00:00:12:02 - 00:00:14:17 Hello, Welcome back to the M&A Zing,

00:00:14:17 - 00:00:17:08 the weekly podcast for acquisition entrepreneurs, search funders

00:00:17:08 - 00:00:20:08 and holdco builders across the UK and Europe

00:00:20:13 - 00:00:23:13 this week, straight from an amazing weekend in Fontainebleau

00:00:23:14 - 00:00:26:29 at the INSEAD 2025 conference, which brought together

00:00:26:29 - 00:00:31:09 almost 400 established and aspiring acquisitions, entrepreneurial search

00:00:31:09 - 00:00:36:03 investors, MBA students and supporters for an insightful day of discussion,

00:00:36:08 - 00:00:38:07 knowledge sharing, networking.

00:00:38:07 - 00:00:39:07 What a wonderful weekend

00:00:39:07 - 00:00:42:27 we had in a beautiful setting of the INSEAD campus near Paris.

00:00:42:29 - 00:00:45:30 We're going to shortly dive into an exciting interview

00:00:45:30 - 00:00:49:24 with an amazing acquisition entrepreneur who has recently completed his acquisition

00:00:49:30 - 00:00:51:33 and is here to share his journey with us.

00:00:51:33 - 00:00:56:00 So but first, let's get into this week's news.

00:00:56:05 - 00:00:59:17 A few items that may have escaped your attention

00:00:59:19 - 00:01:02:17 are DCP, led by Sameer Rich, V

00:01:02:17 - 00:01:08:05 and Arena to Sugar have acquired Monarch Health Care, an operator of 13

00:01:08:05 - 00:01:09:13 freehold nursing homes,

00:01:09:13 - 00:01:12:32 which has indexed their holdco once again towards the care space

00:01:13:00 - 00:01:17:21 making Odyssey epic, have the lion's share of their diversified portfolio.

00:01:17:21 - 00:01:22:06 But congratulations to them on what must have been a fairly complex transaction.

00:01:22:09 - 00:01:25:10 Over to Spain, we see Treasury capital led

00:01:25:10 - 00:01:28:16 by Louis Diaz, Rodriguez Arias,

00:01:28:16 - 00:01:31:16 and backed by a number of investors, including Daniel Lago.

00:01:31:18 - 00:01:35:06 Visa has begun his search for a 1 million to 3 and a half

00:01:35:06 - 00:01:39:05 million euro EBIT, SMB in the Iberian Peninsula.

00:01:39:05 - 00:01:43:28 So we wish Louis a the best of luck in success.

00:01:43:31 - 00:01:46:20 And then something I recommend to your reading Search for News

00:01:46:20 - 00:01:52:08 has published its end of Q1 2025 report, which reviews 20 search led acquisitions

00:01:52:08 - 00:01:57:10 globally that took place so far this year, of which 45% have been in Europe.

00:01:57:13 - 00:02:02:05 And of those European deals, about 45% have been in Spain, specifically

00:02:02:05 - 00:02:06:14 whilst the UK, Germany and Netherlands comprise most of the remainder

00:02:06:17 - 00:02:08:30 key takeaways, the main active verticals

00:02:08:30 - 00:02:12:28 continue to be industrials, B2B services, software and healthcare.

00:02:12:28 - 00:02:15:18 So going on search for news and have a read of that.

00:02:15:18 - 00:02:19:10 It certainly tells you what the road ahead looks like for 2025.

00:02:19:13 - 00:02:21:10 So that's the news today.

00:02:21:10 - 00:02:23:12 We are speaking with someone who has navigated

00:02:23:12 - 00:02:26:12 the full of entrepreneurship through acquisition,

00:02:26:21 - 00:02:29:11 from preparation and search to acquisition.

00:02:29:11 - 00:02:31:19 And now Operation

00:02:31:19 - 00:02:33:25 Sebastian Willan is

00:02:33:25 - 00:02:37:11 the searcher behind Perfect is Capital and now the managing director

00:02:37:11 - 00:02:40:14 of Vista Folio, a company that he recently acquired.

00:02:40:14 - 00:02:44:19 His journey is fascinating, involving a top tier start

00:02:44:22 - 00:02:49:09 as a consultant at Bain, followed by a very intentional decade building

00:02:49:09 - 00:02:52:20 diverse leadership experience across business development, marketing

00:02:52:27 - 00:02:58:10 and large scale operations at companies like Iwg, Regis and Shopee,

00:02:58:13 - 00:03:01:01 including nearly seven years based in Asia.

00:03:01:01 - 00:03:05:15 Before embarking on his search here based in London, UK,

00:03:05:17 - 00:03:07:32 he's now applying all of that wealth of experience

00:03:07:32 - 00:03:11:08 to leading Vista Folia, the company that he acquired in recent months.

00:03:11:08 - 00:03:16:15 So Sebastian, welcome to the show and great to see you again, sir.

00:03:16:18 - 00:03:18:02 Thanks for the warm introduction.

00:03:18:02 - 00:03:20:15 Gareth.

00:03:20:15 - 00:03:24:04 So let's start with your intentional path.

00:03:24:04 - 00:03:27:06 As I mentioned to you, you've moved on from Bain

00:03:27:06 - 00:03:31:06 and you spent ten years in leadership roles,

00:03:31:09 - 00:03:35:01 including at Iwg, and spend most of the time in Asia.

00:03:35:09 - 00:03:41:18 Was it always your intention to get into entrepreneurship through acquisition?

00:03:41:21 - 00:03:44:27 I think yes and no.

00:03:44:30 - 00:03:47:02 I think I realized quite early on

00:03:47:02 - 00:03:50:30 during my strategy consultant years that

00:03:50:33 - 00:03:54:23 I didn't want to become a corporate citizen for life,

00:03:54:25 - 00:03:58:11 but at the same time I realized that on the one hand, my,

00:03:58:16 - 00:04:02:28 my risk profile wasn't high enough and I didn't have

00:04:02:31 - 00:04:04:31 an idea yet to start my own business.

00:04:04:31 - 00:04:09:06 So those two meant that to start the entrepreneurial journey

00:04:09:06 - 00:04:12:12 at that point in time was was just not feasible.

00:04:12:15 - 00:04:17:26 So at the same time, my, my uncle in Belgium,

00:04:17:32 - 00:04:20:32 he bought a

00:04:21:05 - 00:04:24:00 what many would consider a boring business.

00:04:24:00 - 00:04:27:32 He bought a paint business and it sort of opened my eyes

00:04:28:00 - 00:04:32:05 that it's not all about starting a business.

00:04:32:07 - 00:04:35:21 There's there's a lot of potential in acquiring a business.

00:04:35:21 - 00:04:36:33 And I,

00:04:37:01 - 00:04:39:30 I named it myself many private equity.

00:04:39:30 - 00:04:42:30 So I was on this journey to at some point in time

00:04:42:32 - 00:04:46:05 do a mini private equity acquisition.

00:04:46:08 - 00:04:50:13 But after only two years of consulting experience,

00:04:50:15 - 00:04:52:32 I didn't feel like I had the baggage,

00:04:52:32 - 00:04:56:08 the knowledge to to go on that journey.

00:04:56:12 - 00:04:58:11 I wouldn't have been very credible.

00:04:58:11 - 00:05:02:03 So I picked

00:05:02:05 - 00:05:04:09 what I found Iwg,

00:05:04:09 - 00:05:07:27 which is the umbrella company of Regis, the serviced office space provider.

00:05:07:27 - 00:05:13:16 And I, I was lucky enough to over the course of I believe it was seven years

00:05:13:19 - 00:05:18:27 to be part of different corporate functions, sort of the first year

00:05:18:27 - 00:05:23:16 I set up a new business unit with with my then manager.

00:05:23:18 - 00:05:27:06 I then was asked to move into the marketing organization,

00:05:27:06 - 00:05:32:21 which I had absolutely no experience in, but I worked on social media.

00:05:32:21 - 00:05:37:32 So working directly with with Facebook and and LinkedIn and Google,

00:05:38:01 - 00:05:39:25 I was then asked to move to

00:05:39:25 - 00:05:44:04 Malaysia to run the local marketing efforts there.

00:05:44:06 - 00:05:47:19 And after about three years in marketing, I realized, I'm

00:05:47:22 - 00:05:50:18 becoming a marketeer, which is, which is not the goal.

