00:00:12:09 - 00:00:15:09 Welcome to the Amazing, the podcast for acquisition entrepreneurs,

00:00:15:09 - 00:00:18:12 search funders and how co builders across the UK and Europe.

00:00:18:12 - 00:00:19:29 In this by slide breakdown segment,

00:00:19:29 - 00:00:23:03 we roll up our sleeves and real life SMB listings,

00:00:23:03 - 00:00:26:31 unpacking the numbers, servicing hidden risks and hunting for the upside.

00:00:27:00 - 00:00:28:25 But you are lining up your very first offer

00:00:28:25 - 00:00:30:21 or adding to the next bolt on for a growing hole.

00:00:30:21 - 00:00:31:30 Co pull up a chair.

00:00:31:30 - 00:00:35:31 This is why we stress test opportunities and listings into lessons.

00:00:36:00 - 00:00:39:27 I am joined as ever by my captivating co-host, Gareth Hawkins,

00:00:39:29 - 00:00:42:22 CEO of Biz Crunch, and serial acquirer.

00:00:42:22 - 00:00:45:18 How are you, Gareth?

00:00:45:18 - 00:00:46:31 good, thank you. I'm flattered.

00:00:46:31 - 00:00:49:31 I'm not sure I'm that captivating, but you're very kind

00:00:50:00 - 00:00:50:29 and how you could be this week.

00:00:50:29 - 00:00:52:04 I think I'm very well.

00:00:52:04 - 00:00:54:11 Well, we went for effervescent last time, so I'm just

00:00:54:11 - 00:00:56:19 going to give you a different compliment. Every episode.

00:00:56:19 - 00:00:59:02 I'm keeping my toes different.

00:00:59:02 - 00:01:00:29 Yeah. Yes, I'm doing very well.

00:01:00:29 - 00:01:01:06 Thank you.

00:01:01:06 - 00:01:03:12 I'm excited for another by side breakdown.

00:01:03:12 - 00:01:05:19 The last time we did it was our first episode, obviously,

00:01:05:19 - 00:01:06:23 and it went really well.

00:01:06:23 - 00:01:10:27 People seem to really enjoy it, so I'm excited for episode two

00:01:10:30 - 00:01:11:27 as a lovely message is

00:01:11:27 - 00:01:15:17 actually through LinkedIn and the likes from

00:01:15:20 - 00:01:18:16 longtime listener first time caller

00:01:18:16 - 00:01:21:28 were quite keen on the change of format.

00:01:21:28 - 00:01:24:28 So yeah, let's see if we can keep a streak going.

00:01:25:00 - 00:01:25:20 Absolutely.

00:01:25:20 - 00:01:29:29 Well, before we dive into that, Gareth, can you kick us off with the news?

00:01:29:32 - 00:01:30:26 Yeah, sure.

00:01:30:26 - 00:01:33:11 Well, another busy week.

00:01:33:11 - 00:01:36:11 Seems it will be happening in Spain at the moment.

00:01:36:12 - 00:01:41:00 So is three news items about Spain that will be well run through.

00:01:41:00 - 00:01:44:26 But target capital,

00:01:44:29 - 00:01:48:17 which is a Spanish search fund led by Diego Canale is Delgado.

00:01:48:17 - 00:01:51:07 And Nicolas Romo will tell

00:01:51:07 - 00:01:54:26 close their search phase and their cap table is pretty impressive.

00:01:54:26 - 00:01:58:16 You've got JP 46, Coco Capital, Ithaca.

00:01:58:19 - 00:02:02:17 You've got Cabeus, a capital six venture capital Partners

00:02:02:17 - 00:02:07:02 and a large number of high net worth individuals that are participated.

00:02:07:02 - 00:02:12:28 So really nice to see Targus, another Spanish shirt fund getting off the ground.

00:02:12:30 - 00:02:13:22 Lots to go at.

00:02:13:22 - 00:02:16:07 Their thesis takes them all the way across southern Europe.

00:02:16:07 - 00:02:21:29 So looking forward to hear which deals they take down over the next year or so.

00:02:21:31 - 00:02:23:03 Congratulations Horgos.

00:02:23:03 - 00:02:26:06 Well, my niece is also from Spain, so Lowry Partners,

00:02:26:06 - 00:02:29:06 who are Spanish Aerospace and defense focused search fund,

00:02:29:13 - 00:02:34:02 have a quite good smile who are precision machining company based in Barcelona.

00:02:34:05 - 00:02:38:26 It sounds to me a lot like a vertical acquisition of a key supplier.

00:02:38:29 - 00:02:41:14 Yeah, I think from looking at it could do quite a lot

00:02:41:14 - 00:02:45:33 in the defense space, you know, very sensible to secure that supply chain,

00:02:45:33 - 00:02:50:11 I think given where the world has unfortunately been heading.

00:02:50:13 - 00:02:53:25 Yes, the less said on that, the better.

00:02:53:28 - 00:02:56:04 It's quite tough, I'd say.

00:02:56:04 - 00:02:58:10 Any more news.

00:02:58:10 - 00:03:01:01 Yes. Sorry.

00:03:01:01 - 00:03:04:10 No wistful laments about global politics.

00:03:04:10 - 00:03:07:10 Yeah. Okay. Come back to message.

00:03:07:14 - 00:03:11:09 Yeah, definitely is so something that's kept me interested

00:03:11:09 - 00:03:16:08 This week is reading the latest edition of such Fun Squid from Moonbase Capital.

00:03:16:08 - 00:03:18:17 It's my series, so we'll put a link to it in the show notes.

00:03:18:17 - 00:03:22:09 But this time they focused on

00:03:22:09 - 00:03:27:03 Konstantin Marek and Nicole Kaminski of Lynx Trail Capital,

00:03:27:06 - 00:03:31:09 who are one of the leading pioneering search funds in Poland.

00:03:31:12 - 00:03:34:11 The really interesting stuff in in their profile

00:03:34:11 - 00:03:38:24 that I'd recommend to the listeners like reading.

00:03:38:27 - 00:03:39:14 Very interesting.

00:03:39:14 - 00:03:40:05 Yeah, we'll share that.

00:03:40:05 - 00:03:41:02 And I actually haven't read

00:03:41:02 - 00:03:45:02 any of the search on squids here, so I'll have to do some catching up.

00:03:45:05 - 00:03:46:01 Yeah, better.

00:03:46:01 - 00:03:47:17 Obviously good authority on this.

00:03:47:17 - 00:03:48:21 They've invested in quite a lot.

00:03:48:21 - 00:03:52:27 They've been really improving accessibility of search funds to investors

00:03:52:27 - 00:03:56:30 and, you know, the commentary on certain funds that they have backed

00:03:56:30 - 00:03:59:18 or that they've been looking at has been quite, quite enlightening.

00:03:59:18 - 00:04:00:25 So yeah, good series.

00:04:00:25 - 00:04:02:24 Keep it up, please. Moonbase.

00:04:02:24 - 00:04:04:24 absolutely.

00:04:04:24 - 00:04:08:08 Okay Well that is our news segment concluded

00:04:08:08 - 00:04:12:25 Let's get into this week's buy side breakdown.

00:04:12:27 - 00:04:15:02 So this week we're looking at a group of three

00:04:15:02 - 00:04:19:06 freehold nurseries in the north west of England,

00:04:19:09 - 00:04:20:06 I think nurseries.

