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 Alvarez and Marcel. My name as always is Chris McGuire and I'm the Executive editor of Business Cloud. And I'm joined by the multiple award winning deal maker himself, Jonathan Boyers. Jonathan's been involved in deals totaling 5 billion pounds during his long and illustrious career and he's a Managing director and head of Alvarez and Marcel's corporate finance practice in the uk. Welcome, Jonathan.
[00:00:47] Speaker B: Thanks, Chris. Glad to be here.
[00:00:48] Speaker A: Well, it's great to have you. It's great to have you. And before we introduce our guest, as always, we need to thank what media who produce the Dealmaker Uncut podcast. They're the kings of video creation and we couldn't do it without them. And now this is the podcast that gets inside the deal. In the first part of today's show, we're going to be interviewing our special guest after then we'll have a little break. And in part two, Jonathan will be leaning on his 35 years plus of experience of working in corporate finance to answer listener questions. So without any further ado, Jonathan, who are we talking to today?
[00:01:19] Speaker B: Thanks, Chris. Yeah, I'm delighted that today we're speaking to Steve Oliver. Steve is best known as the co founder of Music Magpie.
He floated the business in 2021 and then has since sold it the back end of 2024 to AO. So there's plenty of stuff to talk about with Steve.
[00:01:38] Speaker C: Welcome, Steve, welcome. Thank you for having me on.
[00:01:41] Speaker A: Steve. I'll kick off if I may, because Music Magpie wasn't your first rodeo as well. I want to take you back a long way to your. You had a business called Music Zone for the younger members of the audience. You co founded the business in 2000, grew it to nearly a thousand staff, nearly, I think 100 million turnover. It was absolutely flying. I think at one stage the business was worth about 40 million quid and you own 30% of it. Then, Christmas 2006, the bank of Ireland effectively pulled the plug on Music Zone. Cut your legs off really, by calling your debts in without any notice at all. And you lost a lot.
So let's talk about dark days in your life. But what learnings did you take from that, Steve?
[00:02:20] Speaker C: I think it is an important context for what followed in terms of the first experience into corporate finance world. But I mean, first and foremost, I guess, you know, yes, it did end badly from a position of, you know, having done the management buyout from the founder there, Russ Granger, brilliant trader guy who sold records on long site market and was a sole DJ at the Hacienda. But he needed me to come in and do the boring bits.
And ultimately as the business grew, yeah, we agreed to do a management buyout. It was going great, we were expanding very quickly, but it did go wrong. And as you've just covered, it was the Christmas of 06. We were millions of pounds in the bank actually at the point of the bank pulling the plug. We were profitable year to date, but they could see the shift in the industry. So I guess professional and personal heartbreak was very much the order of the day and it was very difficult. We were bought emergency fire sale by a division of HMB called fop, which I think is still around now.
So I guess, you know, teaches you, you know, well and truly resilience, you can react in one or two ways. It's fight or flight, isn't it, at that stage? So I did go home and sulk for a little bit. But out of those embers, Music Magpie was born. And I guess, you know, key professional corporate finance lesson was choose your partners carefully, especially your debt partner. You did name them just before, so I will bank of Ireland, they were a very inexperienced, I think it was their first deal at the time actually out of their new Manchester office. So yeah, it is part of life now and a real sliding doors moment in life.
[00:04:05] Speaker A: You founded Music Magpie in 2007, so you didn't wait long before you went again. Your co founder was Walt Gleeson and you founded it from a garage in Hazel Grove in Stockport.
For those people who don't know. What problem were you trying to fix back then?
[00:04:18] Speaker C: I guess, you know, if you think back to 07, there was a, you know, very significant recession, cost of living crisis.
There was the run on the banks coming 07, 08.
So a consumer offer that was basically offering cash for your old. And as the name suggests, we started with CDs, DVDs, games and books and Cash for Gold had just started appearing on High street and a little bit online.
But one thing we'd learned at the end of Music Zone was that the margin in new product was very tight, very small, especially in the world of VAT free websites, supermarkets. But for used product, there was definitely margin to be earned. There was people who were going digital, who were looking to raise cash and more than anything, probably to declutter. And subsequently that ended up to be the name of our US business that did the same thing and aggregated the product from a consumer and allowed them to trade it in one go.
So, yeah, that was a huge learning curve for us, but essentially, you know, that was the business model that was the consumer champion that allowed people to sell stuff for cash quickly and conveniently.
[00:05:36] Speaker B: And you took on a private equity investor with NVM in Music Magpie.
[00:05:42] Speaker C: Yeah.
[00:05:42] Speaker B: Was that early on in the.