00:05:50:18 - 00:05:56:04 So I asked to change again into a more commercial role, and I led

00:05:56:06 - 00:05:59:09 the global panel of some different services

00:05:59:09 - 00:06:02:09 that we offered to our to our customers.

00:06:02:12 - 00:06:06:08 Then I took a step back again and and realized, what am I missing?

00:06:06:08 - 00:06:11:14 What what do I not feel confident and comfortable with?

00:06:11:16 - 00:06:16:18 And that was really the operational part, managing bigger teams than

00:06:16:21 - 00:06:19:05 5 to 20 people that I had led before.

00:06:19:05 - 00:06:21:22 And so I found

00:06:21:22 - 00:06:24:22 I found that challenge in Shopee, which is best

00:06:24:22 - 00:06:29:31 described the Southeast Asia as Amazon, where I,

00:06:30:00 - 00:06:31:28 I led the Malaysia operations

00:06:31:28 - 00:06:35:26 team that's focused on customer service and the return.

00:06:35:26 - 00:06:38:02 And we found process

00:06:38:02 - 00:06:41:11 which was managing over over a thousand people,

00:06:41:13 - 00:06:44:04 mostly customer service agents

00:06:44:04 - 00:06:47:21 but at post its its own challenges.

00:06:47:24 - 00:06:50:13 And then finally in my last stage before

00:06:50:13 - 00:06:54:05 I started really my my journey, I

00:06:54:08 - 00:06:56:01 stick with stick to shopee.

00:06:56:01 - 00:07:00:31 But I left their Malaysia business development team to sort of close the loop

00:07:00:31 - 00:07:04:05 and also have that had that more sales salesy

00:07:04:06 - 00:07:08:06 experience.

00:07:08:08 - 00:07:09:11 So really,

00:07:09:11 - 00:07:12:13 really intentional, really self-aware of you

00:07:12:13 - 00:07:16:05 to have gone down this road of preparing yourself and looking at areas

00:07:16:05 - 00:07:20:14 where you felt you needed to step outside your comfort zone and augment

00:07:20:14 - 00:07:26:23 your skill set, and taking that leap out of the corporate with Iwg and into

00:07:26:26 - 00:07:30:07 Shopee, albeit it's a large, large firm,

00:07:30:10 - 00:07:33:28 but maybe more a younger firm than, than, than

00:07:33:30 - 00:07:38:08 Iwg decades of establishment,

00:07:38:11 - 00:07:43:02 but but deliberately going out and looking for a 1000 plus workforce

00:07:43:02 - 00:07:46:19 team to manage is is certainly a great way

00:07:46:19 - 00:07:50:17 to baptize yourself by fire.

00:07:50:20 - 00:07:52:04 What do you learn from from having

00:07:52:04 - 00:07:55:17 that many heads and reporting lines

00:07:55:20 - 00:07:57:02 less is better Don't

00:07:57:02 - 00:08:00:21 don't do what I mean I wouldn't do what I believe.

00:08:00:21 - 00:08:04:21 Jensen One has something like 35 direct reports.

00:08:04:21 - 00:08:07:28 I don't think I'm the right person to mirror

00:08:07:28 - 00:08:11:05 his model, but it's

00:08:11:07 - 00:08:15:05 until that point in time, I was always more strategic,

00:08:15:08 - 00:08:18:03 and at that point in time it just becomes luck.

00:08:18:03 - 00:08:21:07 Making small improvements can can actually have

00:08:21:07 - 00:08:24:22 huge, huge impact in already the short term

00:08:24:22 - 00:08:28:13 because you're talking volume, which was which was really interesting.

00:08:28:13 - 00:08:31:19 And then of course the people aspect becomes becomes

00:08:31:19 - 00:08:34:19 a lot more important, making sure you have

00:08:34:22 - 00:08:38:32 because there are multiple management levels here you're managing.

00:08:38:33 - 00:08:42:27 So making sure that you have the right people,

00:08:42:29 - 00:08:43:10 the right

00:08:43:10 - 00:08:47:03 managers at the right place is key as well.

00:08:47:03 - 00:08:49:14 I think to succeed

00:08:49:14 - 00:08:50:23 100%. Yep.

00:08:50:23 - 00:08:52:13 Spoken from to experience.

00:08:52:13 - 00:08:55:06 So you've you've been on this

00:08:55:06 - 00:08:58:23 self-development journey in your career path and then something

00:08:58:23 - 00:09:02:29 sparked in you to go and begin the search to buy a company.

00:09:02:32 - 00:09:06:25 Want to talk us through what the final catalyst was to

00:09:06:26 - 00:09:10:06 to launch Perfects Capital and head on into the world

00:09:10:06 - 00:09:13:06 of acquisition entrepreneurship?

00:09:13:12 - 00:09:15:04 Yes, of course it was.

00:09:15:04 - 00:09:18:05 I still remember very clearly I was

00:09:18:05 - 00:09:22:04 it was about a year before we went more

00:09:22:04 - 00:09:25:28 or less knew we were going to move back from Malaysia to to the UK.

00:09:25:29 - 00:09:28:03 And I knew I was

00:09:28:03 - 00:09:30:14 going to embark on what I was still calling

00:09:30:14 - 00:09:35:05 the mini private equity journey and in my mind that was buying a

00:09:35:07 - 00:09:38:19 mediocre or slightly below mediocre company

00:09:38:19 - 00:09:42:33 that is somewhat in distress, buying it for pennies on the dollar.

00:09:42:33 - 00:09:47:20 And because I'm genius, I'm going to I'm going to of course do well.

00:09:47:23 - 00:09:49:25 But that, of course, completely changed.

00:09:49:25 - 00:09:52:25 I was talking to a Wharton,

00:09:52:33 - 00:09:56:04 Wharton MBA graduate about my mini private equity idea,

00:09:56:04 - 00:09:59:04 and he immediately said, you mean a search fund?

00:09:59:04 - 00:10:03:25 And I had absolutely no idea what what he was talking about.

00:10:03:27 - 00:10:08:00 But I believe the day after I started to delve

00:10:08:00 - 00:10:12:10 into into that world and I went full circle

00:10:12:13 - 00:10:15:10 the first couple of weeks, I was convinced

00:10:15:10 - 00:10:19:33 I was going to do a traditional partner search because you get

00:10:20:02 - 00:10:23:14 it's less risky, it's more fun.

00:10:23:16 - 00:10:27:20 You know, you have two people, it's more

00:10:27:22 - 00:10:29:27 and it just sounded sound nice, right?

00:10:29:27 - 00:10:32:08 Less, less risk, more brainpower.

00:10:32:08 - 00:10:34:15 So happy days

00:10:34:18 - 00:10:35:25 as I spoke to more

00:10:35:25 - 00:10:38:25 and more people in the industry,

00:10:38:26 - 00:10:43:21 that being searchers, investors, as advisors,

00:10:43:24 - 00:10:49:08 it became clear that this might my own personal assessment that well

00:10:49:10 - 00:10:54:22 well once you do partnered, you need bigger deals to make the commercials work.

00:10:54:24 - 00:10:59:14 When you stick to traditional it's it has very clear criteria.

00:10:59:14 - 00:11:04:06 You stick to not not easy to diverse

00:11:04:08 - 00:11:06:18 yet diverse from them.

00:11:06:18 - 00:11:10:04 So eventually after about I think half a year

00:11:10:07 - 00:11:13:25 I decided that self-fund it and I'll do it myself

00:11:13:28 - 00:11:17:33 so a solo self self on that search is is the right thing for me

00:11:18:02 - 00:11:21:31 and I kicked it off roughly in May 2024,

00:11:21:31 - 00:11:26:10 I believe, whilst I was still still in Malaysia.

00:11:26:12 - 00:11:30:33 So that wasn't it was it was a soft, soft launch, I would say.

00:11:31:02 - 00:11:33:28 And that's, that's when it really started.

00:11:33:28 - 00:11:37:28 So you chose the self-funded option very wisely that that kind of dials

00:11:37:28 - 00:11:41:14 in the sort of size of business that one can typically target.

00:11:41:14 - 00:11:45:19 And you mentioned there that you set out to initially acquire a distressed business

00:11:45:19 - 00:11:46:14 and do a turnaround.

00:11:46:14 - 00:11:47:21 That's not actually what you've

00:11:47:21 - 00:11:50:32 subsequently bought by the sounds of it, but we'll get into that in a moment.

