I took a call last week from a colleague who had recently seen a report in the financial press that the publicly listed SAI Global had accepted a take-over offer from Hong Kong based private equity firm, Baring Asia Private Equity. The buyout is worth some $1.1 billion, subject to Foreign Investment Review Board (FIRM) approval.

You and many of your industry colleagues on Standards Committees have blindly worked hard over the past decade or so to increase value to this organisation (value creation is one of those great phases these global bankers love to drop in conversation) – most likely at the expense of personal business time, effort and family!

The story goes that the Baring chief executive flew into Sydney, ticked off the deal, whopped a sumptuous lunch and head off back to Honkers within 24 hours.

I’m not sure that your personal/industry effort and value-add was ever one of those tick boxes.

The world of Standards Australia and SAI Global is a complex one and I am constantly amazed at how few senior people across the building and construction sectors really know how it all works.

Standards Australia is controlled by 75 member organisations, such as Master Plumbers Australia, National Electrical and Communications Association, Australian Window Association, HIA etc… and is responsible for the creation and development of all Standards documents across all industry sectors.

Hark back 15 years or so and the Australian government took advice (probably from a merchant banker) to split the roles of Standards development (the boring hack work) and the marketing of the Australian Standards that were produced or updated.

That all sounded great when the public float took place.

Standards Australia received funds from the equity-raising to invest, and then re-use the dividends to assist with funding the ongoing business of developing relevant Standards documents across Australia’s societal and business needs.

SAI got a sweet-heart deal and gained the exclusive marketing rights with the obligation of a small commission on sales paid back to Standards Australia.

SAI also set the retail price of the Standards for the market.

Everyone was pretty green at the time and Standards documents were still mainly published in print back then. However times do change.

Beyond its Standards marketing and Quality Assurance/Certification business (the process of auditing factories, here and overseas) and burgeoning property settlements business for the big banks, SAI started to grow an international base which eventually outgrew the core business, somewhat aided by takeovers.

In more recent time, local industry has come to realise that the marketing ‘clip’ being passed back to Standards Australia is not within cooee of what similar arrangements are in other countries. In fact it’s probably 75% below what is accepted in similar schemes globally.

That means things may get a bit messy given the current marketing deal between Standards Australia and SAI reaches its sunset in 2018. However, Though SAI has a five-year option to renew at ‘market rates’ – it may be a rocky conversation.

No doubt the new SAI owner has taken this into account – and there is a suggestion that they may well hive-off the Standards publishing side of the business.

Fortunately Standards Australia anticipated the need for change some time back.

In recent months it has announced a large investment in a digital platform that will ensure better use of member’s time in developing/updating Standards and help put the organisation back in more control of the marketing of the Standards documents, whatever form that might take.

Standards exist for the common good, be that in building and construction, medical devices or baby cradles for cars.