[00:05:44] Speaker C: No, we'll go back before then. Actually, John, we took.
So having had the experience I did at Music Zone, it was a valuable lesson. Chris mentioned it earlier. We had a business valuation about a year after the MBO, where it was 40 million quid and I own nearly 30% of it. And, you know, things look pretty healthy at that stage, but it went wrong. And therefore, when we started scaling and building a business of value, which Magpie was. So having started in 07, in 2011, I did a cash out de risk deal basically with ldc.
So, you know, we knew ldc, they were actually our PE backers from the management buyout at Music Zone. So we had a very good relationship with them, did that deal, and in 2011 allowed us to pivot the business. We opened the US business, we started to trade tech for the first time in addition to physical media.
So, yeah, and, you know, I mean, obviously there's a long tail to be told with any private equity transaction, but MBM then came later in 2015.
[00:06:54] Speaker B: There's a vote of confidence both ways there with LDC and they back you the second time and you.
You took them on as a partner the second time. That's interesting.
[00:07:05] Speaker C: Yeah. But maybe best of the devil, you know, in both directions. Absolutely. But, yeah, I mean, they did come out of the, you know, the end of Music Zone clean in inverted commerce, as it were, but very much the relationship was intact and I think there was a great deal of trust in particular with, you know, the investment director who was involved at the time, and.
[00:07:26] Speaker B: But you. So you'd learned the lesson that you've not made the money until you've actually turned it into some cash.
[00:07:31] Speaker C: Absolutely.
[00:07:32] Speaker B: And did that. But then. So just tell the story about the MVM investment. Did MVM buy LDC out?
[00:07:38] Speaker C: Yeah, effectively, yeah. I mean, things had been a bit of a struggle. You know, I sometimes compare it to my beloved football team, City So, you know, and what happened with the Glazers at United, where when you're working with private equity, suddenly you have to service your loan notes and capital amortization being paid back.
In addition to trying to grow the business, we were trying to pivot it. I mentioned earlier we were launching in the U.S. we were also trying to launch branded fashion which we had to curtail and then tech as well. So we were trying to really grow the business ambitiously at the same time as servicing private equity. And ultimately that was difficult. It was, you know, things didn't go to plan.
NVM came into the business and yeah, we did a deal in 15 where they put money into the business. Cause an important change in the working capital cycle of the business was when we were buying tech off people. Suddenly the cash element was even more emotive. 50 quid for a box of old CDs and DVDs. They didn't really do it. Most people for the cash and they didn't mind waiting a week or two. But if you are selling a £400 phone, you weren't paying straight away. So MVM injected some working capital into the business and took over from ldc.
[00:08:57] Speaker B: Because it's interesting, the pivoted quite significantly away from the old product into the new product, didn't it? Was that about the same time that nbn?
[00:09:06] Speaker C: Yeah, it was pivoting around that time. In fact, I think it was around 1516 where suddenly it was 51% of the turnover was coming from consumer tech. So we were suddenly a tech business doing media rather than the other way around. I mean, sitting here today, 10 years later, media is still 25% of the business. It's an important part of the business.
But actually the future of the business was always going to be consumer tech.
[00:09:30] Speaker B: Interesting.
So you've next then looked at an ipo.
I'd have seen you as an entrepreneur in nature and you successfully managed to work with two PE houses.
Can you describe? And I think on the IPO, I think NVN made a 12 times money multiple. Is that right?
[00:09:51] Speaker C: Yeah.
[00:09:52] Speaker B: Could you just talk about the decision to go down the IPO route? And I'm really interested to hear about the change that you experience once under the scrutiny of the public markets compared to the private markets.
[00:10:07] Speaker C: Yeah, I mean obviously it was a very big decision. We did explore a number of options between public and private.
So yeah, fast forward into the pandemic. And like many online digital businesses, I hated the phrase at the time because winners and losers suggest that losers have done Something wrong and they hadn't. They were just in the wrong sector at the wrong time. We were the opposite of that. We were in a good place. And it felt like the world had gone digital and gone permanently into digital. So there was a raft of, you know, around that time Deliveroo went, there was a various other online techie businesses who looked to the public market and it was access to funds to further expand the business.
But I mean, let's not pretend that the valuation that we could achieve publicly on the public market wasn't a significant factor in there. It was. I think we could have got close to it with another private equity transaction. On a very small personal level, I was fascinated and interested. I'd done private equity for 10, 15 years by that stage. And I was really interested in the public market as a concept and learning a new world.
But also it did allow not just me as a shareholder, but it was a significant liquidity event for. You mentioned nvm. It was a great return for them, which I was delighted about. They've been brilliant to work with.