00:11:50:32 - 00:11:53:19 You've got something far healthier.

00:11:53:19 - 00:11:55:14 Well, far more personally, luckily.

00:11:55:14 - 00:11:57:23 Yeah, well, quite.

00:11:57:23 - 00:12:01:19 But it's impressive that you set out with that determination that perhaps

00:12:01:19 - 00:12:02:27 you could do a turnaround job.

00:12:02:27 - 00:12:05:27 I think if we set that expectation in ourselves, then

00:12:06:00 - 00:12:10:12 we don't get disappointed by the the candidates that we find.

00:12:10:15 - 00:12:14:22 But you've gone from initially taking that first tentative step,

00:12:14:30 - 00:12:18:16 part time searching whilst in full time employment in a different country

00:12:18:19 - 00:12:22:04 to less than a year later, having got the

00:12:22:07 - 00:12:26:24 the acquisition target found funded negotiated deal over the line.

00:12:26:24 - 00:12:31:08 And you sat there there in the MD's office operating it so

00:12:31:11 - 00:12:34:23 fantastic journey in such an accelerated

00:12:34:26 - 00:12:38:02 timeframe just demonstrates that with concerted effort actually

00:12:38:07 - 00:12:39:07 it's achievable

00:12:39:07 - 00:12:42:07 and there's an abundance of opportunities out there if you grasp them.

00:12:42:10 - 00:12:47:01 So tell us a little bit then about Vista Folio, the acquisition journey.

00:12:47:01 - 00:12:48:30 How did you find them?

00:12:48:30 - 00:12:53:16 What was the the sort of negotiation like,

00:12:53:19 - 00:12:57:15 if you can speak to without betraying confidence sort of deal structure

00:12:57:18 - 00:13:01:23 and possibly the due diligence process, what did you discover along the way

00:13:01:23 - 00:13:06:13 and how did you get it from on paper to over the line?

00:13:06:16 - 00:13:07:23 That's that's a lot of questions.

00:13:07:23 - 00:13:09:18 You have time.

00:13:09:18 - 00:13:11:12 All right. Where do I start?

00:13:11:12 - 00:13:17:22 I first saw this company or

00:13:17:25 - 00:13:19:25 I believe it was May.

00:13:19:25 - 00:13:22:02 It was one of the first ones I ever looked at.

00:13:22:02 - 00:13:24:16 Even it was

00:13:24:16 - 00:13:26:14 it was through a broker.

00:13:26:14 - 00:13:30:10 And I still remember my dad is an architect and I remember him

00:13:30:13 - 00:13:33:20 send sending an email saying, Hey, what do you think of this?

00:13:33:20 - 00:13:36:20 Because it just must it didn't fit

00:13:36:21 - 00:13:39:15 many of the criteria I'd set out for myself.

00:13:39:15 - 00:13:41:02 It just sparked a level of interest.

00:13:41:02 - 00:13:45:04 Like, it's, it's, it's an extremely nice product.

00:13:45:07 - 00:13:49:11 It's it's playing in the premium segment of this

00:13:49:11 - 00:13:53:13 of this niche market that's that's clearly growing.

00:13:53:15 - 00:13:58:27 But because it was a little bit smaller, quite a bit smaller than I initially

00:13:58:30 - 00:13:59:26 set my, my

00:13:59:26 - 00:14:02:28 target EBIT before I didn't give it more

00:14:02:29 - 00:14:07:16 And then a couple of looks and I didn't have an initial conversation.

00:14:07:19 - 00:14:10:15 So just for clarity, I was I was looking for a million

00:14:10:15 - 00:14:15:12 and a half EBIT and above because you have proper management in place.

00:14:15:12 - 00:14:18:32 It's enough to get investors

00:14:19:01 - 00:14:22:15 interested because they can get a decent enough slice of the pie.

00:14:22:15 - 00:14:27:00 And the same goes for for any, for any debt.

00:14:27:03 - 00:14:29:30 I then over to summer

00:14:29:30 - 00:14:33:11 realized that I'm still looking for a needle

00:14:33:11 - 00:14:37:06 in a haystack and I want to expand my search a little bit.

00:14:37:06 - 00:14:40:09 And what that meant for me was still

00:14:40:09 - 00:14:42:13 anything above a million and a half is ideal.

00:14:42:13 - 00:14:47:10 But if I can go significantly below that, so somewhere between half a million

00:14:47:10 - 00:14:52:12 and 750, I can fonti acquisition more or less myself.

00:14:52:12 - 00:14:55:32 If if the multiple isn't all that all that high

00:14:56:01 - 00:14:59:15 and that opened up, then a lot more,

00:14:59:18 - 00:15:00:23 a lot more opportunities.

00:15:00:23 - 00:15:04:02 And I revisited this to Folia.

00:15:04:03 - 00:15:07:06 I started having conversations with, with many different companies

00:15:07:06 - 00:15:14:20 of which Vista Folio was one, and really just liked those conversations.

00:15:14:23 - 00:15:18:04 I liked sell like the owner

00:15:18:07 - 00:15:20:11 or seller of the company.

00:15:20:11 - 00:15:23:28 It became clear that they have a superior product.

00:15:23:31 - 00:15:29:02 I visited the company not not the people didn't get introduced

00:15:29:02 - 00:15:32:13 to the people, but visited their their offices

00:15:32:13 - 00:15:37:05 and saw the product and I was and I was really impressed.

00:15:37:08 - 00:15:42:14 Now, what I, what I had to do then was, okay, do what?

00:15:42:14 - 00:15:44:11 Do I go for it or not?

00:15:44:11 - 00:15:48:23 And what became clear quite quickly was that

00:15:48:25 - 00:15:52:04 getting any debt was going to be very hard

00:15:52:07 - 00:15:53:31 for the simple reason

00:15:53:31 - 00:15:57:03 that the lot, not the majority,

00:15:57:03 - 00:16:01:33 but a big chunk of their revenue comes from outside of the UK.

00:16:01:33 - 00:16:05:14 And as far as I understand, a lot of the private debt funds

00:16:05:17 - 00:16:09:06 have a mandate to support the UK economy.

00:16:09:09 - 00:16:13:26 When you generate a lot of business outside of the UK,

00:16:13:29 - 00:16:17:24 they can't really they can't really fund you.

00:16:17:27 - 00:16:21:03 And it was not really a problem. But

00:16:21:06 - 00:16:22:19 it's it's part of the ecosystem.

00:16:22:19 - 00:16:25:27 I mean, I think that with the growth guarantee scheme loans,

00:16:25:30 - 00:16:30:23 they all kind of to an extent mandated, but there is a risk aversion around

00:16:30:25 - 00:16:33:27 companies heavily dependent on overseas jurisdictions where

00:16:34:01 - 00:16:37:28 they can't necessarily enforce stuff in a UK court for collections purposes.

00:16:37:28 - 00:16:41:09 And you can't just go and use the the

00:16:41:12 - 00:16:45:28 the apparatus that exists in the UK.

00:16:45:30 - 00:16:50:24 It becomes less attractive to to both traditional lenders.

00:16:50:24 - 00:16:54:20 And, you know, the debt funds as you mentioned, sorry to interrupt, but yes.

00:16:54:22 - 00:16:56:23 So no, no, not totally.

00:16:56:23 - 00:16:57:13 And a lot of it's

00:16:57:13 - 00:17:01:10 another find this with these small quantum type deals by comparison,

00:17:01:16 - 00:17:04:33 you know, a lot of the commercial finance space in the UK is geared up towards,

00:17:04:33 - 00:17:09:01 you know, two or 3 million and above deal values.

00:17:09:04 - 00:17:10:26 So it's it's a tradition.

00:17:10:26 - 00:17:16:14 It's a typical challenge to try and find good finance to get these deals done.

00:17:16:22 - 00:17:19:05 How did you overcome that problem?

00:17:19:08 - 00:17:22:17 So so just just to be clear, we're just a UK entity.

00:17:22:17 - 00:17:26:09 It's just that a lot of business is generated overseas

00:17:26:11 - 00:17:30:18 and was enough for the I mean,

00:17:30:20 - 00:17:34:32 there are maybe ten at most ten

00:17:35:01 - 00:17:39:01 debts providers that would consider or

00:17:39:04 - 00:17:41:18 supporting an acquisition

00:17:41:18 - 00:17:44:09 for a business under a million EBITA.

