Episode Transcript
[00:00:01] Speaker A: Welcome to the Dealmaker Uncut podcast where we speak to some of the UK's most exciting entrepreneurs and hear their investment journeys. We'll discuss the challenges, successes and lessons they've learned along the way with expert deals commentary from Jonathan Boyers, Head of Alvarez and Marcel Corporate Finance, and me, Chris McGuire, executive editor at Business Cloud. Welcome everyone to the latest episode of the Dealmaker Uncut podcast, powered by by Alvarez and Marcel. My name is Chris McGuire and I'm the Executive Editor of Business Cloud and it's good to be back alongside my good friend and multiple award winning dealmaker himself, Jonathan Boyers. Jonathan's been involved in deals totaling more than 5 billion pounds during his long and illustrious career and he's a managing partner and head of Alvarez and Marcel's corporate finance practice in the uk. A good morning to you, Jonathan.
[00:00:49] Speaker B: Morning Chris. It's great to be back for the next series of the podcast. We're going to be interviewing some really great people earn over the next few episodes and particularly good one today.
[00:01:00] Speaker A: Very good. A lovely introduction. And before we introduce our special guest, a quick shout out to what media who produce the Dealmaker on podcast. They're the specialists in video production and video technology and we're delighted to be working with them. For any new listeners to the show or viewers. In the first part of the show we're going to be interviewing our very special guests and then we'll have a little break and in part two we'll be reflecting on the interview that we've just done before. Jonathan leans on his 35 years of experience in the corporate finance world to answer questions from our listeners. Now there's an international feel to today's interview. Who are we speaking to today, Jonathan?
[00:01:37] Speaker B: Well, today Chris, we're going to be speaking to Martin Port. Martin's one of the better known entrepreneurs from the north of England. I think he's probably best known for being the founder of Leeds based Big Change, which he he ultimately sold for over 300 million.
But he's also interestingly got a range of other investments that he's made.
I think one of the ones we'll talk about is his latest startup build concierge, but quite a lot of other investments as well. So Martin's in Israel at the moment while we're speaking to him. So yes we have got an international feel to the business but welcome Martin. It's great to have you to speak to.
[00:02:23] Speaker C: Great to see you again Jonathan and Chris and obviously have a lot of conversations with many people and I'm really Looking forward to this conversation because it really, you know, it's at the heart of a lot of the time what we do, deal making. And it's great to share my past experiences with you.
[00:02:45] Speaker A: Martin, I'm going to kick off. Yes. You've got the longest LinkedIn profile in the world. You've literally, it stretches to about six or seven pages. You've been involved in so much stuff. I'm going to go straight to 2002 when you founded a telematic business called Masternaut. Can you just tell us what problem you were trying to fix then with masternaut?
[00:03:03] Speaker C: So masternaut started out as a pure play vehicle tracking business. I mean we started a very good time, good timing because it was at the time when the Internet was really coming into its own in early 2000.
And we basically provided tracking for businesses that had transport businesses or service type maintenance type businesses. And we installed the tracking in vehicles.
We were obviously helping the companies improve their efficiencies, their CO2 help improve their customer service. And occasionally firms will also use it as what you call a spy in the cab in those days where they would actually have a tracking, tracking the vehicle. They'd be able to see when the vehicle was parked up in a lay by or where the engineer or driver was having a doze or he may have been selling a fridge to a third party with the company not knowing. So there's all sorts of stories I can tell you about tracking, but primarily it was all about efficiency, customer service and helping people become greener.
[00:04:19] Speaker A: When you started that business, you'd already had quite a successful career beforehand, but you're about 38, 39 I'd imagine. Masternaut won countless awards.
I think you acquired three and a half thousand customers. You identified the importance of software very early on. It sounds obvious now, but back then it wasn't. And you bought an app business because you could see everything was going towards, you know, apps. Am I right in thinking that you prayed you paid the princely sum of one pound to buy an app company?
[00:04:45] Speaker C: Yeah, it was a story behind it.