Andy Leach is a personal friend now, as you know John, and he's one of the best around. And, you know, it was a great result for them for colleagues who were part of, you know, EBTs and there was a number of colleagues that were able to take funds home and, you know, it felt the right move at the right time. You know, I went and took advice. Obviously I'm very close with John Roberts now at ao and I know he did the same when they were considering public will go and talk to lots of people.
Interestingly, most of them said, do not do it, Steve.
It's tough, it's hard. It's, you know, you're in the scrutiny, et cetera. And by gosh, yeah, it's very, very different. It's a completely different world. You go from, by definition of those two words, a private business that is conducted around your table with a small number of people with an investment director and chair that are very intellectually invested in your business to a world where you have public instit who are your shareholders and are backing you and you speak to every six months for about 15 minutes on a video line and the first 30 seconds of that call is, hi, Steve, have you hit your numbers this quarter or this half? If the next word out of your mouth is no, you are dead to them, you're in trouble.
And unfortunately, because the world was a difficult place macroeconomically, we'd had Brexit, we'd had Covid, we Had Putin, we had Ukraine, cost of living crisis. There was lots of macroeconomic things that were going on at the time. Unfortunately we didn't hit our numbers and it was a very difficult time. It was a real lesson for us early on.
[00:13:16] Speaker B: I hear this. Some people go for an IPO because they like the public profile and they like to be in the limelight.
But I do hear this from a lot of people that you can be subject to the variations of things that are not really under your control. You know, a city lose on a Saturday, the share price might move a bit because of.
There's just a whole load of non related things.
[00:13:41] Speaker C: Yeah, absolutely. I think, you know, singularly there was a couple of things that, you know, my wife was mentioned on a public forum because, you know, she'd been a minor shareholder with how we'd structured it and you know, there was reference to Catherine that, you know, that gets very emotive and personal at that stage. It's like, you know, I'm a very private person. If you knew anything about Kathy, you know, really quite private, et cetera, wants to keep us out to herself. How dare you mention, you know, who was the Oscar instantly the other year where somebody jumps on stage and take my wife's name out your mouth. You know, I get it, it becomes emotive.
[00:14:20] Speaker A: You're not going to do Will Smith on us now.
[00:14:21] Speaker C: That was the chap.
[00:14:22] Speaker A: Thank you.
[00:14:23] Speaker C: I knew you'd get the cultural reference.
[00:14:25] Speaker A: Yeah.
[00:14:26] Speaker C: But yeah, it's, it's that word private and now public. And they are very short termist and they don't intellectually invest in your business at all. They're in it for the numbers.
[00:14:38] Speaker A: I was going to ask you a couple of questions. I've done a lot of stories about Matt Moulding at THG and I've never properly interviewed him, thankfully. Does these great posts on LinkedIn, which are great for me, and he's complained a lot about the markets, the way they're manipulated, the way the hedge funds.
[00:14:53] Speaker C: Yeah.
[00:14:54] Speaker A: You know, manipulate the price, etc. Etc. And I always think, and I looked at Music Magpie for quite a long time, is that you would produce a decent set of results. You're doing a lot of stuff around recycling and about being green, environmentally friendly, etc. Etc. But your share price would drop and you were literally like your football manager, people looking at your results and that's all they're judging you by.
[00:15:13] Speaker C: Yeah.
[00:15:13] Speaker A: And that must be really difficult, you know, so if you could do it all again and you could do An IPO all again. Would you.
[00:15:23] Speaker C: So a lot of people say that, you know, would you do an IPO again? And I always qualify and say if the question is, if you took me back five years and now then told me what's going to happen, would I do it again? I'd have to say yes. It was interesting. It did teach me a new world. We did have a huge liquidity event.
It didn't go well. In terms of share price, you are right. I mean, Matt's favorite phrase that I love and resonates very much with you. It's like having your homework every night. You cannot help yourself from looking at your share price and what people are saying about you on the forums, etc.
Would I ever do one again in the future? With any other business I was involved with, Very, very unlikely. I would never lead one. It was hard to be in that public scrutiny. So. Yeah, and John, you were right before. You know, things happen that just feel like they're totally out of your control and, you know, the share price, as we all know, the markets go down as well as up.
[00:16:19] Speaker A: One question I wanted just to get a little insight for the benefit of our viewers and our listeners, is that, you know, Northern, you know, music is very northern based. You are the epitome of a northern lad.
You're from the area.