00:04:20:06 - 00:04:20:20 Yeah.

00:04:20:20 - 00:04:24:09 I've in a previous conversation, I think with Charlie,

00:04:24:12 - 00:04:25:15 Charlie Norton,

00:04:25:15 - 00:04:28:16 and we were talking about how becoming new parents

00:04:28:16 - 00:04:31:22 and putting your kids in nurseries makes you look at them very differently.

00:04:31:22 - 00:04:34:30 But with a private equity and you can sort of see the attraction,

00:04:34:30 - 00:04:40:11 but it's been a really busy space actually necessary roll ups over the last decade.

00:04:40:14 - 00:04:44:25 There are some emojis in this space that have got prolific portfolios now.

00:04:44:28 - 00:04:46:25 Yeah, I was really surprised, actually.

00:04:46:25 - 00:04:50:18 We were talking about there's a list of the 25 largest nursery

00:04:50:18 - 00:04:55:30 changed in the UK, so topping out is busy bees with 366

00:04:55:33 - 00:05:01:09 nurseries, property Beta three busy bees have been busy bees

00:05:01:12 - 00:05:03:33 buying up all of these sites, but they've had a slew

00:05:03:33 - 00:05:07:25 of different private equity owners over the last couple of decades.

00:05:07:28 - 00:05:12:02 But there are, you know, 1015 groups in the UK with 50

00:05:12:02 - 00:05:15:14 plus nurseries under their belt, which is really impressive to me.

00:05:15:17 - 00:05:18:10 And so going in the same direction, that sort of veterinary

00:05:18:10 - 00:05:21:19 census did a decade ago, I guess exactly that.

00:05:21:19 - 00:05:26:02 And I think whilst, you know, there was an element of dependency

00:05:26:02 - 00:05:28:13 on kind of some of the government

00:05:28:13 - 00:05:32:09 funding whims around this and obviously 2024 there was a change

00:05:32:09 - 00:05:36:07 in policy to create more government funding entitlement

00:05:36:14 - 00:05:40:12 for the younger the parents with younger children.

00:05:40:15 - 00:05:43:28 And so so yeah, it has kind of been a bit of a catalyst

00:05:43:28 - 00:05:45:32 I think, for the space, giving it a new lease of life.

00:05:45:32 - 00:05:52:07 You've seen a number of additional deals being done recently and

00:05:52:10 - 00:05:55:10 kindred nurseries who have

00:05:55:12 - 00:05:58:12 invested in by living British, one of the private equity firms recently.

00:05:58:19 - 00:05:59:29 They've been very acquisitive.

00:05:59:29 - 00:06:05:16 I think they're going from something like 40 sites to 150 sites.

00:06:05:18 - 00:06:07:19 So they've been very bold.

00:06:07:19 - 00:06:10:32 You've got kids planet who are, I guess up there in that top five.

00:06:11:01 - 00:06:12:02 Yeah.

00:06:12:02 - 00:06:15:08 One of they own something like 150. 200.

00:06:15:11 - 00:06:18:19 It's now 172 over 72.

00:06:18:19 - 00:06:19:15 They are. Okay.

00:06:19:15 - 00:06:23:23 So yeah, they're owned by Freeman Capital and Souter Investments

00:06:23:26 - 00:06:28:20 and again, you know, it's it's all go for growth.

00:06:28:23 - 00:06:32:12 You've got Bright Stars, which was obviously a product of innovation.

00:06:32:12 - 00:06:35:32 Capital Partners recently bought by Oaktree Capital.

00:06:36:06 - 00:06:40:18 They just keep on growing bright stars that go,

00:06:40:21 - 00:06:44:01 wow, goodness me hundreds hundreds of sites now.

00:06:44:02 - 00:06:45:02 So yeah, yeah.

00:06:45:02 - 00:06:48:18 It's an interesting space grant They're the sort of French firm,

00:06:48:18 - 00:06:51:18 I think it is a global acquirer of nurseries.

00:06:51:19 - 00:06:54:29 I think they go in Frasier as being their their owner.

00:06:54:31 - 00:06:58:04 They've, they've been very acquisitive in recent years in the UK.

00:06:58:04 - 00:07:02:03 So yeah, it's, it's a great space.

00:07:02:05 - 00:07:03:25 I'm sure

00:07:03:27 - 00:07:06:13 a company like we're going to review now

00:07:06:13 - 00:07:11:10 with three sites in a nice part of the country

00:07:11:12 - 00:07:16:08 with some decent freehold it going to be in hot demand.

00:07:16:09 - 00:07:18:24 So let's get into the fundamental shall we?

00:07:18:24 - 00:07:22:19 We've obviously pulled some of their data from this crunch,

00:07:22:22 - 00:07:25:06 having found this particular listing originally

00:07:25:06 - 00:07:28:29 on business buyers.

00:07:28:32 - 00:07:33:26 There's the agent, the broker here, business buyers, Skoda, UK.

00:07:33:28 - 00:07:34:10 Yeah.

00:07:34:10 - 00:07:38:33 Is it one of their affiliated entities that Redwoods.

00:07:39:02 - 00:07:41:29 Yes. Redwoods down in Coeur. Yeah.

00:07:41:29 - 00:07:42:17 Okay. Yeah.

00:07:42:17 - 00:07:45:00 So they so they are specialists in this space.

00:07:45:00 - 00:07:48:31 They do education and and medical I think

00:07:48:33 - 00:07:52:07 brokering for business buyers but

00:07:52:10 - 00:07:54:32 yeah okay so let's, let's dig into the, the listing shall we.

00:07:54:32 - 00:07:57:31 What are we got.

00:07:57:31 - 00:07:59:01 So off the bat

00:07:59:01 - 00:08:02:19 we have no listed asking price

00:08:02:22 - 00:08:08:15 a turnover of 1.263 million and adjusted EBITDA of 284.

00:08:08:15 - 00:08:09:26 Okay.

00:08:09:28 - 00:08:14:02 So capacity for 320 children.

00:08:14:04 - 00:08:17:13 All three nurseries supported good by Ofsted

00:08:17:15 - 00:08:20:28 and Reason for sale is a retiring vendor.

00:08:20:31 - 00:08:23:00 The retiring owner again. Yes.

00:08:23:00 - 00:08:24:02 Come on, come on.

00:08:24:02 - 00:08:27:02 Thing we're coming up against and certainly a lot of that in this space.

00:08:27:09 - 00:08:31:08 I was looking at nurseries for a client the other day

00:08:31:11 - 00:08:34:29 and yes, there's a, there's a slew of them where the owners are sort of north

00:08:34:29 - 00:08:35:15 of retirement.

00:08:35:15 - 00:08:37:32 So yeah, that's really interesting.

00:08:37:32 - 00:08:42:30 So what do we know about the asset value that isn't disclosed necessarily

00:08:42:33 - 00:08:47:07 on the listing, but what is the what is the sort of the background on this?

00:08:47:07 - 00:08:50:07 We think we've identified who this company is, right?

00:08:50:08 - 00:08:54:14 Yes, we're fairly sure, but that does raise some questions.

00:08:54:14 - 00:08:56:31 So obviously, this is listed as in the description.

00:08:56:31 - 00:08:59:31 It says the nurseries operate from three freehold properties

00:08:59:31 - 00:09:03:22 with expansive outdoor space and facilities.