Probably Jonathan's seen a few of these in his time, but it was a small business that was part of a massive business. It was a company called GE Mobile Solutions.
GE stands for General Electric.
And actually, in fact, I think Jonathan's former colleagues actually did the audit for ge, probably internationally. And GE had this business, it was sitting within a business called Swiss. It was, sorry, GE Insurance. Insurance and GE Insurance was sold to Swiss Re and this small business was left within the G Multi billion pound portfolio of businesses and they needed to sell it anyway. They approached me when the business was doing quite well and I felt that the asking price was too high. Anyway, during that period they went with another offer. Unfortunately that, unfortunately for me, the offer didn't complete because the other company pulled out. And during that period of time, Jonathan probably seen this a few times, the business people took their eye off the ball while they're selling the business and the sales started to drop.
So ultimately GE being a very people focused business, they wanted to put the business in a safe, into a safe pair of hands because they were caring about their employees. With the business, you know, plateaued or on the sales were on the decrease.
They came back to me and said, would you be interested in taking the business on, tuping all the employees? The business was based in Schipton, not far from Leeds. And I said luckily, actually before I went back to them, I had a former GE business development person working with me as a consultant.
He explained that ge if he said to ge, I'll buy the business and I'll give you, I'll take no warranties. So you know, maybe just for tax, but everything else, no warranties and you'll take on the people. You probably get it for a pound and also maybe get. And I got with this business £400,000 in cash. So actually I paid a pound but I actually really got £400,000 and a business for free pretty much. In fact, the pound was handed to me by a friend who was actually working at Slaughter and May's office in London who came down to see me when we were completing the deal. And I said to him, you got a pound? I've got to pay a pound for this business. He lent me a pound.
[00:07:36] Speaker B: So Martin, you set up Master Noor when you were 40, so you'd already had some coffee career, you know, some careers or a good career before then. So. And then you subsequently sold that business not, not, not too long after and created quite a bit of wealth from that. I'm interested in what was driving you to set up that business at that sort of age. And, and then I'd be interested in just hearing the story of that value creation up to the, the ultimate exit as well.
[00:08:06] Speaker C: So I was working for another company before Mastenau and it was a trendsetter in vehicle tracking.
Ironically, again, it was partly owned by ge. It was a leads based tracking business. I was the marketing director and like many entrepreneurs, they see an opportunity and feel like the business that they're in maybe wasn't going in the direction that they would like. And. And they thought, oh, I can do it better.
And that's exactly what I did and set up in 2002.
I also felt that tracking, being a hardware based technology was going to become heavily. It's a heavily commoditized.
So I wanted to get more into software.
So the idea of starting Master Nor as a pure play vehicle tracking business and then developing it into more of a software business by bang, which will probably come on to various businesses, software businesses, you know, that was really how I got into it and how I developed it. And then obviously then let's say culminating into a sale, a partial sale in 2009 and a final sale in 2011.
[00:09:30] Speaker B: And so when you set the business up, was the driver to create something or was it about making about creating wealth and value? I'm just interested in the drivers behind.
[00:09:44] Speaker C: The driver was to always for me to create a solution that my customers will absolutely love and smother them with a great product and great customer service. But ultimately I took shareholders in the business. So I owned on day one 40%.
My shareholders owned 60%.
And the ultimate aim was to obviously give them a return.
It was a bit of a.
We've got. And then we'll come on to it during the session today. But I've. There's quite a lot of competition in my family.
My sister and my wife's sister and brother in law, you know, my wife's siblings, they're very competitive and each of them have built and sold three, three or four businesses each.
So it was for me, I didn't want to be the poor relation or we didn't want to be the poor relation. So we wanted to make some success. And I think having outside shareholders, shareholders, passive shareholders that pull money in on day one and wants to return maybe in year five, seven, nine, that also gives you an eye on the prize.
[00:11:10] Speaker B: And so that then gave you the platform to move on to the next company.