Yeah, no, I'm an adopted northerner. You're fully. Oh, that's paid up. Member of the north as well, is that, you know, you've got values. You use a phrase, you know, it's nice to be important. It's more important to be nice, et cetera, et cetera. When you're dealing with the city and you're dealing with these institutional investors as well, who maybe don't share your values that A, can't be easy to listen to and B, not to say anything, what's that like speaking to people who really don't care as long as you hit the numbers?
[00:17:04] Speaker C: Yeah, difficult is the answer. I mean, you know, you're right. I think life is all about people. And me too. I did psychology at university many, many years ago because I enjoyed interaction, understanding, you know, comes and, you know, dealing with people. They, they. When I do stop what I'm doing, eventually I, I will miss people more than anything else. And none of us like disingenuous people. And, you know, you understand that their motivation, I get it because it's their job, it's how they're motivated financially and otherwise. But it is difficult when somebody appears, you're pouring your Heart out. It's your. It's my fourth baby, this business and you're talking emotively.
And I turned up once to a meeting with one of our third or fourth biggest shareholder who asked me how our passport machines in Waitrose were going.
And I sat there very rarely for my IMO stump for words, but my mouth moved and nothing came out. And actually what he meant was the kiosk that we've deployed in ASDA to buy mobile phones. But in his memory it was something to do with passport machines because he saw a photo of one that was next to a photo me machine in a supermarket. But that was his, you know, I'm not necessarily criticizing for that. He's got, you know, 15 minutes every six months to think about us.
[00:18:22] Speaker B: You'd hope you wouldn't get that from a private equity investor.
[00:18:25] Speaker C: That is it, John. They are invested in you.
[00:18:27] Speaker B: Can I ask, did you think about arranging to take the business private with private equity?
[00:18:34] Speaker C: Yeah. So again, you know, I mean having done the public transaction, obviously the market cap didn't, did drop very significantly. I mean, actually, just for my own sanity, I did a lead table of our peer group of the businesses that floated around that time and actually we were sort of, you know, the 12th or 13th the Man United position in the Premier League these days.
[00:18:56] Speaker A: See, I knew I was just waiting how long it would come and it's coming at 18 minutes.
[00:19:01] Speaker C: Who had that in the sweeps day?
So yeah, you know, we were the worst performing but no, things had gone badly. So yeah, we started thinking about what's next. You know, going and talking and having some social conversations with people and thinking about, yeah, very much taking. Because, you know, I didn't think I would say this necessarily, but I missed Private World and having people back around the table who understood the business and would invest in it in every way.
So yes, we did. We also looked at some trade options.
It did get leaked out publicly that BT had a little look at us. It was only a little look because it got leaked fairly early on in that process. But obviously we ended up doing the deal with ao.
[00:19:46] Speaker B: Yeah, Come on to that in two tips.
One of the things that I've seen with take private type deals involving private equity, very often a business looks undervalued and a deal is agreed with a PE housing outline premium of 30, 40% and it all looks right. And then lo and behold, a week or two before the deal happens, the share price moves and suddenly the deal doesn't look recommendable again. And price. Did you experience any of that or not really?
[00:20:17] Speaker C: No, John, it was fairly. Frankly it was very low. So it was flickering around in the single digits of pence.
Bear in mind, we'd float at a valuation of 208 million, nearly 2 pounds price and it was single digits of pence at this stage. Now this was a business that was still, as Chris said earlier. Thank you for saying it, Chris. We were still making north of 6 million quid EBITDA.
You know, we weren't financially distressed in any way.
But no, we, you know, we met with ao. It felt right from a very early stage, you know, the deal was all about finding a long term home for the business and the people in it.
[00:20:58] Speaker B: And how long were you, were you in that sort of mindset and conversation with them?
[00:21:05] Speaker C: In total, that public to private process took about nine months, something of that order, I think. The BT got leaked in the December 23rd and we ended up doing the 2.7 announcement for the AO deal the following September.
So, yeah, it was a long old time, but I'm used to doing deals by this stage. I've done a few and yeah, in a sense quite enjoyed that process of again going and talking to a few trade people, a few private equity people.
[00:21:39] Speaker A: There's a couple of questions I was going to ask and it's. I'm glad you mentioned that, about the fact that Music Magpie was a really solid business.
I've sort of personal bugbear. When people write really negative stories, the media about businesses and they like allude to the fact they're basket cases and actually say, well, have a look at the bottom line, have a look what their profit is because you're just basing it on the share price to go from this to this. And you know, there's. You talk about. What's the phrase you use about your colleague? Magpies.