00:09:03:24 - 00:09:04:19 But we had

00:09:04:19 - 00:09:07:20 some discussion back and forth whether this listing

00:09:07:20 - 00:09:11:25 includes those properties or whether they are separate.

00:09:11:28 - 00:09:15:23 Yeah, a note on Redwoods website, they actually list this

00:09:15:23 - 00:09:19:05 as Manchester, whereas on business buyers they're listed as north west.

00:09:19:05 - 00:09:22:28 So if we assume that one of those sites is in Manchester.

00:09:22:31 - 00:09:26:24 Yes. Well, from the digging that we've done in the nursery

00:09:26:28 - 00:09:31:06 chain, we believe that it is it looks like it kind of

00:09:31:09 - 00:09:35:03 carries up with their three locations, one in the heart of Manchester,

00:09:35:05 - 00:09:38:27 one just outside in a kind of sort of border suburb.

00:09:38:27 - 00:09:42:19 And then one town a little further out or almost sort of on the same train line

00:09:42:19 - 00:09:44:32 out to southwest Manchester, which is interesting,

00:09:44:32 - 00:09:47:32 sort of going past the airport and the hospitals out there,

00:09:48:03 - 00:09:52:02 which would make it areas which would you say, or.

00:09:52:05 - 00:09:53:09 Yeah, I would say so.

00:09:53:09 - 00:09:55:23 I would say that, you know, probably up and coming areas.

00:09:55:23 - 00:09:58:20 I think we looked at ones even with insurer, which is sort of

00:09:58:20 - 00:10:01:16 on the edge of Stockport and is on the way up and the Hartford is a

00:10:01:16 - 00:10:03:03 lovely sort of suburban area.

00:10:03:03 - 00:10:06:03 So crew direction, so very useful

00:10:06:03 - 00:10:09:31 for commuters as well.

00:10:10:00 - 00:10:11:16 There aren't enough to each other.

00:10:11:16 - 00:10:14:16 Gail's bakery in

00:10:14:23 - 00:10:18:04 I'm not sure I haven't spent enough time in those places.

00:10:18:07 - 00:10:19:11 Or is it a Greggs.

00:10:19:11 - 00:10:20:30 Which one. Which one are we talking here.

00:10:20:30 - 00:10:24:02 Yeah Geils of Greggs is the yardstick of gentrification, isn't it?

00:10:24:02 - 00:10:25:23 So probably.

00:10:25:23 - 00:10:29:11 Probably Greggs, but Gail's on the way, I would say.

00:10:29:13 - 00:10:29:27 nice.

00:10:29:27 - 00:10:30:25 Okay, so there's a

00:10:30:25 - 00:10:35:03 there's a potential upside there in terms of changing demographic.

00:10:35:05 - 00:10:38:31 Yeah, well, I mean, look, Manchester has seen a massive influx in people

00:10:39:00 - 00:10:40:07 moving up from the South.

00:10:40:07 - 00:10:42:08 And I think what I've noticed since I've been here,

00:10:42:08 - 00:10:43:17 So I am one of those people.

00:10:43:17 - 00:10:45:18 Sorry, Manchester residents.

00:10:45:18 - 00:10:47:28 What I've noticed quite a lot is people tend to come and live here

00:10:47:28 - 00:10:49:30 and they tend to live in the sense of right on the edge of the city

00:10:49:30 - 00:10:52:15 for the first year or so, and then they sort of graduate

00:10:52:15 - 00:10:56:11 out into the smaller commuter towns because the public transport air is great.

00:10:56:11 - 00:10:59:25 So we're starting to see areas like Wythenshawe that sprawl on the edge

00:10:59:25 - 00:11:00:30 or even further out in Hartford,

00:11:00:30 - 00:11:04:07 if people wanted to live on a train line but have a bit more of a countryside feel,

00:11:04:10 - 00:11:07:28 they're starting to get more and more of that kind of drip feed of

00:11:07:31 - 00:11:10:17 of commuters in Manchester, new residents.

00:11:10:17 - 00:11:14:08 So gentrification follows, right?

00:11:14:08 - 00:11:17:22 So what kind of properties do we feel these might be like at their freehold?

00:11:17:23 - 00:11:22:03 Are we talking sort of like retail shop front locations or are we talking like

00:11:22:06 - 00:11:24:22 port cabins or what are we talking about?

00:11:24:22 - 00:11:26:30 Where where on the spectrum might these be?

00:11:26:30 - 00:11:30:17 I'm well, I mean, for the central Manchester

00:11:30:17 - 00:11:33:14 location, again, if this is the nursery that we believe

00:11:33:14 - 00:11:37:19 that it is, it's right next to Manchester, Oxford Road Station. So

00:11:37:22 - 00:11:40:30 it's very much high rise buildings around there.

00:11:40:30 - 00:11:43:31 So I'd be surprised if you'd be really interested to see what

00:11:43:31 - 00:11:47:31 they have in terms of outside space in such a busy area,

00:11:48:00 - 00:11:53:06 very popular with students, lots of student accommodation.

00:11:53:08 - 00:11:55:22 Yes. So that would be super busy, I think if you were out

00:11:55:22 - 00:11:57:20 in kind of Hartford and even within shore,

00:11:57:20 - 00:11:59:30 I think they'd have a bit more space there.

00:11:59:30 - 00:12:04:03 I think they're probably a little bit more upmarket than a porter cabin.

00:12:04:06 - 00:12:06:14 But yeah, this does kind of bring us back to the asset value

00:12:06:14 - 00:12:10:26 because from what we've seen, I'd be surprised if the asset value listed for

00:12:10:26 - 00:12:13:26 that company would cover three locations, including one in central

00:12:13:26 - 00:12:17:19 Manchester, a

00:12:17:22 - 00:12:18:17 I could be wrong.

00:12:18:17 - 00:12:19:33 I was thinking the same actually.

00:12:19:33 - 00:12:22:33 So from our analysis,

00:12:23:01 - 00:12:26:30 looks like it's sort of worth 450 grand's worth of assets.

00:12:27:03 - 00:12:27:25 Yeah.

00:12:27:25 - 00:12:29:26 So you'd be hard push to get all of the fit out

00:12:29:26 - 00:12:32:22 and the three sites onto that balance sheet.

00:12:32:22 - 00:12:36:28 I think unless you were talking about very high ground likely in those locations.

00:12:37:02 - 00:12:39:21 I note though that one of the directors

00:12:39:21 - 00:12:43:17 and actually also owns a property separately.

00:12:43:20 - 00:12:45:10 Yes, I'm well, I'm thinking

00:12:45:10 - 00:12:50:10 maybe at least one of these locations might be part of that. CO

00:12:50:12 - 00:12:51:00 If I was to

00:12:51:00 - 00:12:54:05 hazard a guess, I would guess potentially the city center location

00:12:54:05 - 00:12:58:29 and then the other two a part of the nursery.

00:12:58:32 - 00:13:01:31 Now this is another 370 case worth of assets in that property.

00:13:01:31 - 00:13:06:10 So collectively we're talking, you know, under K which, which might get

00:13:06:10 - 00:13:10:04 you three sort of small sites for, you know, this number of kids.

00:13:10:05 - 00:13:11:04 300 kids, right?

00:13:11:04 - 00:13:14:00 Yeah, I think 800 K would cover it.

00:13:14:00 - 00:13:14:20 Yeah.