[00:11:17] Speaker A: Yeah, I mean I just want to come in with a question here, Martin, and also ask Jonathan as well. I think the way you set that business up is quite interesting. But you went in on day one with only 40% equity. I speak to a lot of business owners who want to retain 100% equity from day one. And I mean, I don't know Jonathan, in terms of what is the perfect choice.
[00:11:35] Speaker B: And it varies. So I've got lots of clients who founded businesses and then they bootstrap them and they'll do everything to retain as much if not all the equity as they can.
And I suppose often that is the right strategy. I think you should value the equity really carefully. But then equally, if you need, it's often easier to build businesses as part of a team and people need to be motivated.
Sometimes getting the shareholders alongside you who are running the business, who are motivated, is the right way to get the team aligned. Sometimes you just need funding and you'll have to give equity to get the funding. And in those circumstances, it's all around making sure you know who's in control.
[00:12:23] Speaker C: Actually, this is the way it works. Typically what I found, and maybe Jonathan resonates with Johnson, that the first business you, you've got no previous success, so you have to, you know, you sell more equity because you need to raise a certain amount of money and you've got certain valuation you can achieve. So the first business was a million pounds valuation and I sold, you know, 60%.
The second business, after the first success of Masternau, Big Change, I raised one point, just over a million pounds, a three million valuation and obviously that was a big success. And now the third business I've raised, probably from outside shareholders, over 2 million at a 35 billion valuation.
So as you build a track record, a background in success, more and more people, they're not looking really at the valuation, they're looking at will you be a successor? You were becoming a favorite rather than a long shot and I think that's the case. And the valuation is really worked out. You work it back from maybe where we're going to be in 5, 7 years and say, well, if we can give a 10 times return potentially in 5, 7 years, fantastic. Whereas big change at 3 million valuation, my investors got a 17, 9 times return.
So that's personally how I feel it works.
[00:14:11] Speaker A: Martin, I'm going to go straight to big change now. So you founded the business in 2013 to revolutionize mobile workforce management.
I know this is the Dealmaker Uncut podcast, but when you started that business in 2013, were you thinking about a scale and an exit five, 10, 15 years down the line?
[00:14:31] Speaker C: Yeah, I was 100 million on day one. That was my enterprise value that I was trying to achieve.
So when I remember when, we'll come on to it a bit later. But when the. When Great Hill first made contact three years before, we.
[00:14:51] Speaker A: They're a US based private equity company, aren't they? We'll talk about them in a minute.
[00:14:55] Speaker C: Yeah. So we actually sat down for lunch and with Drew, who's one of the main partners and actually he said to me, I said to him, he said to me, are you interested in selling a share of the business? I said we're too, too early. You know, we, we need to really grow and increase the ARR. The annual recurring revenue because I've got a figure in mind of 100 million and, and that's it. And he got back in his big black Mercedes car from, in Leeds and he, he drove back to London to get a plane back to America.
But that was that, you know, that I had that vision in my mind all the time. And I think it was also going back to this, my wife's brother and sister that they'd started selling businesses at 100 million. And I thought, you know, we can't buy.
[00:15:55] Speaker B: It's a good habit. It's a good habit.
Can we just talk about Great Hill?
Great Hill are a US private equity investor. I'm interested in the, the choice of investor and what drove you to choose them? Did they come to you? Did you go to them? Just a lot of people when they're choosing that, you know they've got a business and they're going to bring an investor on board. That is a massive decision for people.
Some people are really worried about knowing the, you know, getting references or knowing the people they're working with. But just could you talk about how you got to that decision?
[00:16:32] Speaker C: So, so obviously over three. I met Greg three years before doing a deal. I met a lot of private equity, you know, people from inside partners in America, people from the uk. When you win awards, many awards, you're sitting, tend to sit on tables full of PE partners in PE firms.
So, but Great, Great, Great Hill had basically every time they looked at a mobile service management software business, you know, job management software business, they said, they called us up and said, would you like to sit on the call looking at this business? We'd like to know what you think of it.
I mean it was very like sometimes quite, was quite interesting how they operate in a very open way, but they just really connected with us and you know, Drew Lokes and Greg Schuh and the team there, they're really engaged and I think that they, they built that kind of friendship relationship.