00:17:44:09 - 00:17:47:09 And then with the complication of having that overseas revenue,

00:17:47:15 - 00:17:50:33 I believe almost all, if not all, were we're out of the picture.

00:17:51:02 - 00:17:56:02 So I feel really like the company and I put on a valuation on it

00:17:56:02 - 00:17:59:02 that I thought was fair,

00:17:59:03 - 00:18:02:19 looked into my own pocket, how much I can fund myself.

00:18:02:19 - 00:18:08:05 I don't think it was the right business to attract additional investors into

00:18:08:05 - 00:18:13:05 and it would it would reduce the ROI over time as well. So

00:18:13:08 - 00:18:15:09 I said, here's what I have,

00:18:15:09 - 00:18:19:02 here's what what I think your business is worth.

00:18:19:05 - 00:18:22:19 Let's find a structure that that works for for both of us.

00:18:22:19 - 00:18:24:04 And we

00:18:24:04 - 00:18:25:17 we started negotiating.

00:18:25:17 - 00:18:26:12 We started talking

00:18:26:12 - 00:18:30:08 and eventually we came to something that that both of us were happy with.

00:18:30:08 - 00:18:34:21 And so it's basically myself and the seller funding,

00:18:34:21 - 00:18:37:21 the funding, the acquisition.

00:18:37:29 - 00:18:38:15 Interesting.

00:18:38:15 - 00:18:39:32 So when you say funding,

00:18:39:32 - 00:18:44:25 the seller's retained some equity or no, it's it's the seller notes.

00:18:44:28 - 00:18:47:02 It's a set of notes. Okay.

00:18:47:02 - 00:18:49:29 Now when we talk about seller notes in the UK,

00:18:49:29 - 00:18:54:27 the convention has been interest free deferred consideration.

00:18:54:29 - 00:18:57:27 However, the influence of the US and other markets

00:18:57:27 - 00:19:03:20 where interest is applied to these kinds of arrangements, we're seeing more deals

00:19:03:28 - 00:19:07:32 like this getting done with with a click through the coupon to the

00:19:08:01 - 00:19:10:01 to the seller

00:19:10:01 - 00:19:13:24 was that if you are able to share, was that something

00:19:13:24 - 00:19:17:33 that was in the negotiations in your case?

00:19:18:02 - 00:19:21:02 It was definitely part of the negotiation.

00:19:21:09 - 00:19:24:29 The way we got around that is basically to

00:19:24:31 - 00:19:29:18 speed of repayment is dependent on the performance of the business

00:19:29:18 - 00:19:33:10 with with some buffer right

00:19:33:13 - 00:19:36:00 to make sure that there's always some working

00:19:36:00 - 00:19:41:20 capital retained for the to fuel growth.

00:19:41:23 - 00:19:46:18 But until did there's no seller note anymore

00:19:46:21 - 00:19:50:14 it in my opinion it wouldn't be fair

00:19:50:17 - 00:19:54:14 for for me to walk away with or for the business to retain a lot of money.

00:19:54:14 - 00:19:56:26 So that's how we got around that note.

00:19:56:26 - 00:19:59:26 No coupon, but accelerated payments

00:19:59:31 - 00:20:03:05 paid off dependent on the performance of the business.

00:20:03:08 - 00:20:03:26 Wonderful.

00:20:03:26 - 00:20:06:00 So each party sharing some risk there.

00:20:06:00 - 00:20:09:13 The seller is able to get paid out more rapidly

00:20:09:13 - 00:20:12:13 if the business grows, as you both hope it would.

00:20:12:14 - 00:20:15:00 But in the event that it doesn't, it just gets paid over

00:20:15:00 - 00:20:18:22 a very elastic period of time, I imagine, Right?

00:20:18:24 - 00:20:19:18 Yeah.

00:20:19:18 - 00:20:21:21 It's, as you said, a rise in his five year.

00:20:21:21 - 00:20:22:21 It should be five. Yeah.

00:20:22:21 - 00:20:28:05 I mean equally I'd be very disappointed if, if, if,

00:20:28:08 - 00:20:32:25 if I wouldn't be able to repay this in in five years.

00:20:32:28 - 00:20:33:29 Exactly right.

00:20:33:29 - 00:20:36:13 So that requires a motivated seller. Right.

00:20:36:13 - 00:20:39:13 This this sort of arrangement in a small business

00:20:39:17 - 00:20:42:17 where there's a heavy emphasis on the deferred consideration

00:20:42:25 - 00:20:46:00 or a conditional loan out that requires a motivated seller.

00:20:46:00 - 00:20:50:18 So had they other business activities that they wish to go and pursue,

00:20:50:18 - 00:20:55:23 or was it a retirement age question as we see so often?

00:20:55:26 - 00:20:58:31 Yeah, it's quite it was quite inspirational in a way.

00:20:58:31 - 00:21:01:05 I mean, you see so many

00:21:01:05 - 00:21:04:05 so many business owners

00:21:04:12 - 00:21:07:12 working 70 hours a week

00:21:07:12 - 00:21:11:02 until they're 75 and to have and enjoy life

00:21:11:04 - 00:21:14:19 here the seller is is a little bit younger

00:21:14:22 - 00:21:19:19 and he just wants to enjoy life, I suppose.

00:21:19:22 - 00:21:22:09 So he he wanted to sell.

00:21:22:09 - 00:21:28:16 I think the other consideration for for your viewers and listeners is

00:21:28:19 - 00:21:31:06 oftentimes there's

00:21:31:06 - 00:21:34:21 more or less cash left in the business.

00:21:34:24 - 00:21:38:28 And selling your business is the

00:21:38:31 - 00:21:41:27 tax efficient way or there are tax efficient ways

00:21:41:27 - 00:21:45:12 to extract that cash out of the business

00:21:45:15 - 00:21:47:05 because it can then be capital gains

00:21:47:05 - 00:21:50:22 instead of a dividend or

00:21:50:25 - 00:21:53:31 or worse, like like salary, Right.

00:21:54:00 - 00:21:56:18 So they going to be able to sell as well.

00:21:56:18 - 00:22:00:11 All sellers should be able to benefit from the business asset disposal relief.

00:22:00:11 - 00:22:05:22 You know, we we still get that 1 million lifetime discounted CGT piece.

00:22:05:22 - 00:22:09:07 It still whatever is 14% now under Rachel Reeves,

00:22:09:10 - 00:22:13:00 but it's still better than the 24% that you pay on on the sum above that.

00:22:13:08 - 00:22:17:02 So if if all of this can be treated as deferred consideration and it's done

00:22:17:02 - 00:22:21:21 in a way that the individuals are being paid out for their efforts

00:22:21:23 - 00:22:26:28 as a CGT sorry, as a capital gain, then all the better for everyone.

00:22:26:31 - 00:22:30:21 Arguably glad to hear that potentially the seller was able to structure it

00:22:30:21 - 00:22:33:20 that way in Mr. Photios case.

00:22:33:22 - 00:22:34:15 Yeah, exactly.

00:22:34:15 - 00:22:39:18 So so so I mean, his motivations were were clear and I just wanted a fair deal

00:22:39:18 - 00:22:43:09 where it was clear I wasn't trying to squeeze the lemon.

00:22:43:12 - 00:22:46:13 All I was trying to look I want it's in our

00:22:46:19 - 00:22:49:17 it's in both of our benefits

00:22:49:17 - 00:22:52:28 to repay him as soon as possible.

00:22:53:02 - 00:22:53:18 Absolutely.

00:22:53:18 - 00:22:54:24 But you were motivated

00:22:54:24 - 00:22:57:28 to come in and grow this business, which should be to everyone's benefit.

00:22:57:29 - 00:22:58:26 Right.

00:22:58:26 - 00:23:01:07 And of course, that requires an element of trust from the seller.

00:23:01:07 - 00:23:06:02 And you're an incredibly trustworthy person, hugely competent and

00:23:06:05 - 00:23:08:13 credible in running this business,

00:23:08:13 - 00:23:11:17 you know, given your personality and your career history.

00:23:11:17 - 00:23:16:05 So I'm sure that that was the area that you had to really,

00:23:16:08 - 00:23:20:23 you know, overemphasize on is making sure that you had trust in the seller

00:23:20:23 - 00:23:23:23 and they had trust in you and that, you know, this felt like a partnership

00:23:23:28 - 00:23:26:33 to some extent because you're you're tied together for up to five years there.