00:13:14:20 - 00:13:17:13 For those sites. 350 kids. Yeah.

00:13:17:13 - 00:13:18:18 That 100 or so each.

00:13:18:18 - 00:13:20:03 I think that, I think the 800 would cover it

00:13:20:03 - 00:13:24:13 says most likely that those are broken up between those two.

00:13:24:16 - 00:13:27:10 So what kind of a deal gets done here.

00:13:27:10 - 00:13:30:10 I guess if it's freehold you've got the property deal being done

00:13:30:12 - 00:13:34:16 alongside the operating it multiple piece,

00:13:34:19 - 00:13:37:30 which from a financial perspective is pretty interesting because if you limit

00:13:37:30 - 00:13:40:05 it more towards the former, you get slightly

00:13:40:05 - 00:13:44:28 you know, you get mortgage, commercial mortgage terms on, on acquiring this.

00:13:44:31 - 00:13:47:24 But what kind of multiple do we think gets paid

00:13:47:24 - 00:13:52:01 for a nursery of this or nursery group of this size?

00:13:52:03 - 00:13:56:04 I that's a great question.

00:13:56:06 - 00:13:58:27 I mean, I'd probably wager

00:13:58:27 - 00:14:02:02 in the sort of 2.5 to 3.5 X range.

00:14:02:05 - 00:14:02:33 Yeah. Yeah.

00:14:02:33 - 00:14:05:08 So it's a fairly, fairly typical, fairly standard.

00:14:05:08 - 00:14:08:27 I guess what limits this possibly is capacity.

00:14:08:27 - 00:14:12:22 So like if it's 350 kids capacity currently, what's the utilization

00:14:12:22 - 00:14:18:04 of that capacity and what could be done to increase the,

00:14:18:11 - 00:14:21:04 you know, the yields that you'd get from each of these sites?

00:14:21:04 - 00:14:22:31 I note that they mentioned in their accounts

00:14:22:31 - 00:14:25:31 they've got 42 members of staff.

00:14:26:00 - 00:14:31:11 I guess there's going to be some shift work element to all of that. But

00:14:31:14 - 00:14:33:33 what can be done if you if you if you were to buy this,

00:14:33:33 - 00:14:37:07 you know, how much growth could you actually drive

00:14:37:10 - 00:14:39:10 and how would you go about driving that growth,

00:14:39:10 - 00:14:41:10 I guess, is the question, because that's going to influence

00:14:41:10 - 00:14:46:13 what on acquirer would be willing to pay is a multiple in terms of, you know,

00:14:46:16 - 00:14:47:12 do I get my money back?

00:14:47:12 - 00:14:52:07 And if so, how quickly and growth will will accelerate.

00:14:52:10 - 00:14:54:25 Yes. And look, you know,

00:14:54:25 - 00:14:58:18 on use heads on registration is what is why are you going to make your money?

00:14:58:18 - 00:14:59:26 You know, capacity is currency.

00:14:59:26 - 00:15:01:13 When it comes to a business like this.

00:15:01:13 - 00:15:04:13 They have spoken about room to expand.

00:15:04:16 - 00:15:08:04 But I would like to know if that's imagined room to expand

00:15:08:04 - 00:15:11:10 or whether there's planning permission for that or, you know, how set is that?

00:15:11:10 - 00:15:15:05 Is it just they have some room that you could put some additional space onto?

00:15:15:08 - 00:15:17:24 How far along in that process are they?

00:15:17:24 - 00:15:19:09 Because yeah, that's really where the growth comes from.

00:15:19:09 - 00:15:21:05 I mean, we talk about changing demographics

00:15:21:05 - 00:15:22:28 and that's something that I would dig into

00:15:22:28 - 00:15:26:01 if I was to go deeper down the rabbit hole in this business.

00:15:26:03 - 00:15:27:33 You know, look at where they are, look at what the changes are.

00:15:27:33 - 00:15:30:29 Could there be increases in prices there?

00:15:30:31 - 00:15:33:33 But really, you are always going to be limited by the number of heads

00:15:33:33 - 00:15:37:11 that you can fit in unless there are, you know, possibilities for expansion

00:15:37:11 - 00:15:41:33 into additional hours, you know, potentially so

00:15:42:02 - 00:15:44:33 holiday clubs and things like that.

00:15:44:33 - 00:15:47:06 But yeah, that's really where the limiting factor comes in.

00:15:47:06 - 00:15:50:31 So I would love to know what they mean by, you know, room to grow.

00:15:51:00 - 00:15:51:29 Yeah, likewise.

00:15:51:29 - 00:15:56:25 And what kind of CapEx is required in order to to to drive that expansion

00:15:56:28 - 00:16:00:14 because you've got a whole other ROI question then around, you know,

00:16:00:14 - 00:16:01:31 you're not just got the way of when I'm going

00:16:01:31 - 00:16:05:24 to get the initial acquisition capital back from the operations.

00:16:05:24 - 00:16:07:12 But if I'm going to expand the operations

00:16:07:12 - 00:16:10:04 and that's going to require me to put some CapEx in

00:16:10:07 - 00:16:13:07 and possibly I might be already, you know,

00:16:13:09 - 00:16:17:07 heavily leveraged in the deal structure that I end up doing and acquiring it.

00:16:17:09 - 00:16:19:13 Well,

00:16:19:13 - 00:16:22:13 how many years will I wait to get my money back for my for my expansion?

00:16:22:13 - 00:16:26:17 So, yeah, delicate consideration, lots of calculation required.

00:16:26:17 - 00:16:31:06 But as you say, it's going to be planning permission driven.

00:16:31:09 - 00:16:34:02 There's a staffing challenge if you're going to increase the capacity.

00:16:34:02 - 00:16:39:20 Obviously there's a statutory maximum number of kids you can have key carer

00:16:39:22 - 00:16:42:20 so that something is always worth thinking about.

00:16:42:20 - 00:16:45:26 And of course, you know, with an army of people in the,

00:16:45:27 - 00:16:48:06 in these sort of businesses comes additional overhead

00:16:48:06 - 00:16:50:12 in managing those people and you know, h.R.

00:16:50:12 - 00:16:51:06 Etc. as well.

00:16:51:06 - 00:16:55:29 So I wonder and I sort of hate the way that this is used

00:16:55:29 - 00:17:01:23 in private equity for nursery rollouts, but revenue per child

00:17:01:25 - 00:17:04:00 basis, not a bit because it doesn't sound great,

00:17:04:00 - 00:17:08:31 does it know as a parent, but not sure my my child to be assessed on revenue.

00:17:09:00 - 00:17:10:12 But yeah,

00:17:10:12 - 00:17:13:13 I wonder what that metric looks like in these kinds of locations,

00:17:13:13 - 00:17:14:29 whether there is a premium

00:17:14:29 - 00:17:18:06 and a good margin to be made on all that kind of cost to serve

00:17:18:09 - 00:17:22:24 or whether it is, you know, sort of a subsistence kind of exercise

00:17:22:24 - 00:17:24:09 and you don't end up doing it for the money,

00:17:24:09 - 00:17:27:14 you end up doing it for the for the mission, the social impacts,

00:17:27:14 - 00:17:31:11 if you will.

00:17:31:14 - 00:17:34:30 Yes. I mean, we obviously there is money to be made in this business.

00:17:34:30 - 00:17:37:01 Otherwise, you know, those numbers in this companies

00:17:37:01 - 00:17:40:01 that we were able off at the start, this wouldn't exist.