You know, we always knew the figure we wanted.
The kind of companies that they had and have invested in were like incredible businesses like Zoom Info, Wayfair, Reward Gateway in the uk, really strong businesses.
So we felt very, very confident. But at the end of the day it was a mixture of people and price.
[00:18:15] Speaker B: Sounds like you built a good partnership with those investors.
[00:18:19] Speaker C: That's right, yeah. Very good.
[00:18:21] Speaker A: I mean, they'd been tracking you for three years, but I also think you had interest from 100 private equity investors as well, you know, so you were clearly a man and a business in demand as well. I know Great Hill Partners, they offered you the most money. I think they invested 75 million in 2021, which valued the firm at 100 million, which was the figure that you had in your mind from day one as well. Now, clearly you chose them and the money was a big factor, but was that the only reason you went with them?
[00:18:50] Speaker C: I think in the back of my mind, I always wanted to go with them, but, you know, because I. I felt like the chemistry was good. They're very, very focused. They were very. The very entrepreneurial.
They're kind of the very. They're operational, but not like over completely in your face and all the time. And they kind of, you know, were. Wanted to let us get on and run the business. But I think that, you know, ultimately we had over 100 offers for the business.
Not an offer, sorry, over 100 private equities interested in the business. We had a number of offers. And. And even at the point when we went exclusive with Great Hill, another big American PE that had a strong London office made an offer for us, which obviously we made Great Hill aware that this other company was interested, that made us an offer. But obviously we carried on with the Great Hill deal.
But I think.
I think we, you know, in hindsight, with. Hindsight's a great thing, but we made an incredible choice. And I hope, please God, when building Bill Concierge, which we'll come to.
Bill Concierge, will hopefully end up in Great Hill's hands again, but only in a competitive situation.
[00:20:27] Speaker B: So you use the competitive tension of a strong alternative bid to make sure you got the deal that you wanted with the partner that you want. Wanted.
[00:20:36] Speaker C: Exactly. Yeah, I think I would.
Absolutely.
Unless it's what you call a fantastic deal that just absolutely blows. Blows market values out of the park. I'd always take. Even then I would take a corporate finance specialist to help help you in the negotiation. And I mean, I didn't realize the amount of work that like people like yourself do, Jonathan. I mean, it just.
It's just incredible. I mean, the. There's so many different steps in the process and, you know, dealing, working with like, top.
Top partners, you know, top corporate finance people, you know, they. They really get the. Earn their value and what they.
What they charge.
[00:21:26] Speaker B: Yeah, good value for money.
[00:21:27] Speaker C: That's what I always say create value for money.
[00:21:29] Speaker B: Can we talk about the sale of Great Hill to simpro?
You built that business with Great Hill and then you ultimately sold it to SimPro for over 300 million. I understand.
The question that I'm interested in is how you were feeling when you were approaching that sale. Obviously, once you took Great Hill on board, the business was always going to be sold and you could probably foresee the timeframe. But I'm interested in how you felt in the run up to the sale and what was going through your mind by then. You must have been in your.
What age would you be just trying to get a feel. Cause you've then gone on from that sale into a career that is broader, but you've still been very active. And so I'm just curious in understanding what was going through your mind.
[00:22:24] Speaker C: Yeah, I was 62 years old and it was October, the completed October last year before they change in cgt.
But I have to say I had an amazing. I was chairman at the time of the sale, and I had an amazing CEO, Richard Worley, an amazing team.
And I was in a very, very good position because I had Great Hill leading on the deal with the support of Richard and the team.
And I was very much.
I think this is a big. I would say this to anybody going into a deal partnering PE is. I'd make sure you're joined at the hip, because when you're joined at the hip, you're absolutely aligned on everything.
And you know, what they do is what you do.
And I think that's where I think the partnership really works. So I just left Great Hill to do what they're very good at.
Obviously, we were a prize.
You know, we were unique in the market. We're the market leader.