Yeah, magpies. Yeah, you know, so you go into your office in Stockport and every member of your team is a member of your extended family. And that's how they look at it? No, that's how they look at it. So I always got frustrated when, and I get frustrated when people, journalists just write off companies when they shouldn't. So that's, that's the first thing in terms of. You're, you're a straight talking guy when you see that conversation you're having with bt, you know, you're having conversations with BT potentially about a potential takeover and then you open up the paper and then the Sky News or whoever's has leaked the story because somebody's leaked it. To them as well.
What was that like? Because, you know, someone's got an agenda and someone's leaked it for a reason. What's that like?
[00:22:49] Speaker C: Well, your first reaction is, yeah, something rhyming with clucking bell.
Who's done that? And why has that happened? And, you know, unto this day, I still don't know. Maybe it was one of the other parties that we're in discussion with. I just don't know. But actually, what was an extraordinary feeling is. And again, it was all part of, you know, public Rules and takeover panel that you suddenly have to lear at that point. You not only have to confirm or deny that interest, that you are in a conversation with somebody. You have to disclose every party that you're in conversation with, because you have to agree. A list of six parties that you're in conversation with. No more than that at any point in time, ironically enough, to avoid leaks. But if one of them comes out, you have to disclose all of them. So it feels like you're trying to play a game of poker and talk about your business and do a deal when everybody's seen your cards because they know exactly who you're talking to. So, you know, our advisors at the time when that was. It became obvious it was going to leak in the Sunday Telegraph, literally on the Saturday, had to phone every party we're in conversation with and say, this is about to come out in the press.
Do you want to be named? Or basically, you have to give them the opportunity to pull out if they don't want to be named. So we lost other potential conversations who didn't want to be named.
[00:24:05] Speaker A: One of the beauties of speaking to Jonathan is Jonathan's a really affable guy you've probably seen. And you say to Jonathan, say, jonathan, how's things going at the moment? You know, you're busy. Yeah, you're really busy. Loads of interest, et cetera, et cetera, et cetera. Never gives you a sniff of who.
[00:24:18] Speaker C: Of who.
[00:24:19] Speaker A: And that's because he is. He is, you know, a man of reputation and integrity as well. Not the same for everybody. I just want to ask one question before Jonathan comes back in as well. You're. You did the deal with AO for 10 million.
Your.
Your motivation was to look after your staff. That was the key. Okay, you're still the CEO of Music Magpie.
You're good mates with John Roberts. You mentioned him earlier, the founder of ao, who himself, like yourself, is a northern leader.
What's it like, though, going into work when it's not your business anymore, when fundamentally you're an entrepreneur.
[00:24:54] Speaker C: Yeah, I mean, it is very different. I've reflected on that, that this is the first time in 25 years that I've been going into work as the CEO but not owning any of the business. And it is different. You know, life is a roller coaster and certainly life as a business owner, as all of your listeners, I'm sure in that situation will know, is an absolute roller coaster. And I guess how I reflect on it is that perhaps it doesn't work over audio, but if you imagine the, you know, the trajectory of a roller coaster on the down bits, you have down days. So I have a sales report on my phone every day. I look at that at lunchtime and it tells me. It extrapolates roughly to what I'm going to do at the end of the day. So I know what kind of sales day we're having mentally. I will then extrapolate that day to the year and say, if we do that every day now, actually, on a scale of minus 100 to 100, if you're having a bad day sales, it's, oh, we're going to be in trouble, we're going to go, buster can't pay the wages. Luckily, I didn't have too many of those days. At the other end of the spectrum, it's like, oh, my gosh, we were having an amazing day. We're going to be worth 2 billion quid again. This is amazing.
So, you know, you lead that roller coaster life. I guess my main reflection now is, you know, part of a very successful, excellent, bigger group is my life is more of a, if not a mill pond. And I still very much care about the business and its performance because I've got professional pride apart from anything else. But you don't ride that roller coaster in the same way. It's because you know that you can just ride those waves out, bad and good.
And we are now part of a wider group strategy, which I'm very positive about and excited to be part of.
[00:26:39] Speaker B: So you've also invested in a mobile barbering service called Uppercut. Do you want to tell us a little bit about that?
[00:26:47] Speaker C: Yeah, I mean, I guess, like a lot of entrepreneurs, I see the life as an entrepreneur is all about finding solutions.
There's too many people in life who grumble about the world and I think entrepreneurs have to find the solutions that answer those grumbles before they happen. And I've always been frustrated that the only time I ever had in life to go and get my haircut was on a Saturday morning when guess what? Everybody else does. Chris, you need a haircut. Yeah, I do. I'll send one of our chats.
So, you know, it is busy. You have that moment of opening the door and it's, you know, there's six people in there reading the Daily Mail from three days ago and it's like. And then you don't get the guy you want.