00:17:40:02 - 00:17:42:21 But then this was a question I was going to put to you.

00:17:42:21 - 00:17:46:31 I mean, is this something that someone should go into without prior knowledge?

00:17:46:31 - 00:17:49:11 I mean, is it something that you can pick up and run with?

00:17:49:11 - 00:17:51:08 And they talk about the fact they've got an experienced staff

00:17:51:08 - 00:17:54:08 and it could all be hands off, but, you know, things like,

00:17:54:15 - 00:17:57:15 you know, regulations and Ofsted and,

00:17:57:20 - 00:17:59:27 you know, the way that government influence affects it.

00:17:59:27 - 00:18:00:29 Like, is this something that you'd

00:18:00:29 - 00:18:04:28 really want to know going in in order to make the most of this?

00:18:04:31 - 00:18:07:11 Is this, is this something that a sector agnostic person could

00:18:07:11 - 00:18:09:03 pick up and run with?

00:18:09:06 - 00:18:12:10 I, I'd find that difficult to believe.

00:18:12:10 - 00:18:19:02 I think it's one of those related spaces with offset that,

00:18:19:05 - 00:18:23:11 you know, there are certain qualifications and accreditations etc.

00:18:23:11 - 00:18:27:15 that both the sites and the leadership would be expected to have.

00:18:27:18 - 00:18:30:27 So I mean, if they're all covered off and, you know, the team that's

00:18:30:27 - 00:18:34:28 there is the compliance, the governance piece that's required,

00:18:34:28 - 00:18:39:12 then then, yes, ostensibly.

00:18:39:15 - 00:18:41:22 But obviously you

00:18:41:22 - 00:18:42:31 don't want to dig up the past.

00:18:42:31 - 00:18:47:02 But there are some examples, if you like, in acquisition entrepreneurship,

00:18:47:02 - 00:18:51:06 where nurseries were acquired by people that weren't specialists

00:18:51:06 - 00:18:53:02 in this space and in.

00:18:53:02 - 00:18:56:23 Well, yes,

00:18:56:26 - 00:18:58:10 yeah, yeah.

00:18:58:10 - 00:19:01:14 I mean, I think I think it can be done if there's good management

00:19:01:14 - 00:19:02:18 and but I don't think it's something

00:19:02:18 - 00:19:05:28 you can just set and forget and like, you know, come back once a quarter

00:19:05:28 - 00:19:07:28 for a board meeting I feel about it's the sort of thing

00:19:07:28 - 00:19:11:17 that morally you're compelled to keep your hand on the tiller.

00:19:11:20 - 00:19:14:01 Well I also think, well, yeah, absolutely.

00:19:14:01 - 00:19:18:03 Morally, I think also you know, going back to what we were saying about offset

00:19:18:06 - 00:19:22:25 the fact that they have good Ofsted ratings across all three locations,

00:19:22:25 - 00:19:26:07 I think is an excellent thing because that shows that it's not a fluke,

00:19:26:09 - 00:19:28:17 that shows good management, it shows that they've got a good team

00:19:28:17 - 00:19:31:08 and that they know what they're doing. But good is good.

00:19:31:08 - 00:19:37:18 It's fairly generic, very mediocre records, outstanding is the goal.

00:19:37:21 - 00:19:39:28 It was just tough, tough to get and tough to keep.

00:19:39:28 - 00:19:44:04 But yeah, no, this is not the none of these sorts of deemed outstanding.

00:19:44:04 - 00:19:46:14 I think good. Yes.

00:19:46:14 - 00:19:50:10 But worth someone to come along and lose the good

00:19:50:10 - 00:19:51:22 rating on even one of those sites.

00:19:51:22 - 00:19:53:17 I reckon that would carry a bit off

00:19:53:17 - 00:19:57:08 faster than a rent hike which I think the multiples.

00:19:57:11 - 00:19:59:17 Yeah, absolutely.

00:19:59:17 - 00:20:03:05 Because you know, these things run on reputation so

00:20:03:08 - 00:20:05:25 maybe it is one for those with a bit of prior knowledge.

00:20:05:25 - 00:20:07:06 I mean, maybe not necessarily.

00:20:07:06 - 00:20:10:21 Yeah, I think they're probably necessarily in the childcare space actually.

00:20:10:24 - 00:20:13:15 I think there probably some transferable skills from some other sectors,

00:20:13:15 - 00:20:18:33 but for me I would be I would be nervous to take on something like this.

00:20:19:02 - 00:20:22:10 Yeah, I'm inclined to agree

00:20:22:13 - 00:20:23:16 there.

00:20:23:16 - 00:20:27:09 It's assuming you couldn't just say you couldn't in a short

00:20:27:09 - 00:20:31:02 space of time increase the capacity for this business.

00:20:31:05 - 00:20:33:01 How else could you increase the increase

00:20:33:01 - 00:20:34:30 the revenue or profitability of this business?

00:20:34:30 - 00:20:41:10 I mean, I wonder what the elasticity of pricing would be like in childcare.

00:20:41:12 - 00:20:45:04 I mean, speaking as a parent of pay through the nose to send

00:20:45:06 - 00:20:48:28 children to the nursery in the past,

00:20:48:30 - 00:20:52:18 it's yes, it sometimes requires a full time

00:20:52:18 - 00:20:55:18 income just to pay the childcare in certain locations.

00:20:55:22 - 00:20:58:04 But what

00:20:58:04 - 00:21:02:30 what do you think is the feasibility of being able to get a price

00:21:02:30 - 00:21:06:19 increase through on this kind of this kind of an asset?

00:21:06:21 - 00:21:10:19 I think it would be interesting to see where they're currently priced.

00:21:10:19 - 00:21:14:24 I think one of the kind of nuances of the location is

00:21:14:32 - 00:21:18:26 we are in a kind of flux in the Northwest where things are becoming more expensive

00:21:18:26 - 00:21:21:08 because of people like me that have moved here. Again, sorry.

00:21:21:08 - 00:21:25:15 Still, the Greater Manchester residents that hold me accountable for that.

00:21:25:18 - 00:21:28:06 So it may be that they are priced

00:21:28:09 - 00:21:29:25 to a kind of

00:21:29:25 - 00:21:32:25 previously low number and there could be some room for expansion there.

00:21:32:25 - 00:21:36:26 But then you wouldn't want to, you know,

00:21:36:28 - 00:21:39:29 you know, neglect the local community that that may be also struggling

00:21:39:30 - 00:21:41:00 to afford it as is.

00:21:41:00 - 00:21:43:08 So there might be some room to grow there.

00:21:43:08 - 00:21:44:10 I'm not sure.

00:21:44:10 - 00:21:48:06 I think potentially if you can't increase the capacity,

00:21:48:09 - 00:21:51:20 I think probably service diversification is the way to go.

00:21:51:20 - 00:21:56:08 So like I said, you know, maybe after school programs, holiday clubs,

00:21:56:10 - 00:21:58:28 specialized classes,

00:21:58:28 - 00:22:01:28 you know, what else could you do with the space

00:22:01:30 - 00:22:04:01 and increase maybe the hours rather

00:22:04:01 - 00:22:07:13 than if you can't increase the capacity or the pricing?

00:22:07:16 - 00:22:09:04 Yeah, good point.