And Simpro, which is a great company, obviously they're owned by K1, which is from Los Angeles, another great private equity.
You know, they.
They were obviously very keen on acquiring us. They'd done a lot of research. They knew. They knew about the business. But ultimately having Great Hill take the lead was massive. And they did. They ran the. Pretty much run the process themselves.
[00:24:09] Speaker B: But what essentially happened was that.
[00:24:13] Speaker C: Your.
[00:24:14] Speaker B: Business that you had been the pivotal, the driving force behind growing, was then sold for quite a very significant amount of money.
But then the business had been sold. And I wonder whether you felt any remorse about the change of circumstances or whether you just enjoyed it.
[00:24:35] Speaker C: No, I knew what they wanted to do, what their strategy was for the business. I knew that they would really sweat the asset and get the Most out of the business. I knew that they would work on growth.
I mean, they're at something like the rule of 58 at the moment. Jonathan, I don't know whether you can explain to the audience how the rule of 58 is against the rule of 40, but it's 50% more. I mean, it's incredible, you know, like 200 million AR. 200 million ARR, 60 million EBITDA.
And they're just growing at such a fast pace and they're just so happy with the acquisition. And now I'm part of Topco, so I'm going to see the benefits of all that when there's another sale in the near future.
[00:25:30] Speaker B: And do you still spend time on the business?
Are you still involved?
[00:25:34] Speaker C: I'm completely passive with big Change.
I mean, I changed now interacting with some of it.
Some of the customers, you know, if they need to reach out to me and ask me to, you know, introduce them to so and so in the business or, you know, I'm commenting on LinkedIn and, you know, you know, congratulating team members on success or customers on success using big Change.
But other than that, you know, just leave them to get on with it. They know what they're doing and they're doing a great job.
[00:26:07] Speaker A: I'm going to take you, take you back. And you mentioned there, I think you still own 2%. So when there's that exit done, that sale, you'll benefit from that. I'm going to take you back to 2023 as one of the. We've known each other for a number of years, but I remember we went to the Northern Tech Awards at the Royal Armories in Leeds and I messaged you and you said, hey, let's have a meeting before. And I think we met at Pizza Express.
And actually that would have been some time before then because Fast forward to December 4, 2023. You're not a tall man, you're 5 foot 7, but you were a big man, you know. And he subsequently told me, you tip the scales at 20 stone, which I couldn't believe, to be honest with you, but big personality. And then at the. And then 2023, boom, you get hit by a heart attack, okay? And it changes your life. Very nearly ended your life. And I think a lot of entrepreneurs, they think of themselves as bulletproof. And then something pulls a rug from under the carpets and it changed everything. Just tell us what happened to you because your wife, really, it was her, only her quick reactions that saved your life, really, wasn't it?
[00:27:07] Speaker C: Just before I do. I'll just tell you it wasn't Peter that was my favorite indulgence. It was.
It was not. It was a steak that was Normally sold as 300 gram steak entre cot, but I used to order a 600 gram steak and I used to order it with a fried egg on top. And I've seen a few pictures on the LinkedIn or Facebook of me eating this steak and that was typical of me having two meals instead of one. But anyway, I was involved with a bakery and I think I used to eat all the goods as well and I managed to get to 20 stone. And this bakery used to make beautiful cream cheese and smoked salmon sandwich, you know, bagels, cream cheese and smoked salad.
Anyway, in December 2023, 5:31 morning, I woke up with a hot sweat and felt really unwell.
It took an hour and a half for the ambulance to arrive.
And I remember when he did arrive, the paramedics were amazing.
But I remember my wife saying to the paramedics, has he had a heart attack?
And they said he's actually having a heart attack while we're speaking. Anyway, they rushed me down to the Leeds Hospital LGI and within half an hour I had a stent, one stent. They found a lot of cream cheese and smoked salmon in the stand in the, in the artery.