[00:27:28] Speaker B: Terrible. If you don't. If you, if you need a haircut on, it's Saturday and you miss the Saturday and it's going to be another week.
[00:27:33] Speaker C: Yeah, you've got time to stop looking at me with it. Yeah.
So, yeah, so I thought, you know, there's a sol. There's a problem that the, the world has and then we actually hit the pandemic and obviously barbers, like everything else on High street shut and, you know, we're all getting our kids to do it and wives and they never let us do theirs, did they? I don't know quite how that works, but.
So I just thought, you know, there's, there's something that I think, you know, the world has gone mobile, you know, if you think about deliver, bringing, you know, bits of grocery around to your house. My office in Stockport sits above the Sainsbury's Express, where the till brings all day, every day for average order delivery, orders of six quid, where people are paying two pound fifty to have it delivered. So will somebody pay a little bit more to have a service at home where they want, when they want, by who they want? And they'll pay a little bit of a premium for that and yes, they will. So, yeah, met Michael, who runs the apricot business.
[00:28:27] Speaker A: Michael Law's, isn't it?
[00:28:28] Speaker C: Yeah.
Who's a fantastic entrepreneur of the future. I know you've known him a little bit, Chris.
He's full of energy. He's got a great old fashioned attitude of, you know, he works really hard, he believes passionately. He's got Jordan working alongside within the techie bit. They bootstrap that business and they, more than anything, they work really, really hard.
[00:28:49] Speaker A: So.
[00:28:49] Speaker C: And I think, you know, and actually the plans for that business are that the first application using the technology that the guys have built is mobile barbering for men. But actually it can do a whole range of in demand domestic services. So it could be cleaning, gardening, babysitting in the future, etc. So, you know, watch the space. But we'll be looking to rebrand that business in the near future.
[00:29:12] Speaker B: Yeah, like the sound of that. And you're Also passionate about a homelessness charity called egg, which stands for Engage, Grow, Go. And it's helped get, I think, at least 130 homeless people back into employment.
Do you want to tell us that that sounds interesting?
[00:29:31] Speaker C: Yeah, I guess a bit like how I just described with a business proposition. Sadly, we all see it's very high on Andy Burnham's list and he feels very emotive about it.
And I guess, and this is in absolute no way critical of Andy Burns Bed for the Night or somebody like the Wellspring in Stockport who do invaluable work.
Their models are generally more short term, where they're giving a blanket or a meal or a soup or whatever. It's about a handout. And actually, you know, with egg, as the name suggests, what we want to do is a homelessness model where we engage with the client, we work with them, with a volunteer mentor and a caseworker who can break that cycle and permanently intervene. So, yes, we have got 130 into work in just over two years. We've got over 220, I think it is now back into permanent housing. It's not always just the poor folk who are lying next to Stockport Station, et cetera. So obviously it is a very, very challenging lifestyle. A lot of them, this isn't my word, it's John who was running EGG for us.
They are chaotic, they have addiction issues, a number of them. It isn't for everybody, for that reason, our service, but if we can catch people, maybe towards the top of that vicious circle, we've helped people who were driving for Amazon but got sacked because they were caught sleeping in the van cause they couldn't afford the first month's rent. That feels like an easy one to break the chain of and help them with that first month so they, you know, they can get into employment and housing. So, yeah, it's very rewarding. You know, I am quite the socialist these days and very much believe in, you know, there isn't enough support and help for the least privileged people in our society and I think it's up to the rest of us decent folk to step up to the plate and help them.
[00:31:28] Speaker B: Sounds like a great cause.
[00:31:30] Speaker C: Yeah, it's growing, you know, nicely. We've got some National Lottery funding in there alongside a couple of high net worths, alongside myself and yeah, we've got four colleagues in Stockport and yeah, hopefully we can, you know, grow the reach of it across across Manchester to work alongside other homelessness charities.
[00:31:47] Speaker A: I'm going to end with this question if I May is that I'm very sure to start with this question as well. If I was painting a picture of Steve Oliver, I would say massive family man, marriage, his wife, cat, for many, many, many years. 30 as of last 30. Congratulations.
30, 33. Three daughters.
And the last year has been tough here because, you know, your beloved Man City have struggled, not won any trophies. In fact, you're picking up a cup, which is something Man City failed to do last year, you know, but that disappointment that has been in your life for a year has been offset by the fact that you've become a granddad.
And just the mere mention of your grandson's name and it just turns your day around as well.
[00:32:27] Speaker B: Yeah.