00:22:09:04 - 00:22:12:04 Yes, it's a bit more by using the longer hours.

00:22:12:04 - 00:22:15:03 Yeah, I see the merit of that.

00:22:15:03 - 00:22:18:16 Also, all that sort of tiered structure in the market around different

00:22:18:21 - 00:22:19:24 types of model here.

00:22:19:24 - 00:22:21:12 Like I get the thing,

00:22:21:12 - 00:22:24:12 not everybody is charging the same price for the same product.

00:22:24:14 - 00:22:27:12 There's a there's a group called in Family Club

00:22:27:12 - 00:22:30:18 that's quite it's growing quite rapidly down here

00:22:30:18 - 00:22:35:18 in London where it's almost like putting your child

00:22:35:18 - 00:22:39:27 into a scandi styled

00:22:39:29 - 00:22:45:01 kind of Nordic coffee shop experience with

00:22:45:04 - 00:22:47:10 like very

00:22:47:10 - 00:22:50:26 curated programs of of kind of

00:22:50:29 - 00:22:54:12 Montessori esque sort of experiences for these kids

00:22:54:12 - 00:22:56:22 to kind of give them a head start, if you will,

00:22:56:22 - 00:22:59:22 if your plan is to send them to Eton or something.

00:22:59:29 - 00:23:01:32 But, but yeah, these guys

00:23:01:32 - 00:23:05:12 and family club charge significant premium.

00:23:05:12 - 00:23:07:23 This is like the sort of more generic competition,

00:23:07:23 - 00:23:09:01 but they have little things like,

00:23:09:01 - 00:23:12:20 you know, as a parent you can stay in co work for a bit after you've got to cater

00:23:12:21 - 00:23:16:05 or they'll provide you kind of coffee and Brussels, which they call free.

00:23:16:05 - 00:23:16:29 But I'm pretty sure

00:23:16:29 - 00:23:19:19 given you paid for the most of the fees, they're not really great.

00:23:19:19 - 00:23:24:18 But yeah, the reason I asked about the affluence of the areas

00:23:24:18 - 00:23:28:25 ultimately is because is there and means to kind of pivot in the model a bit like

00:23:28:28 - 00:23:32:07 take up market for a nursery or is it necessarily

00:23:32:07 - 00:23:35:16 just a nursery to the to the majority of people in these kind of places?

00:23:35:19 - 00:23:39:06 I mean, I think it would depend I'm not too knowledgeable on Hartford or within.

00:23:39:06 - 00:23:39:31 So I have to say

00:23:39:31 - 00:23:43:27 I do think it would be possible around the Manchester Oxford Road Nursery

00:23:43:27 - 00:23:47:16 and maybe they could use that as a as a as a test site for that because there are

00:23:47:20 - 00:23:47:33 you know,

00:23:47:33 - 00:23:50:13 we've had a huge influx of a lot of the challenge of banks

00:23:50:13 - 00:23:54:03 have said, now you know, you starlings and humans over and such and high paid

00:23:54:05 - 00:23:55:31 tech workers in and around the city.

00:23:55:31 - 00:23:59:11 I'm sure that something like what you've described might appeal to them.

00:23:59:11 - 00:24:03:19 So maybe they could use it as a test site for, for something along those lines.

00:24:03:21 - 00:24:05:26 If they do freehold, the building in that location

00:24:05:26 - 00:24:09:08 then would be a great place to kind of co work from.

00:24:09:11 - 00:24:12:15 So yeah, yeah, that could be, that could be a consideration.

00:24:12:15 - 00:24:15:05 It's, you know, and, and then, you know,

00:24:15:05 - 00:24:19:00 do you have pricing tiers to be treated like a SAS model.

00:24:19:03 - 00:24:24:26 I'd like my shout on platinum plus please

00:24:24:28 - 00:24:27:14 at least send them out ready for prep school or whatever it would be.

00:24:27:14 - 00:24:29:24 Yeah. Yeah, exactly. Yeah.

00:24:29:24 - 00:24:30:27 No that's not super.

00:24:30:27 - 00:24:32:06 I mean childcare is not something

00:24:32:06 - 00:24:34:20 that I know much about, so that is really interesting.

00:24:34:20 - 00:24:39:11 I can totally see that you could reposition yourself to be the kind of,

00:24:39:11 - 00:24:43:25 you know, future leader trainer of, of babies.

00:24:43:28 - 00:24:45:16 Yeah.

00:24:45:16 - 00:24:47:30 Basically in the fintech, you know, we only do fintech kids.

00:24:47:30 - 00:24:49:13 Yeah, I like that.

00:24:49:13 - 00:24:51:20 Yeah. Neobank customers only.

00:24:51:20 - 00:24:53:04 But no, in all seriousness, like,

00:24:53:04 - 00:24:55:13 there is always a risk, of course, when you change a model like that

00:24:55:13 - 00:24:58:30 that you would alienate your existing customer base before you are able

00:24:58:30 - 00:25:03:04 to plug the gap with the higher end customers that you want to attract.

00:25:03:07 - 00:25:05:08 Yeah, Yeah, absolutely.

00:25:05:08 - 00:25:05:26 Absolutely.

00:25:05:26 - 00:25:08:00 Well, I mean, this is another great point.

00:25:08:00 - 00:25:12:14 So if someone were to take this on and the freehold of the properties

00:25:12:14 - 00:25:15:22 is included, that does give you a good launchpad

00:25:15:22 - 00:25:20:17 to provide capital for a fourth location potentially.

00:25:20:20 - 00:25:21:25 So if you were to

00:25:21:25 - 00:25:24:09 want to try something new, that could be a way to do that

00:25:24:09 - 00:25:26:10 and that could be a way to expand capacity.

00:25:26:10 - 00:25:27:21 They already have a,

00:25:27:21 - 00:25:31:22 you know, reasonably well no name in the area with the three sites.

00:25:31:25 - 00:25:33:33 Would that be an option that you'd look at?

00:25:33:33 - 00:25:35:15 I think I'd most definitely would.

00:25:35:15 - 00:25:39:32 In fact, they probably already have kind of centralized back office h.r.

00:25:40:00 - 00:25:40:27 And i.t.

00:25:40:27 - 00:25:43:16 And you know, administration and that sort of stuff.

00:25:43:16 - 00:25:48:05 The maybe they're able to kind of amortize across a greater number of sites.

00:25:48:08 - 00:25:52:19 And I think the more sites you build out,

00:25:52:22 - 00:25:56:00 you know, from a common infrastructure, the more you know,

00:25:56:06 - 00:25:59:15 overall profitability you can drive because of that

00:25:59:18 - 00:26:03:01 duplication piece that shared central functions piece.

00:26:03:04 - 00:26:06:20 So yeah, I think that's really inspired that actually this potentially becomes

00:26:06:20 - 00:26:12:10 a bit of a platform and I actually within this country got a couple of acquisition

00:26:12:10 - 00:26:16:13 entrepreneurs that are actually actively looking, thinking about this now

00:26:16:16 - 00:26:21:26 to to find more platform companies in in education. So

00:26:21:28 - 00:26:24:28 yes, I think the growth here is not necessarily

00:26:24:30 - 00:26:27:12 bring more out of the existing sites

00:26:27:12 - 00:26:30:00 except for ring more back office functions

00:26:30:00 - 00:26:33:23 out of the HQ and can add on more sites

00:26:33:25 - 00:26:37:09 using all of the kind of the learnings

00:26:37:12 - 00:26:42:16 and the brand positioning and the systems and processes that you've got for three.