But anyway, I got the sense in within an hour I think I was on LinkedIn with a picture of me and the two paramedics that saved me and that completely changed my whole outlook on pretty much everything, you know, completely started to focus on me, focused on exercise, you know, I managed to get myself a cardiology. Cardio. Cardiology Cardio fitness trainer, which was. He was amazing.
[00:29:11] Speaker A: Easy to say that, cardiology trainer. So you got the cardiology trainer, you lost six stone in weight.
I mean you're about 14 stone now, aren't you?
[00:29:19] Speaker C: 14 stone. And I've still got at least another stone. Stone and a half to lose.
So I was in the gym this morning, I was on the running walking machine.
I'm walking now, two hours, two hours a night as well.
So yeah, I'm living the dream.
[00:29:38] Speaker B: So the. I mean that sounds like a terrifying story.
Your heart attack happened before you, so before the sale of a big change. Is that, that's right, isn't it? So I suppose that might have made the sale a bit more.
A bit more welcome, if you like.
[00:29:59] Speaker C: I had already had a very big result the first time around with big change. When we did the first deal with Great Hill, the business was going Incredibly well again hitting and surpassing all the targets. So that wasn't, I think my biggest, biggest bit wasn't on my mind at all. I think it was just a question of really.
I think I was involved in some communal matters that probably because I do quite a lot of. I'm involved in, you know, some philanthropy and community work and I think that probably was more stressful than anything.
So along with eating too many bagels and 600 gram steak.
So anyway, listen, you know, some people say, you know, you know, having a heart attack must have been terrible. And I say it was the best thing that ever happened to me because it probably given me another 20, 30 years.
[00:31:01] Speaker B: Should we move on to what you've done since then? Because you, you, you've actually been really active.
We could talk about Build Concierge next. That's probably the latest exciting project. Although you have got quite a few other investments as well, haven't you?
[00:31:17] Speaker C: I have got other investments. I'm also mentoring my son Josh, who started a business called Handshake which is going to be an incredible solution for deal makers just like you. Jonathan helps organizations find, nurture and generate amazing leads, you know, to help their pipeline.
And then I'm also investing in a few businesses. Pan Intelligence, Electron Green Storyboard, Unrated People.
But back to Build Concierge has got an amazing team and I see myself really as more of a, kind of a coach to the leaders.
So you know, my, my, my legacy is to create great leaders. Now you know, I'm not into the micro detail. I'm interested into supporting them, coaching them, you know, sitting on the important meetings and really more into the design of the product and design of the business and designing where we're going rather than, you know, actually doing the day to day work.
[00:32:32] Speaker A: Martin, can I just take you back one step in terms of what I'm always fascinated, Jonathan's always fascinated in the deal and meeting people. I'm always fascinated in the idea behind the business. You were doing a renovation or you were getting a renovation done of your house. It was a bit of a disaster. And that's what spawned the idea for Bill Concierge. So what does Bill Concierge do based on your horrific experiences of your own renovation?
[00:32:55] Speaker C: Okay, well that was the original idea.
The original idea was to out of, you know, having bad experiences from tradespeople was to create a virtual trades company, the Uber, for service, maintenance and building for, for homeowners, consumers.
And we built all the software around this business and developed it and started to trade and after Two or three months.
There was so much friction between passing the jobs on to the subcontractors and trying to control diaries.
We realized this was a business that wasn't scalable.
So we, during that period we had some of these subcontractors come and visit us and they said to us, well you know that technology you've got that you've developed for your business, we'd love to implement it in our business.
And then we decided once we stopped the original idea to actually set ourselves up as a business to business software business, SaaS business.
And that's how the idea, the pivot, the new build concierge was born. And now we're providing software for trades companies.
I call it the cream on the cake of the big chain System or the SimPro system or other softwares. Our system helps companies fully automate their business and provide AI intelligence around it.
[00:34:28] Speaker B: So one thing I'd like to ask you Martin, is just when you've made a number of investments in different businesses, almost as an angel investor and I'm really curious what you think, what you look for when you're making an investment.
