Unite and Ineos have been locked in talks ever since, the noises coming out of the refinery group have been increasingly negative.

The company that rapidly grew to a reported turnover of £23 billion by buying up the downstream hydrocarbon sites that the oil majors didn't want is said to be creaking under its £5.9bn debts now that credit is harder to come by. It is negotiating new terms with its creditors in parallel to the union talks, and the outcomes to both discussions are likely to make front-page news in the new year.

2008 FLASHBACK: SALMOND SAYS YES TO TRUMP

AMERICAN billionaire Donald Trump was never far from the headlines once the appeal hearing over his proposal for a £1 billion golfing extravaganza on the Aberdeenshire seafront began in June.

Having been rejected by the local council the year before, the plan for two golf courses, a 450‑bedroom hotel, 960 timeshare apartments and 500 private houses had to wait six long months before a decision finally came.

For those on the left, it was the test of whether the SNP government would ride roughshod over natural heritage and the common man in favour of big business; for business, it was about whether it was as committed to reforming the unwieldy Scottish planning system as it claimed.

A coalition of the country's five biggest business groups - CBI Scotland, Scottish Chambers of Commerce, the Scottish Council for Development and Industry, the Federation of Small Businesses and the Institute of Directors - joined forces to support the development.

Nicol Stephen, then-leader of the LibDems, protested about the "smell of sleaze" after it was revealed first minister Alex Salmond had helped set up meetings between Trump's people and Scotland's chief planner, but CBI Scotland's Iain McMillan warned that unless the planning system was changed Scotland risked alienating other high-profile international investors.

In November, the business interests won the day. Donald Trump is now busy turning Menie House in Aberdeenshire into one of several family homes and work on the rest of the development is now under way.

All has turned out as he hoped, except the 23 acres of land owned by local fisherman Michael Forbes. Even after planning was granted, he refused all the deals offered to him by the US billionaire. Trump might just have to write it off as the one that got away.

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