00:26:42:18 - 00:26:47:21 What what can you do that for six or nine or whatever over a period of a few years?

00:26:47:21 - 00:26:51:06 So see, I think maybe that's the better use of capital

00:26:51:09 - 00:26:54:15 in getting a foothold in other local

00:26:54:15 - 00:26:58:03 markets around where the brand is is considered strong.

00:26:58:06 - 00:27:00:19 Yeah, yeah. That makes sense.

00:27:00:19 - 00:27:02:27 Going back to that, actually talking about the back office stuff,

00:27:02:27 - 00:27:06:03 one of the things that I thought was it was a positive from this listing

00:27:06:03 - 00:27:09:12 is that they do have what seems to be a solid sort of back

00:27:09:12 - 00:27:14:05 office team and they do talk about it being sort of fairly

00:27:14:07 - 00:27:15:28 management free.

00:27:15:28 - 00:27:18:16 I think that's the exact time they use professional management in place of

00:27:18:16 - 00:27:22:20 kind of owner non-operational, which I think is great.

00:27:22:20 - 00:27:23:28 And I think that for this particular

00:27:23:28 - 00:27:27:01 industry, staff turnover can be high and they do talk a lot about that.

00:27:27:01 - 00:27:29:01 They have good retention of good staff.

00:27:29:01 - 00:27:32:31 I think that's a positive and it would probably help you attract new staff.

00:27:33:00 - 00:27:35:03 I would potentially.

00:27:35:03 - 00:27:37:21 I think I read somewhere that they've got some some members of staff

00:27:37:21 - 00:27:41:05 that've been there for over 12 years, which I think is

00:27:41:07 - 00:27:43:05 excellent, but I think 12 year veterans

00:27:43:05 - 00:27:46:11 can come within a sort of invisible redundancy tab.

00:27:46:11 - 00:27:48:33 So it'd be interesting to know that number.

00:27:48:33 - 00:27:53:07 I think in a again, a high turnover sort of space, taking on a business,

00:27:53:09 - 00:27:59:17 being a new owner of a company with lots of long running staff might be a risk.

00:27:59:20 - 00:28:01:16 Yeah, it could be.

00:28:01:16 - 00:28:05:03 I mean, look, it's a sort of exercise you go through with any acquisition.

00:28:05:03 - 00:28:08:04 As you look at those ten years, there's the services you work out,

00:28:08:04 - 00:28:12:23 what your exposure liability would be, and nobody, every acquirer should be

00:28:12:23 - 00:28:15:29 mindful of transfer, of undertaking perfect protection of employment.

00:28:16:01 - 00:28:19:13 And you can't really go in and make swingeing cuts.

00:28:19:16 - 00:28:21:20 You know, people are entitled to some continuity

00:28:21:20 - 00:28:23:03 when you acquire the businesses.

00:28:23:03 - 00:28:23:19 Absolutely.

00:28:23:19 - 00:28:26:19 But similarly, you would quantify, you know, what

00:28:26:21 - 00:28:29:10 if, if a redundancy process was necessary,

00:28:29:10 - 00:28:33:27 where the total extent of your liabilities are, if there's anything contractual

00:28:33:27 - 00:28:39:02 that entitles the staff to more than statutory redundancy and

00:28:39:05 - 00:28:39:33 then work out

00:28:39:33 - 00:28:42:32 exactly what it would you say you want me to cut 20% of your headcount?

00:28:42:32 - 00:28:45:33 Why would that look like in terms of the total cost liability

00:28:45:33 - 00:28:49:20 to the business to pay them often and and and getting on

00:28:49:23 - 00:28:53:02 not somebody necessarily ever really want to have to do.

00:28:53:02 - 00:28:57:00 But no, you have to have a contingency plan, you know, plan for the

00:28:57:03 - 00:28:57:23 hope for the best

00:28:57:23 - 00:29:00:28 time for the worst I think is let me say I think that's the thing.

00:29:00:28 - 00:29:02:26 That's the saying.

00:29:02:26 - 00:29:06:24 And is there anything in particular that you would be looking for

00:29:06:24 - 00:29:10:14 in the due diligence process for a company like this?

00:29:10:17 - 00:29:12:18 Yeah, I'd want to be checking policies.

00:29:12:18 - 00:29:13:29 I want to be checking.

00:29:13:29 - 00:29:17:09 I want to see the Ofsted report, which you can obviously do publicly

00:29:17:11 - 00:29:21:00 when they last assessed if, if that goes back

00:29:21:03 - 00:29:24:30 because there was a backlog period around COVID where, you know,

00:29:24:33 - 00:29:27:21 educational establishments just weren't assessed and

00:29:27:21 - 00:29:30:24 they just got to keep their accreditation,

00:29:30:24 - 00:29:34:25 that's their level of award for longer.

00:29:34:28 - 00:29:38:18 And so if that's if they still haven't been around for another cycle,

00:29:38:19 - 00:29:42:05 how can I be sure that this is still a good nursery, for example?

00:29:42:05 - 00:29:45:30 So if that was recent, I'd have more, more confidence.

00:29:45:33 - 00:29:49:28 Not anybody really wants to ever enlisted inspection, but

00:29:49:31 - 00:29:51:16 but you would probably want one to be done in

00:29:51:16 - 00:29:55:03 the recent past is is really what I'm saying I'd want to see obviously

00:29:55:03 - 00:29:59:29 employment contracts tenure and service org charts, those kind of things

00:29:59:32 - 00:30:03:09 insurances accreditations to any of the particular

00:30:03:09 - 00:30:09:15 like large groups which I mean like the industry associations

00:30:09:17 - 00:30:11:10 training records.

00:30:11:10 - 00:30:13:19 Yeah. There's quite a human centric business isn't it?

00:30:13:19 - 00:30:14:10 You know,

00:30:14:10 - 00:30:18:05 these are tiny humans who are in the hands of the bigger, more experienced humans,

00:30:18:08 - 00:30:21:32 and they're the ones that can give you a liability or otherwise.

00:30:21:32 - 00:30:25:14 But I'd like to look at some of the recordkeeping

00:30:25:17 - 00:30:28:28 you know, maybe accident logs, because they'll all be keeping

00:30:28:28 - 00:30:33:27 some high level meetings around about accidents.

00:30:33:29 - 00:30:36:03 Yeah,

00:30:36:03 - 00:30:36:27 those kind of things.

00:30:36:27 - 00:30:41:21 In addition to the kind of quality of earnings, what do they do by way of

00:30:41:24 - 00:30:42:32 of payments?

00:30:42:32 - 00:30:46:19 Do they do they charge people, you know, X number of months upfront

00:30:46:19 - 00:30:50:13 or is it is it all just monthly in arrears?

00:30:50:16 - 00:30:54:22 What is that kind of invoicing policy?

00:30:54:24 - 00:30:57:23 Yeah, that's pretty standard fare.

00:30:57:23 - 00:30:59:23 So yeah, it's this

00:30:59:23 - 00:31:03:20 simple due diligence you can probably do with businesses like this, but

00:31:03:22 - 00:31:05:28 I think the trick is not not to rock the boat too much

00:31:05:28 - 00:31:10:13 because they're obviously doing well, doing what they do.