[00:34:44] Speaker C: So I think the first thing is the business and the business idea and also kind of where the business is in its trajectory. And typically businesses that I've got involved in have been businesses that have kind of plateaued and they need some more support. And typically I get involved as a, you know, I've a sit as a non exec director or an advisor board observer and then I look for so a great idea, great business underlying, you know, they've got a strong product, strong customer base, but they've just tend to plateau and then good, you know, back office management team, good management team and then, and that's typically what I look for.
So and typically the businesses that I've invested in, you know, they, that I can see where all the business benefits are to the consumer or commercial businesses.
[00:35:43] Speaker B: Okay, so you're now you're a pretty successful deal maker. You bought businesses and sold businesses.
I suppose I'm curious what advice you might have for people who are in that looking at doing deals as a principal.
Talk about how do you buy right and get your timing right to sell right. Any advice?
[00:36:10] Speaker C: I think first of all I would say I'm best when I'm operating my own business.
So I'm building my own business because I'm in control.
I think when you invest in other businesses, obviously other people are in control. And so I think what I would say is when you are investing in other Businesses, I would suggest and recommend they come and see people like you and get your advice on what you think of the opportunity. Because the thing is, you're a professional deal maker and I'm not a professional investor or deal maker in that sense. So I'm a good operator.
And I would really, really tell people, if you're sitting on a pile of cash, don't just go out there and spend it with no advice.
Talk to Jonathan and get some advice. And on the other side, building businesses and knowing when to sell them, you typically know when to sell because typically it's a bit like you're the honey pot and the bees are around you and they're all, you know, offering you high end multiples.
[00:37:30] Speaker A: Just finally, for me, before we wrap up, the importance of patience in deal making.
You're a patient man, aren't you?
[00:37:37] Speaker C: Yeah, I'm. No, I'm an impatient man. But I know the, you have to be patient in terms, you have to know that a deal could take five, I would say seven to nine years it takes to build a great business from scratch.
If you build it in five years, if you sell it in five years, it's because somebody's giving you an absolutely ridiculous offer.
But I would say seven probably is the magic. Seven is the magic number. And the reason why I didn't sell at 7, I sold at 8, was because Covid came with big change. And actually Covid, although it was the most horrific time for technology businesses, software businesses, you know, on off premise software businesses, it was probably one of the best times 2021, Jonathan will probably tell you it was a great, great deal making year.
[00:38:41] Speaker A: Martin, thanks very much. We're now going to go for a quick break. When we come back, we're going to reflect on the interview and we're going to answer some listener questions.
Welcome back to the second half of the Dealmaker Uncut podcast. We've just interviewed Martin Port. I think he interviewed us more than we interviewed him. But he's the founder of Big Change and his new startup is called Build Concierge.
A real character. What do you think of him?
[00:39:16] Speaker B: Yeah, just one of life's entrepreneurs.
One thing that I found fascinating was that the driver that he described for doing the, you know, for setting his first business up and the whole growth was that he got people in the family and his wife's family who'd also set up businesses and sold them. And so, you know, that bitter, sort of competitive, the element towards that was interesting. But he's just one of life's entrepreneurs and he's doing it instinctively and I just thought. I thought he'd got a great story, I thought he was great. And imagine being a young entrepreneur now and getting him on your board or on board as an investor. So I think he's doing some great stuff.
[00:40:03] Speaker A: He's 62 and he's going to be 63, but he's just got this infectious enthusiasm and I think that brushed with death with his heart attack really galvanized him and he's so much more dynamic now than he was before, which is saying something.
I think one of the things that struck me about Martin is from the day one he was thinking about an exit. So he's thinking about going to a certain number, in this case 100 million. And then like they had 100 interested PE houses were interested in a big change before he went with the one that he did.
And the other thing he did, he didn't sell everything too early. So he's managed to create value by. When he sells his 2%, that'll be the third chunk, if you like, of his exit from big change. So, no, he's a real character. I like Martin a lot. He also won one of Business Cloud's Northern Leaders awards.