[00:32:28] Speaker A: And if so, you're at a stage in your life now where it's different to what it was 10 years ago. Financial reasons, for obvious reasons as well. And I think people look upon you. You wouldn't get the, you know, the lifetime achievement awards. You're not on that level yet. You know, you've still got many more years to go, I think. But when you're talking to young entrepreneurs like Michael Laws and you're talking to up and coming, dynamic, thrusting, you know, entrepreneurs as well, what would your advice be to them?
[00:32:54] Speaker C: I think always, if, you know, I'm giving one single piece, I mentioned it before and it's what I like about Michael and I've invested in other businesses where, you know, I've tried to actually also bias those investments towards female founded businesses. And now that's a separate conversation topic which I won't go down. But I think they get a really difficult deal in life.
[00:33:15] Speaker A: So 2% of VC funding goes to female founded businesses.
[00:33:17] Speaker C: Yeah, it's an outrage.
Absolutely. So, you know, try, try and you know, skew things positively in that direction. But just looking for people who've got the right attitude, who realize that, you know, it is hard, you have to do those hard yards, you know, people. I do a little bit of a presentation now. I did it from the Stockport Economic alliance we've got, which I chair and we have an ACORN alliance and I did a presentation on perseverance. It's an Alistair Campbell word actually, for perseverance and resilience.
And it's all about the perception of what people think. A business owner and entrepreneur, the life that they lead, the Leonardo DiCaprio, you know, with cash and, you know, sitting in a bar and raising champagne glasses versus the reality of there's a guy in a green T shirt, gif isn't there, who's having A panic attack into a bag and the Pablo Escobar stood in a field, just stood looking at nothing like you do.
It's the reality of being an entrepreneur and a business owner versus the perception. And you have to have that right attitude of I'm going to work at this. And you know, you mentioned football, so I will.
This is my 45th year of being a City season ticket holder. It's fair to say I did me hard yards with City. I've been through thin and thinner. And what I always say to Kath is like, city. I came good eventually. Just took me a while.
So, you know, it is the long game and you know, it might not work out first time. You know, we started this conversation by talking about a difficult start where ultimately it went wrong. But you have to learn the lessons and take that forward, work hard, treat people with respect and trust them. And I think that's one of the biggest lessons as well. Surround. I know it's a bit of a cliche. Surround yourself with the best talent and the best people who you enjoy going to work with every day. Because a lot of them, you know, a lot of my Magpie colleagues now are personal friends for that very reason. And I've been blessed with people. So surround yourself with great people because actually you'll spend more time with them than you will your wife or your husband or your partner. So, yeah, that, that is how I would decant it into one piece of advice.
[00:35:29] Speaker A: Steve, we're going to go for a quick break. When we come back, Jonathan and I will be discussing our interview. We can be completely honest as well, because you won't be in the room anymore and we'll be answering questions from the audience.
[00:35:42] Speaker C: Foreign.
[00:35:50] Speaker A: Welcome back to the second half of the Dealmaker Uncut podcast. We've just interviewed Steve Oliver, founder and CEO of Music Magpie. Jonathan, what do you think of Steve and how did the interview went?
[00:35:59] Speaker B: Well, I really enjoyed that interview. There's a few things strike me about Steve's story. He mentioned it himself, but resilience. So like many entrepreneurs, the first business didn't work out.
He moved on. And Music Magpie went really well. There's an interesting point we talked about when it pivoted. He's innovative. The business had backed a sector in DVDs, which obviously was becoming obsolete, and it pivoted into mobile phones and technology, which again, that entrepreneurial spirit that Steve, I know Steve's got running through him, they were able to pivot the business. And then the discussion about the IPO and the difference between public markets and being involved with a private equity backer.
I think that was really interesting and not the first time I've heard the sort of feedback that he talked about failing a loss like things were happening to the value of the business that weren't necessarily within his control.
So that was all really interesting. And then I suppose it's a nice ending that it's been acquired by a business run by somebody that he's familiar with.
So it's an interesting story. I sort of wonder whether we've probably not seen the end of Steve's career yet. So I'd like to see what happens next. But just a really interesting entrepreneurial story.
[00:37:31] Speaker A: He's still a very young man, of course. I think one of my favorite stories about Steve is I used to host a Christmas quiz for Ruth Shern and Steve would always turn up normally with a couple of ringers like Chris Barry as well, and they'd win it every year. And I've never seen a mild mannered guy take a quiz so seriously. He has got to win. What I found fascinating about the interview was the fact that we spoke about the IPO that he did and he got a lot of scrutiny and he didn't necessarily sit easily on his shoulders. Would he do it again? Probably, you know, because. Because there are good bits to it like the.