00:23:27:00 - 00:23:33:33 So and it's definitely there now there are also structures in place to

00:23:34:02 - 00:23:37:24 so just in case that I do extremely stupid things

00:23:37:24 - 00:23:40:30 and burn the business down to the ground, that

00:23:40:33 - 00:23:43:23 he's somewhat protected, just like just like a bank.

00:23:43:23 - 00:23:45:19 It's just like a bank would be.

00:23:45:19 - 00:23:48:13 But it's, it's

00:23:48:13 - 00:23:51:24 I'd like to think it's a it's a good deal for both of us.

00:23:51:26 - 00:23:53:08 It sounds like an exemplary deal.

00:23:53:08 - 00:23:55:15 And it sounds like the sort of deal

00:23:55:15 - 00:23:59:07 that many aspiring self-funded searchers could take lessons from

00:23:59:09 - 00:24:04:03 because there are an abundance of businesses of this sort of size

00:24:04:06 - 00:24:08:23 with this kind of demographic of of motivated seller

00:24:08:26 - 00:24:12:06 for whom this kind of deal structure is an ideal

00:24:12:06 - 00:24:16:04 solution to the absence of good commercial finance at this level.

00:24:16:07 - 00:24:18:22 So glad to hear you. You made it work.

00:24:18:22 - 00:24:21:08 You almost achieved what many believed to be impossible.

00:24:21:08 - 00:24:23:10 So congratulations to you.

00:24:23:10 - 00:24:29:25 What has the adjustment been like coming from the corporate world to running? Mr.

00:24:29:25 - 00:24:31:26 Folio Now,

00:24:31:26 - 00:24:34:25 you know, what were the first few things that you encountered

00:24:34:25 - 00:24:39:05 in terms of the way of working that maybe you had to adjust to?

00:24:39:08 - 00:24:43:29 So don't get any emails after six.

00:24:43:32 - 00:24:45:12 That's true.

00:24:45:12 - 00:24:48:26 My my time, like, I still work

00:24:48:28 - 00:24:51:03 fairly, fairly long hours, but

00:24:51:03 - 00:24:54:13 my time after six is this my time

00:24:54:16 - 00:24:58:18 And I can focus solely on the things that that I want to focus on.

00:24:58:18 - 00:25:00:10 Whereas

00:25:00:10 - 00:25:03:17 depending on which company you work for, that's,

00:25:03:19 - 00:25:06:10 that's not the case.

00:25:06:10 - 00:25:08:00 The other things were

00:25:08:00 - 00:25:10:15 are sort of what you would expect.

00:25:10:15 - 00:25:12:19 It's really all hands on deck.

00:25:12:19 - 00:25:15:30 You're juggling a lot of different balls

00:25:15:33 - 00:25:18:16 in a lot of different functions.

00:25:18:16 - 00:25:22:02 We're revamping our marketing

00:25:22:05 - 00:25:24:04 products that have been made for ten years.

00:25:24:04 - 00:25:29:19 You'd think production is a breeze, but you still need to focus so much on on

00:25:29:20 - 00:25:32:15 on guaranteeing the qualities, especially because we're

00:25:32:15 - 00:25:33:32 we're selling a premium product.

00:25:33:32 - 00:25:40:12 So it's yeah, that, that quality that QC processes is so important.

00:25:40:15 - 00:25:41:28 I'm for the rest.

00:25:41:28 - 00:25:46:11 I tried to live by the mantra of don't,

00:25:46:18 - 00:25:52:14 don't change too many things in the first year of your acquisition.

00:25:52:17 - 00:25:55:14 So I'm not trying to change the world.

00:25:55:14 - 00:25:57:02 We're

00:25:57:02 - 00:25:58:27 currently

00:25:58:27 - 00:26:02:11 moving away from sort of an old ish accounting

00:26:02:11 - 00:26:05:11 software and integrating

00:26:05:12 - 00:26:08:04 integrating Xero, which

00:26:08:04 - 00:26:09:13 is more futureproof.

00:26:09:13 - 00:26:13:31 I assume we're working with Pipedrive

00:26:13:31 - 00:26:19:15 instead of Excel sheets to, to track our track our sales progress.

00:26:19:18 - 00:26:23:12 So it's not changing the world, but mainly making it

00:26:23:15 - 00:26:27:12 in a way a little bit easier to run the business moving forward.

00:26:27:15 - 00:26:28:27 So it's those, those small changes.

00:26:28:27 - 00:26:32:21 So nice, necessary kind of adoption

00:26:32:21 - 00:26:36:05 of popular cloud based tooling.

00:26:36:08 - 00:26:38:18 That's often where

00:26:38:18 - 00:26:41:33 acquisition entrepreneurs put their emphasis is, you know,

00:26:42:01 - 00:26:47:32 can we get these businesses running on rails that scale and rails that

00:26:48:01 - 00:26:50:19 don't have a platform risk and all that kind of stuff.

00:26:50:19 - 00:26:52:22 So we're moving off of hosted on premises.

00:26:52:22 - 00:26:54:22 Sage, for example, to a cloud based Xero.

00:26:54:22 - 00:26:57:30 Was that options there. Yeah

00:26:57:33 - 00:26:58:20 Yeah.

00:26:58:20 - 00:27:03:13 So how is your sentiment how, how are you feeling like

00:27:03:16 - 00:27:06:23 the deal was completed when

00:27:06:25 - 00:27:08:11 mid-February.

00:27:08:11 - 00:27:08:29 February Right.

00:27:08:29 - 00:27:12:23 So month for House.

00:27:12:25 - 00:27:15:06 Yeah, I suppose so, yeah.

00:27:15:06 - 00:27:18:33 It doesn't feel like it feels like week four.

00:27:19:02 - 00:27:21:20 Exactly. Now. I feel great.

00:27:21:20 - 00:27:27:05 It's very strange that on days I can't wait to

00:27:27:08 - 00:27:31:20 look at my emails again and Sunday evening that is.

00:27:31:23 - 00:27:35:05 Can't wait for a monday to start basically because there's

00:27:35:07 - 00:27:39:13 there are many things on on my plate and everyone's played in the company

00:27:39:16 - 00:27:42:01 and it's all it's all exciting stuff.

00:27:42:01 - 00:27:45:17 And even though, as I mentioned, a lot of our business is overseas

00:27:45:17 - 00:27:51:17 and we just had to go through the Trump tariffs and a lot of our businesses

00:27:51:17 - 00:27:55:24 with with the US and we we manufacture in China.

00:27:55:28 - 00:27:58:30 So when tariffs are 148%,

00:27:58:30 - 00:28:03:01 it poses a quite a big challenge for for our business.

00:28:03:04 - 00:28:05:21 But we we stay calm

00:28:05:24 - 00:28:08:23 and now that it's at a more reasonable level,

00:28:08:23 - 00:28:12:00 not yet reasonable, but more reasonable work, we're

00:28:12:00 - 00:28:16:19 definitely more than back in business with with those customers as well.

00:28:16:22 - 00:28:19:22 So I'm I'm really pumped up.

00:28:19:22 - 00:28:22:14 I'm very happy with the team that I have.

00:28:22:14 - 00:28:25:14 So happy days so far.

00:28:25:17 - 00:28:26:17 Really great to hear that.

00:28:26:17 - 00:28:31:05 And again, what a wonderful exemplar of the sort of end game.

00:28:31:08 - 00:28:34:08 You know, many people

00:28:34:15 - 00:28:35:28 that are in knee deep

00:28:35:28 - 00:28:39:28 in search will be delighted to hear that, you know, there is a light

00:28:39:28 - 00:28:40:22 at the end of the tunnel.

00:28:40:22 - 00:28:44:09 And actually that's that's that light is warming

00:28:44:09 - 00:28:49:02 and jubilant and actually, you know is operating

00:28:49:02 - 00:28:52:30 is a joy that that is the goal that we all cling to.

00:28:52:30 - 00:28:54:11 I think, during the search process.

00:28:54:11 - 00:28:57:20 So I'm really glad to hear that that's been your experience.

00:28:57:22 - 00:29:00:03 But you mentioned there about the Trump tariffs

00:29:00:03 - 00:29:05:29 and some operational headwinds that maybe are needing navigating.

00:29:05:32 - 00:29:06:14 Yeah.

00:29:06:14 - 00:29:11:02 How are you feeling about the road ahead there?