So this is a section we call Ask Jonathan. It's when listeners can ask questions of Jonathan. The first question actually comes from our listener called Chris McGuire. You might know him, but no, on a serious note, I went to the annual conference with the family brewer J.W. leeds last week. They're estimated to do turnover. I think their turnover is 99 million quid. But they reckon that the increase in the employees, national insurance contributions and the impact of the national living wage is going to increase their cost base by 2 million quid. It's going to come straight off their profits. Now, are you seeing more companies looking to sell because of the increased costs that have been posed on them by the changes by the Labour government?
[00:41:35] Speaker B: So those changes have had an impact on the deals market.
I think there will inevitably be some businesses that will end up being sold because of the additional costs, but they're probably going to be in a more distressed type situation.
What we have seen for high quality businesses that have been in processes when this change has happened, obviously buyers have been concerned about the impact going forward.
A lot of people have run an argument that would say that they're going to pass on the increases to either employees or to suppliers and customers and successfully managed to argue that in lots of cases. But it's inevitably had an impact. There was some price chips on the back of that. And some businesses might be sold later because they might not be as profitable and they might need to wait. But it has had an impact on the market, but not a dramatic one.
[00:42:37] Speaker A: Okay, next question is from a founder and he asks Jonathan, I'm in the process of selling my business. How often should I expect to hear from my advisor during the process? I thought it was a great question.
[00:42:48] Speaker B: Yeah, so obviously I think that a lot of people are selling the business. It's one of the most important events that will happen in their lives. Not just in their business careers, but actually in their lives if they're selling the business that they founded and, and built up. And so I would have thought that for the period of preparing for the sale and actually running the transaction, the corporate finance advisors should become, he should probably speak to their advisors more often than their wives or husbands. And so I think they should be speaking all the time. I mean the job of a corporate finance advisor is obviously to design processes to be run very, so that businesses are really well prepared for processes and to identify the right buyers and to conduct the negotiations and the process.
But it's also to talk to the clients about what is happening, make sure that they feel in control of the process.
And often there's an element of being a social worker in order to get a deal done.
There's normally several points where the client will be having second thoughts because of the change in the circumstances or should they do it? Are they selling, getting the right price? And so I would say you should be speaking to your corporate finance advisor a lot. Most of the time, every day, for periods of the deal.
[00:44:22] Speaker A: Okay, final question. Alvarez and Marcel is a global business.
We've been asked a two part question. Is the M A market different depending on the part of the world that it's happening? And also how does you, how does the UK M&A market differ to the rest of the world?
[00:44:39] Speaker B: So the, the corporate finance market, when, when you come to sell a business, you should be thinking about who and you know everybody anywhere in the world who might want to buy your business.
The corporate finance market is a global market. And one of the important things is to look at who might want to buy the business. When it's strategic trade, buyers from overseas into the UK and investors.
One of the most prolific sources of buyers for businesses in the UK are US trade buyers and US private equity houses, particularly for, for technology businesses in the latter case.
So I think that there is one global corporate finance market. Now there are different features in different countries that relate to individual economies or the stage of the economic cycle that different business, different countries are in.
But essentially it's a global market. And one of the reasons we we wanted to be part of Alvarez and Marsal was the access that A and M has to US Trade buyers and US Private equity investors as a US Based business. So my view is it's just a global market.
[00:46:04] Speaker A: Okay, fantastic. So thanks very much for your questions. If you want to send a question to Jonathan, you can do it by the show Notes. That's all for this episode of the Dealmaker Uncut podcast, powered by Alvarez and Marcel. Massive thank you to Martin Paul and a final shout out to WAT Media and the star of the show as always, Jonathan Boyers.
[00:46:23] Speaker B: Thanks, Chris.
[00:46:25] Speaker A: Don't forget to subscribe to the podcast. Tell your friends and family. Follow us on social media as well. And that's all from me. And that's all from Jonathan. Thank you for tuning in to the Dealmaker Uncut podcast. We hope you enjoyed today's conversation and found it insightful. If you like what you heard, be sure to subscribe and tell your friends. We'll catch you in the next episode of the Dealmaker Uncut Podcast.