Like you mentioned. Yeah, the valuation. But also there's a level of scrutiny that for a private guy like Steve, he didn't necessarily like. But yeah, great guy, a great business person. So this next section is called Ask Jonathan's when we got some questions from listeners that they want answers to. So the first question is, Jonathan, can you explain what a cash out PE deal is and the pros and cons?
[00:38:30] Speaker B: Yeah, so what you're referring to there, cash out private equity deal. One of the options when an entrepreneur is thinking of selling his business, selling his or her business is a sale to a trade buyer which is often more of an outright sale or an alternative is often a deal with private equity. And when they're not quite ready to sell the business in outright, the there's one option where a private equity house will buy into the business.
The shareholders will take off, often up to about half the value of the business off the table.
And they'll often raise money to fund growth, maybe acquisitions or something like that. And they move on to a new phase of the life of the company with a private equity investor on board having effectively raised cash. Those entrepreneurs are often having de risk their personal situation. They're often More ambitious about what they can do with the business.
They can be a little bit bolder with the decision making, particularly if they've got a war chest to do something with.
And so those sorts of deals are really common these days. I suppose the cons, if you like, are that you are bringing on another investor into the business. If you're a private company, you will then have another shareholder to work with. They will often require certain controls over the business and, and a lot of entrepreneurs are not used to working with the sorts of controls that a private equity investor would need.
I think the answer to that is to make sure that enough cash has been taken off the table in order to make the deal worthwhile to do.
And just make sure that you choose carefully who your new business partner would be in the form of the new private equity house.
There's personal chemistry involved in that, there's the house style.
But you can, you know, if you've got a good advisor, you should be able to choose carefully and get the right investor on board.
[00:40:36] Speaker A: Second question. I know this personally in my role at Business Cloud. Are you seeing more AI in the deal making industry? I suppose that could be from a deal making perspective, you know, from your side, or it could be in terms of companies, potential buyers looking for AI in businesses.
[00:40:52] Speaker B: Yeah, I suppose. I mean, almost every business has technology involved in IT these days and so almost every business has got to think about how AI will change their business, business proposition and so on. You know, all over the place we're seeing AI is impacting business plans and the strategy to evolve businesses from a corporate finance point of view. Obviously we are also, our industry is also affected by AI. The areas that we are focusing on at A and M most is how we use AI to develop in document production. So we now have a tool that, that we can, you know, we produce information memoranda that can take four or five weeks to produce.
And we've looked at deals where we've reproduced an IM in the old way and then we now have a technology that we can produce it in half an hour using the input material, the same input material. So we expect that document production now will be speeded up very significantly by the use of AI Also, I mean our people are using a AI every, every day, almost every hour, I would say in terms of things like researching, researching buyers, looking at comparable transactions.
You know, I think it's already all over, all through our business and there's a few areas that we're specifically focusing on on how to use it, but AI has already changed our, our business.
[00:42:28] Speaker A: I, you know, with AI, it makes suggestions to you and it said Chris McGuire editor and it used a picture of Chris Maguire, the tattoos down both his arms to illustrate me as well. So that's where, you know, AI is, is good but obviously there's some fine tuning to go on. A last question and it said deal volume is down for the first half of 2025, but deal values are up. Is now a good time to sell my business? I mean, are you expecting to see a lot of deal activity between now and the end of the year?
[00:42:56] Speaker B: So there's loads of pitch activity happening either before the summer, over the summer and we're expecting to be invited to to a lot more pitches as soon as the, you know, as soon as September as well. So there are lots of sellers are thinking that next year is going to be a stronger year.
Another interest rate cut this week recently and I think that it's not been the strongest M and A market now for a couple, two or three years.
I think lots of people are expecting improvements. There's still uncertainty in the market and I don't think next year is going to be a flyaway year.
If you've got a good business, you'll still get a really well attended auction. There's really high quality, fast growing businesses still attract loads of people, loads of investors, loads of acquirers.
But you can still get deals away if you're careful and thoughtful about how you prepare a business and how you run the process.
Pretty confident next year will be an improvement movement.
[00:44:03] Speaker A: Well, that's, that's good to know. And that's all for this episode of the Dealmaker Uncut podcast. Powered by Alvarez and Marcel. Final shout out to what media and the star of the show to Jonathan Boyers.
[00:44:14] Speaker B: Thanks, Chris.
[00:44:15] Speaker A: I just waited till he had a drink of water before I, you know, said thank you to Jonathan Boyers. Don't forget to subscribe to the podcast. Tell your friends and family. Follow us on social media. Give us a rating as well because that really helps with the algorithms.
So that's all from me, Chris McGuire at the Dealmaker on camera 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.