00:29:11:04 - 00:29:14:04 A really good worth.

00:29:14:07 - 00:29:18:27 So I think with the Trump tariffs, we managed to navigate them.

00:29:18:27 - 00:29:21:27 I think even if they stay at as high as they were, which

00:29:21:27 - 00:29:24:27 which was unlikely, I think we

00:29:24:29 - 00:29:27:32 we would have found found ways

00:29:27:32 - 00:29:31:25 for our customers to still sell our products

00:29:31:28 - 00:29:33:19 by changing our shipping terms,

00:29:33:19 - 00:29:37:01 for example, and making at the moment

00:29:37:04 - 00:29:40:24 it's a bit technical, but at the moment our customers

00:29:40:27 - 00:29:43:18 pay us X works and they take care of the shipping,

00:29:43:18 - 00:29:46:14 so they pay tariffs on the full, on the full amount.

00:29:46:14 - 00:29:50:08 If we would import for them, we would pay tariffs on on our production

00:29:50:08 - 00:29:53:33 cost basically, which would be significantly less.

00:29:54:02 - 00:29:56:24 So that's one way we could we could have

00:29:56:27 - 00:29:59:11 navigated that challenge.

00:29:59:11 - 00:30:04:00 Yeah, mitigating the tariffs to the extent by factoring out the margin

00:30:04:03 - 00:30:06:32 and exactly exactly that.

00:30:06:32 - 00:30:11:07 So that was what I realized that that was totally fine as 60% tariffs

00:30:11:09 - 00:30:17:00 when you get to 150%, even even then, it it becomes a challenge

00:30:17:00 - 00:30:21:16 not not something we couldn't overcome, but definitely a challenge.

00:30:21:19 - 00:30:25:21 But yeah, we continue to focus on product development,

00:30:25:24 - 00:30:29:23 which is something that really makes this company unique.

00:30:29:23 - 00:30:36:09 A lot of our competitors, they buy off the shelf products from China

00:30:36:09 - 00:30:40:26 and then sell it, but they might brand it and then resell it.

00:30:40:29 - 00:30:42:23 We I mean, you see it behind me.

00:30:42:23 - 00:30:47:13 We have an R&D facility where we

00:30:47:16 - 00:30:49:18 we develop our own products

00:30:49:18 - 00:30:53:10 and then we work and then we, we manufacture them and we sell them.

00:30:53:10 - 00:30:57:00 So it's it's all unique products.

00:30:57:03 - 00:30:59:33 And so we listen to our customers, what are we missing?

00:30:59:33 - 00:31:02:11 And then we figure out a way to to develop it.

00:31:02:11 - 00:31:04:10 So, so far, I look,

00:31:04:10 - 00:31:08:14 I look at the future quite positively, but we'll we'll see what it brings.

00:31:08:17 - 00:31:10:06 So it's a fairly globalized operation.

00:31:10:06 - 00:31:12:31 You mentioned that earlier that your revenues

00:31:12:31 - 00:31:17:09 are largely from around the world, not purely in the UK.

00:31:17:11 - 00:31:18:10 And clearly you've got

00:31:18:10 - 00:31:22:13 a globalized manufacturing base there with production in in Asia.

00:31:22:13 - 00:31:27:12 So the core team are UK based in terms of

00:31:27:16 - 00:31:31:30 commercial business development, marketing, finance, etc., correct?

00:31:31:31 - 00:31:34:14 Yeah, we're all we're all in the UK.

00:31:34:14 - 00:31:38:03 We do mix, but we have a person in China that

00:31:38:05 - 00:31:40:33 takes care of, of quality control for the rest.

00:31:40:33 - 00:31:44:32 At the moment we are solely UK based.

00:31:45:01 - 00:31:45:25 Fabulous.

00:31:45:25 - 00:31:48:13 And how have they adjusted to having a new owner?

00:31:48:13 - 00:31:49:11 Because I imagine

00:31:49:11 - 00:31:54:23 a number will have had, you know, years of working with the the seller.

00:31:54:25 - 00:31:55:16 What's the reception

00:31:55:16 - 00:31:58:16 been like from the workforce?

00:31:58:19 - 00:31:59:29 I'll give you my perspective.

00:31:59:29 - 00:32:04:06 That might not be their perspective.

00:32:04:09 - 00:32:06:06 I mean, as far as I can tell, really.

00:32:06:06 - 00:32:08:01 Well,

00:32:08:01 - 00:32:10:00 it's as you can imagine,

00:32:10:00 - 00:32:13:28 given that the seller was already

00:32:13:31 - 00:32:18:05 contemplating or strongly considering retiring,

00:32:18:08 - 00:32:23:02 he had spent less and less time together with with the team.

00:32:23:04 - 00:32:27:08 And I think it was a welcome new level of energy,

00:32:27:08 - 00:32:31:10 just just having someone there to brainstorm with

00:32:31:13 - 00:32:33:20 to help guide them.

00:32:33:20 - 00:32:36:32 I think everyone really, really appreciates that,

00:32:36:32 - 00:32:42:07 and I'd like to think that my leadership style is very collaborative.

00:32:42:10 - 00:32:45:09 I don't like managers that think they're

00:32:45:09 - 00:32:48:11 the smartest person on every subject in the room.

00:32:48:11 - 00:32:53:05 Those are the ones that I yeah, that I don't didn't get along with.

00:32:53:05 - 00:32:56:00 Luckily, I had didn't have too many of those.

00:32:56:00 - 00:32:59:10 But I know I see my job as enabling

00:32:59:10 - 00:33:04:13 a conversation and then reaching a conclusion rather than

00:33:04:16 - 00:33:08:07 imposing tutus on the team.

00:33:08:09 - 00:33:11:20 That must be a lovely culture

00:33:11:20 - 00:33:15:22 to establish or to continue whereby the workforce

00:33:15:22 - 00:33:19:32 feel valued and able to contribute and drive the direction of the company.

00:33:19:32 - 00:33:24:03 And certainly that's the secret to scaling often in a in a human centric

00:33:24:03 - 00:33:28:02 business is make sure you've got people that you can trust and delegate to

00:33:28:02 - 00:33:32:06 that want to be part of the solution and great to see that playing out.

00:33:32:08 - 00:33:34:28 So if you had any advice

00:33:34:28 - 00:33:38:02 for, you know, new acquirers,

00:33:38:04 - 00:33:42:00 successful searchers who have got their deals over the line,

00:33:42:03 - 00:33:47:18 what could you offer to someone facing those initial months of operation?

00:33:47:20 - 00:33:51:13 What might you what wisdoms might you pass on?

00:33:51:15 - 00:33:54:09 I don't think I'm going to say anything new here, but

00:33:54:09 - 00:33:58:24 listen and observe before before acting is probably the

00:33:58:27 - 00:34:00:03 the most important one.

00:34:00:03 - 00:34:06:05 Don't don't change something that isn't broken.

00:34:06:08 - 00:34:08:11 And I'd say that's

00:34:08:11 - 00:34:13:08 there's nothing more important than those in those initial couple of months

00:34:13:11 - 00:34:16:14 because you didn't like hopefully you didn't buy a business that's that's

00:34:16:14 - 00:34:16:33 broken.

00:34:16:33 - 00:34:21:20 When I mentioned that earlier, that was me in my in my early days

00:34:21:22 - 00:34:24:13 when I thought like, a turnaround sounds kind of fun.

00:34:24:13 - 00:34:26:29 I would, but I would have never done it.

00:34:26:29 - 00:34:31:22 Now I now know that it's much better to to buy a

00:34:31:25 - 00:34:34:24 by a really solid business

00:34:34:24 - 00:34:40:12 and you you make your money or your wealth through leverage

00:34:40:12 - 00:34:47:01 and through growth of that steady business rather than betting on the turnaround.

00:34:47:04 - 00:34:51:03 But yeah, listen, listen, listen, listen.

00:34:51:06 - 00:34:55:02 Nice listening is is certainly key in that people centric culture.

00:34:55:08 - 00:34:58:16 But from what you said there about, you know,

00:34:58:19 - 00:35:01:29 believing the energy would be, well spent in a turnaround

00:35:01:29 - 00:35:06:04 and that that would deliver the the upside actually being able to deploy that

00:35:06:04 - 00:35:11:03 same energy into an established business and not be firefighting being to,

00:35:11:05 - 00:35:14:28 you know, do value creation with a stable foundation.