00:31:10:16 - 00:31:13:16 You want to keep them functioning optimal

00:31:13:23 - 00:31:16:19 and use that as a platform I think to build on.

00:31:16:19 - 00:31:17:11 I totally agree.

00:31:17:11 - 00:31:19:24 I think the only thing I would add to that is I would want to

00:31:19:24 - 00:31:23:06 I mean, you do this by course anyway, but a real solid property

00:31:23:06 - 00:31:26:15 appraisal of those three locations because if there is any,

00:31:26:17 - 00:31:28:27 you know, deferred maintenance or anything to be done, like you

00:31:28:27 - 00:31:31:21 said, you are interested in the care of these little humans.

00:31:31:21 - 00:31:34:32 And I think that this is a super important thing to look into So.

00:31:35:00 - 00:31:38:15 Well, to that end, do you want the property like there's

00:31:38:15 - 00:31:39:15 another thing here that could

00:31:39:15 - 00:31:44:07 could you carve out the opcoes here and just buy the cash generating assets,

00:31:44:09 - 00:31:48:15 have the owner keep the property in the pension fund or in their prop CO

00:31:48:17 - 00:31:50:31 and charges or rent, you know, give us a renewed lease

00:31:50:31 - 00:31:53:33 for the next ten years or something on each of the sites.

00:31:53:33 - 00:31:59:06 And then at least we've got an IBEX that is, you know, part of the cost of,

00:31:59:08 - 00:32:03:11 you know, quite the overheads in serving this day to day revenue

00:32:03:14 - 00:32:06:14 without necessarily having all the capital

00:32:06:16 - 00:32:09:15 obligations that you have as being a landlord as well.

00:32:09:15 - 00:32:12:06 So I wonder if there's a deal that's more

00:32:12:06 - 00:32:15:11 affordably to be done if someone didn't want to take on a commercial mortgage.

00:32:15:11 - 00:32:21:28 And that to me is just by the Echo Facebook.

00:32:21:31 - 00:32:22:18 Okay.

00:32:22:18 - 00:32:25:09 So I guess we've got to get to decision time. Really.

00:32:25:09 - 00:32:27:25 I think if it were if it were your money, what would you do?

00:32:27:25 - 00:32:31:33 So we get to buy and buy or pass, and this is an interesting one.

00:32:31:33 - 00:32:35:11 So in the hypothetical, if I knew what I was doing with that,

00:32:35:14 - 00:32:37:30 with nurseries, I think it's one that I would look into.

00:32:37:30 - 00:32:40:17 I think I'd go for buy. I think it's in a really great location.

00:32:40:17 - 00:32:44:17 I think there are some possibilities for expansion maybe.

00:32:44:20 - 00:32:48:12 I think the area is on up, lots of new houses being built.

00:32:48:15 - 00:32:52:16 I really like the idea of the SAS model training the next leadership baby.

00:32:52:16 - 00:32:57:03 So yeah, if I if I knew what I was doing, I think I'd go buy for this one.

00:32:57:06 - 00:32:59:20 How about you?

00:32:59:23 - 00:33:01:19 Well,

00:33:01:19 - 00:33:03:28 I have a list

00:33:03:28 - 00:33:04:31 to never work with.

00:33:04:31 - 00:33:07:04 Animals,

00:33:07:04 - 00:33:10:22 universities

00:33:10:25 - 00:33:12:28 or children.

00:33:12:28 - 00:33:15:24 So, yeah, I.

00:33:15:24 - 00:33:18:15 I might be having to break my own rules if I.

00:33:18:15 - 00:33:21:33 If I went down this road that.

00:33:22:02 - 00:33:24:29 Yeah, I, I'm in split minds.

00:33:24:29 - 00:33:30:00 I kind of like the profitability, I kind of like just at that sort of size

00:33:30:07 - 00:33:33:32 where you could throw some more on there and build it out into a little group

00:33:33:32 - 00:33:37:15 and start using it as a as a platform to go and do some walk ins.

00:33:37:15 - 00:33:41:28 And I'm a mini grand day or a mini busy bees or whatever.

00:33:41:31 - 00:33:44:20 But I do look obviously at some of these roll ups

00:33:44:20 - 00:33:47:26 and think, yeah, there's some decent returns there.

00:33:47:29 - 00:33:51:08 So yeah, I probably support you.

00:33:51:11 - 00:33:53:24 I would vote

00:33:53:27 - 00:33:54:26 for it.

00:33:54:26 - 00:33:55:30 Wow. Well, there we go.

00:33:55:30 - 00:33:58:00 It's our first

00:33:58:00 - 00:33:59:29 our first unified vote.

00:33:59:29 - 00:34:03:07 We're going to buy this rather than just the first consensus.

00:34:03:07 - 00:34:04:21 That's the word I was grasping for.

00:34:04:21 - 00:34:07:17 Missing consensus. Yep. Excellent.

00:34:07:17 - 00:34:09:09 awesome. Well,

00:34:09:09 - 00:34:10:07 anybody listening?

00:34:10:07 - 00:34:11:25 Please let us know what you think.

00:34:11:25 - 00:34:15:14 We'd love to know if you would buy or pass on this.

00:34:15:16 - 00:34:19:00 And if you are somebody that's looking for a nursery, then let us know.

00:34:19:01 - 00:34:21:11 Maybe we can help put you in touch.

00:34:21:11 - 00:34:23:16 Yeah, absolutely.

00:34:23:16 - 00:34:25:20 So cool.

00:34:25:20 - 00:34:29:08 Next, we have we have we have an interview next week

00:34:29:08 - 00:34:31:11 with another successful searcher

00:34:31:11 - 00:34:33:03 that's got a couple of deals done in recent months.

00:34:33:03 - 00:34:36:21 So very much looking forward to that.

00:34:36:23 - 00:34:40:13 We continue to put the finishing touches to the symposium.

00:34:40:16 - 00:34:45:00 Love to get more folks aware of that and

00:34:45:03 - 00:34:46:32 the tickets are still available.

00:34:46:32 - 00:34:50:08 That's on the 18th of June taking place in central London.

00:34:50:10 - 00:34:54:05 Visit serial acquirer Dot UK for your day pass.

00:34:54:08 - 00:34:57:33 We've added a couple of sponsors recently so

00:34:58:02 - 00:35:02:07 yeah it's looking like a decent event.

00:35:02:09 - 00:35:04:22 What else

00:35:04:22 - 00:35:06:17 as always

00:35:06:17 - 00:35:09:20 keep up to date with new features coming on Biz Crunch.

00:35:09:22 - 00:35:11:24 Obviously recently we launched our outreach.

00:35:11:24 - 00:35:14:24 We are the first platform to allow you to go into and

00:35:14:25 - 00:35:16:21 to find an outreach to customers on the platform.

00:35:16:21 - 00:35:19:30 We've got some more exciting features coming out very soon,

00:35:19:32 - 00:35:22:17 so stay tuned for all of that too.

00:35:22:17 - 00:35:23:19 Magic Yeah, exactly.

00:35:23:19 - 00:35:25:28 So exciting period ahead.

00:35:25:28 - 00:35:27:23 Thanks, everyone for listening.

00:35:27:23 - 00:35:31:17 Love to hear your comments and and thoughts on this deal below.

00:35:31:20 - 00:35:32:24 And we'll see you next week.

00:35:32:24 - 00:35:35:14 Until then, keep on crunching. Keep on crunching.