00:35:14:31 - 00:35:18:05 That is a fundamentally different task,

00:35:18:05 - 00:35:21:26 but maybe one that leads to a happier life along the way.

00:35:21:28 - 00:35:23:07 For sure. For sure.

00:35:23:07 - 00:35:26:14 Having done a few transformations back in the day,

00:35:26:20 - 00:35:29:24 those those are usually not the most fun.

00:35:29:24 - 00:35:32:28 And it's it's much more risky right here.

00:35:32:28 - 00:35:36:00 You're taking a gamble that you're going to be able to pull it

00:35:36:00 - 00:35:39:08 off, whereas you buy something that's already doing well.

00:35:39:08 - 00:35:42:29 It's the risk profile is so much lower.

00:35:42:32 - 00:35:43:26 Indeed.

00:35:43:26 - 00:35:48:09 Now, I'd love to get into Etta more generally with you as an asset

00:35:48:09 - 00:35:52:02 class in a sec because you know, you and I first met mid last year,

00:35:52:05 - 00:35:55:22 beginning of your search journey and

00:35:55:25 - 00:35:56:23 you know, at that time you

00:35:56:23 - 00:36:02:01 were also exploring other avenues, other other Etta opportunities.

00:36:02:03 - 00:36:06:25 I just before we move into that, I'd love to just hear from you,

00:36:06:27 - 00:36:09:20 a reflection on,

00:36:09:20 - 00:36:11:08 you know, the last 12 months

00:36:11:08 - 00:36:15:09 whether you'd like to have done anything differently.

00:36:15:12 - 00:36:17:20 You know, if looking back now through the lens

00:36:17:20 - 00:36:20:29 and it must have happened, you know, in a flash.

00:36:20:32 - 00:36:24:05 But is there anything that you've learned that maybe you would go back

00:36:24:05 - 00:36:28:05 and do differently?

00:36:28:08 - 00:36:32:09 I think I've been incredibly lucky, to be honest.

00:36:32:11 - 00:36:35:29 I've I've always I think that that the change I made over

00:36:35:29 - 00:36:39:03 the summer to be open to slightly smaller

00:36:39:03 - 00:36:42:10 deals, to do it like that, just massively increased.

00:36:42:10 - 00:36:44:32 I think the likelihood of

00:36:44:32 - 00:36:47:03 being successful, i.e.

00:36:47:03 - 00:36:51:08 acquiring acquiring a company. So

00:36:51:11 - 00:36:53:14 might

00:36:53:14 - 00:36:56:02 if my strong recommendation for the people

00:36:56:02 - 00:36:59:11 that can would be to do go to self-funded route

00:36:59:14 - 00:37:03:03 maybe more so and in the UK and

00:37:03:06 - 00:37:05:28 then then outside of the UK,

00:37:05:28 - 00:37:10:08 just because you have so much competition from private equity

00:37:10:08 - 00:37:16:13 that plays really in the in the small cap market already and that has,

00:37:16:16 - 00:37:18:32 that has just increased my likelihood of success.

00:37:18:32 - 00:37:23:32 Just be more, more open to looking at nontraditional

00:37:24:01 - 00:37:27:23 search companies mean this the folio doesn't

00:37:27:23 - 00:37:31:18 take a lot of the books it's like there's no recurring revenue.

00:37:31:18 - 00:37:35:14 There's repeat revenue, which in in many instances

00:37:35:14 - 00:37:37:10 actually is more more sticky debt

00:37:37:10 - 00:37:39:03 and then recurring because people come back

00:37:39:03 - 00:37:42:11 because they like your product, not because you tie them into

00:37:42:11 - 00:37:46:28 long term agreements. It

00:37:46:31 - 00:37:49:23 they're just definitely a bit more risk involved

00:37:49:23 - 00:37:54:30 than an electrical tech testing business that are looked at.

00:37:54:33 - 00:37:59:17 But the level of excitement that I felt when looking at this business versus

00:37:59:20 - 00:38:02:20 versus older, more steady,

00:38:02:27 - 00:38:05:31 slow growing businesses was day and night different.

00:38:05:31 - 00:38:09:10 So beat my recommendation.

00:38:09:10 - 00:38:12:18 My biggest learning is be open to

00:38:12:20 - 00:38:15:31 to nontraditional companies and just just have a look at it

00:38:15:31 - 00:38:18:32 and speak to speak to as many people as possible

00:38:18:32 - 00:38:22:14 So I will going back to your question, I probably wouldn't change that much,

00:38:22:14 - 00:38:26:05 but I only say it is because I feel like I've I've been lucky enough

00:38:26:05 - 00:38:30:04 to come across this company and managed to get this one over the line.

00:38:30:04 - 00:38:35:06 I didn't have to go through submitting five alloys and go through

00:38:35:08 - 00:38:38:06 two or three due diligence processes.

00:38:38:06 - 00:38:40:24 So I got Akamai blessings.

00:38:40:24 - 00:38:41:14 Yeah, absolutely.

00:38:41:14 - 00:38:45:04 But I guess maybe if there's anything it would have been opening your mind

00:38:45:04 - 00:38:49:13 to lower Egbert businesses earlier, perhaps from the start.

00:38:49:18 - 00:38:50:15 Yeah, exactly.

00:38:50:15 - 00:38:50:33 Exactly.

00:38:50:33 - 00:38:54:07 Never, never say no to just looking at a deal.

00:38:54:10 - 00:38:57:11 And so how far did you lower the bar?

00:38:57:11 - 00:39:01:25 Every bit down from your original 1.5 million plus target?

00:39:01:27 - 00:39:04:03 We didn't I don't think.

00:39:04:03 - 00:39:07:24 No. I looked at 500 K and above.

00:39:07:26 - 00:39:08:17 Right. Yeah.

00:39:08:17 - 00:39:12:18 So still material businesses that have got, you know, some that's going

00:39:12:18 - 00:39:17:12 to indicate a team, you know regular customer, sensible overhead base etc.

00:39:17:12 - 00:39:19:11 etc.. So that's good, That's great.

00:39:19:11 - 00:39:23:18 And I would encourage many self-funded searches to look at that bar as well.

00:39:23:25 - 00:39:24:00 You're going

00:39:24:00 - 00:39:27:00 to have to have operational involvement, but that's what you're trying to buy

00:39:27:06 - 00:39:28:19 so far though.

00:39:28:19 - 00:39:31:32 Yeah, I mean, there are plenty of people also just looking to

00:39:31:32 - 00:39:35:33 to buy and build and operate and they would like it's more of an M&A

00:39:36:02 - 00:39:39:16 activity then than than anything else.

00:39:39:16 - 00:39:44:00 But I really like I get excited by the operating

00:39:44:02 - 00:39:46:12 Exactly good

00:39:46:12 - 00:39:50:32 So yeah let's let's talk about ETA as an investment class

00:39:50:32 - 00:39:54:07 because we did in our original chat last year.

00:39:54:10 - 00:39:57:10 Have you seen that space evolve?

00:39:57:17 - 00:40:02:15 What do you think is making it increasingly compelling to alternative

00:40:02:18 - 00:40:06:04 asset class investors?

00:40:06:07 - 00:40:09:06 It's you have to look at the whole, I suppose,

00:40:09:06 - 00:40:13:07 investment class or investment ecosystem.

00:40:13:10 - 00:40:15:04 If you look at

00:40:15:04 - 00:40:19:07 the S&P 500 in particular,

00:40:19:10 - 00:40:21:28 even after everything that's happened,

00:40:21:28 - 00:40:26:19 that it's close to its peak in terms of price earnings.

00:40:26:22 - 00:40:29:30 And so it's hard to see how over the next decade

00:40:29:30 - 00:40:34:14 it will perform as well as over the past decade.

00:40:34:17 - 00:40:36:02 So you put that aside.

00:40:36:02 - 00:40:41:22 Then there I mean, there's just so many there's so many possible stories like mine

00:40:41:22 - 00:40:46:13 to be made letter that's self-funded or or in a traditional space.

00:40:46:13 - 00:40:50:02 And a lot of investors have realized that.

00:40:50:02 - 00:40:52:03 And where

00:40:52:06 - 00:40:53:06 you probably know more

00:40:53:06 - 00:40:57:09 about this, Gareth me, but I see more and more

00:40:57:12 - 00:41:02:05 individual investors, usually people that have successfully sold

00:41:02:05 - 00:41:07:18 to their own company, but they have this wealth of knowledge built over time

00:41:07:18 - 00:41:11:21 and they're setting up funds of search funds that

00:41:11:24 - 00:41:15:23 for people with spare cash,

00:41:15:25 - 00:41:20:20 I believe are very good vehicles to do investing

00:41:20:23 - 00:41:24:06 because you you stretch your risk immensely.

00:41:24:09 - 00:41:27:29 Just they tend to invest in I mean depending on the fund size,

00:41:27:29 - 00:41:33:21 but they might invest in 4050 searchers and then do

00:41:33:23 - 00:41:35:30 10 to 25 follow up investments

00:41:35:30 - 00:41:40:20 and the usual search fund economics apply to this.

00:41:40:20 - 00:41:46:22 And so your your IRR over a five or ten year period, good

00:41:46:23 - 00:41:50:27 If all goes well and if it's well managed, should be pretty decent.

00:41:50:30 - 00:41:52:05 There are a few of those.

00:41:52:05 - 00:41:52:30 I think there are.

00:41:52:30 - 00:41:56:12 You might I'm just talking to a few people at the moment, I believe.

00:41:56:12 - 00:42:02:10 And in France there are a few that that are being set up at the moment.

00:42:02:13 - 00:42:06:06 So yeah, a lot of a lot of a lot of things are happening in the space for for sure.

00:42:06:06 - 00:42:10:27 And and again, I I'm not the riskiest person

00:42:10:30 - 00:42:14:09 so having the to invest in search

00:42:14:12 - 00:42:19:02 without having to pick individual winners or losers

00:42:19:05 - 00:42:21:19 kind of satisfies that

00:42:21:19 - 00:42:24:16 that need without doing a lot of work.

00:42:24:16 - 00:42:28:12 And of course your your return will be slightly smaller

00:42:28:12 - 00:42:31:12 than if you would only invest into good deals.

00:42:31:18 - 00:42:34:11 But that's by nature.

00:42:34:11 - 00:42:37:16 So yeah, that's fund investing and it's an exciting time

00:42:37:22 - 00:42:39:24 for funds in this space, Most certainly.

00:42:39:24 - 00:42:44:22 So just before we wrap up, looking ahead to the future of Vista Folio,

00:42:44:22 - 00:42:49:04 I know it's, you know, still first half of the year of the year one,

00:42:49:07 - 00:42:52:21 but where would you like to see it be in sort of five years time?

00:42:52:21 - 00:42:54:18 What's your what's your ambitions for it?

00:42:54:18 - 00:42:58:09 I guess sell a note paid off early and then

00:42:58:12 - 00:42:59:16 Yeah I mean that's

00:42:59:16 - 00:43:03:22 I it's my first, second and third priority, right?

00:43:03:22 - 00:43:09:20 Just just make sure making sure that I fulfill on that obligation,

00:43:09:22 - 00:43:14:03 all the rest is, is, is sort of on the sidelines.

00:43:14:05 - 00:43:18:23 No, I just like to solidify our position where we are.

00:43:18:25 - 00:43:20:08 I think

00:43:20:08 - 00:43:22:15 the products are there.

00:43:22:15 - 00:43:24:29 And that was really the the bread and butter

00:43:24:29 - 00:43:28:26 of what the previous owner brought to the table.

00:43:28:29 - 00:43:31:11 He was an award winning horticulturist.

00:43:31:11 - 00:43:33:08 So landscaper.

00:43:33:08 - 00:43:37:06 So he knows plants inside out and they're they're second to none.

00:43:37:09 - 00:43:40:04 So it's really how do we build a bigger

00:43:40:04 - 00:43:43:13 commercial engine around around to company

00:43:43:16 - 00:43:46:09 making sure we are

00:43:46:09 - 00:43:51:15 selling more into geographies like the Middle East, for example.

00:43:51:17 - 00:43:54:24 I mean, we sell artificial green

00:43:54:24 - 00:43:58:22 walls and plants and trees and hedges.

00:43:58:25 - 00:43:59:33 That stuff is hard to grow.

00:43:59:33 - 00:44:02:28 They're not impossible, but it's hard and expensive to grow.

00:44:02:28 - 00:44:07:28 So that's kind of a natural market for us where we're already active,

00:44:07:30 - 00:44:10:13 but we can do a lot more.

00:44:10:16 - 00:44:13:22 And same with countries like Germany, France.

00:44:13:22 - 00:44:14:12 So it's really

00:44:14:12 - 00:44:15:16 and then of course, there is there is

00:44:15:16 - 00:44:19:16 there are our home markets where we're scratching the surface as well.

00:44:19:19 - 00:44:23:00 So it's steady growth without

00:44:23:02 - 00:44:24:26 doing stupid things.

00:44:24:26 - 00:44:27:32 And then we'll see where we end in five years.

00:44:28:06 - 00:44:31:06 Hard to say We can.

00:44:31:10 - 00:44:33:31 Yeah, there's so many variables where we can.

00:44:33:31 - 00:44:39:01 I'd like to think we can double this business in five years, if not tripled.

00:44:39:04 - 00:44:43:28 Well, we'll have to speak again then to see how how far we've come.

00:44:43:30 - 00:44:44:29 I'll hold you to that.

00:44:44:29 - 00:44:50:27 But I'm, I'm, I'm sure that you'll deliver something on the road to those results.

00:44:50:27 - 00:44:51:12 Most certainly.

00:44:51:12 - 00:44:56:20 You're a steady pair of hands with some, you know, amazing career history.

00:44:56:20 - 00:44:59:20 So I think growth is definitely on the cards.

00:44:59:21 - 00:45:01:01 And I'd love you to come back and tell us

00:45:01:01 - 00:45:04:05 how much growth you've achieved and how imperfect that be.

00:45:04:05 - 00:45:05:31 Great said.

00:45:06:00 - 00:45:09:00 So, yeah, we'll wrap up.

00:45:09:03 - 00:45:09:31 Thank you so much.

00:45:09:31 - 00:45:13:09 Said for, you know, the

00:45:13:12 - 00:45:14:33 kindness that you've shown in sharing

00:45:14:33 - 00:45:18:13 your incredible journey and your experience with us today.

00:45:18:15 - 00:45:22:24 It's really kind of brought home the realities of what's possible in search

00:45:22:24 - 00:45:27:19 and then what life is like in the first few months following an acquisition,

00:45:27:19 - 00:45:28:08 getting over the line.

00:45:28:08 - 00:45:31:13 So really has been inspiring to hear your passion for the business.

00:45:31:13 - 00:45:35:18 And I'm sure our listeners will join me in wishing you well.

00:45:35:21 - 00:45:39:32 Listeners, you can connect with step via his LinkedIn profile

00:45:40:01 - 00:45:43:11 and obviously can visit

00:45:43:14 - 00:45:46:30 Vista Folio on their website at Vista folio dot

00:45:46:30 - 00:45:51:05 com to find out a bit more about the business that that set now runs.

00:45:51:08 - 00:45:55:05 And we hope he said he's going to join us on the 18th of June

00:45:55:08 - 00:45:58:16 as one of our exemplar for

00:45:58:19 - 00:45:59:29 successful searchers

00:45:59:29 - 00:46:05:16 who have managed to get acquisitions done in recent months at the symposium.

00:46:05:19 - 00:46:08:27 We're running on the 18th of June for serial acquirers and searches

00:46:08:27 - 00:46:09:20 and hold co builders.

00:46:09:20 - 00:46:13:10 So that's in central London on the 18th June Visit Serial acquirer

00:46:13:13 - 00:46:16:07 UK to get your day pass and make myself

00:46:16:07 - 00:46:21:14 said and almost 200 other searcher acquirers and investors in the space

00:46:21:16 - 00:46:24:12 looking forward to seeing you there so great sip

00:46:24:12 - 00:46:27:11 we wish you well and thanks very much.

00:46:27:11 - 00:46:30:30 I know you're heading off around the world soon, so

00:46:30:33 - 00:46:32:07 we'll leave you to your travels.

00:46:32:07 - 00:46:35:30 But do come back again and tell us how you got on and we'll see you on the 18th.

00:46:35:33 - 00:46:37:05 Thank you, everybody, for now.

00:46:37:05 - 00:46:40:05 And keep on crunching.

00:46:40:09 - 00:46:41:02 Thanks very much, Gareth.