Episode Transcript
[00:00:02] 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 is Chris McGuire and and I'm the executive editor of Business Gout. I'd like to thank our growing number of listeners and viewers as the Dealmaker Uncut Podcast continues to make the podcast charts around the world. As always, I'm joined by the multiple award winning dealmaker himself, Jonathan Boyers. Jonathan has been involved in deals totaling 5 billion pounds during his long and illustrious career and he's the Managing director and head of Alvarez and Marcel's corporate finance practice in the uk. Welcome, Jonathan.
[00:00:56] Speaker B: Thanks, Chris. Looking forward to this discussion.
[00:00:59] Speaker A: Okay, now this is the podcast that gets you inside the deal. In the first part of today's show, we're going to be interviewing our very special guest who's traveled up from down south. After that we're going to have a little break and when we come back, Jonathan will be leaning on his 35 years of experience in the world of corporate finance to answer some listener questions. So Jonathan, let's put the listeners and viewers out of their misery. Who are we speaking to today?
[00:01:21] Speaker B: Thanks, Chris. Well, a lot of our guests have been either entrepreneurs or CEOs of businesses. Today we're going into the investor community.
So today we're going to be speaking to Paul Gedman.
Paul was a senior executive at the Hut Group. Excuse me.
And he was there helping grow their beauty division from 20 million turnover to 600 million turnover before he then co founded eComplete in 2020, which is offering an alternative to the private equity community for investment.
The their first investment or high profile investment was 50 million into the beautytech group, which basically is one of the key products in the Beautytech Group is the currentbody, which is a really high profile product which we'll talk about.
BeautyTech Group was IPO'd at a valuation of 300 million and so a great success story. And there's other investments in that group, so lots to talk about. Welcome Paul.
[00:02:26] Speaker C: Thank you very much for having me, gents.
[00:02:27] Speaker A: Paul, I'm going to kick off if I may, but we mentioned before that you're at THG before you set up ecomplete when you were at thg you headed up the Beauty division. I think you oversaw 10 acquisitions, didn't you?
[00:02:39] Speaker C: Yeah, that's right. So lucky enough to get that CEO role in Beauty started with a 20 million acquisition. I was actually there for nine and a half years, seven and a half as the CEO of Beauty. And yeah, when I left it was 600 million revenue. That was 10 acquisitions. A lot of organic growth, lots of great people and yeah, like good timing. Everything's always timing. I think we really benefited from the shift offline to online and price arbitrage globally.
So yeah, good dynamics that allowed us to deliver that success.
[00:03:13] Speaker A: Yeah, and actually we've got a lot of THG listeners as well actually. Then in 2020 you joined forces with another THG colleague, former CEO of My Protein, Andy Duckworth, voted Mr. Burnley in 1987 to launch Manster based Ecomplete to provide an alternative to private equity.
In your own words, Paul, what problem were you sort of trying to fix?
[00:03:35] Speaker C: Yeah, so me and Andy were, we were always going to do something together. We worked seven and a half years at the Hut Group, ran the two, you know, two divisions and never fell out once.
Came close, came close once.
But yeah, we never fell out. And I think he'd claim he's Mr. Burnley for the last 44 years.
So yeah, I suppose we really liked the E commerce space. We felt like we had unique experience, we wanted to be in that space again. Felt like even though it was maturing, there was a huge amount of opportunity and then we were just studying different models. Do we go and start up our own business? You can probably do one of those every five, six, seven years and you know, the success rate is, is not certain. And we started looking at the private equity model like, you know, the thing that really resonates and still, still remember now is me seeing the Fortune 400 in the US which is the list of the 400 most wealthy people and the biggest category within that, I thought it would be in tech or oil and gas and it was actually private equity founders so caught my attention and then we started studying that model and, and it's a phenomenal model and we actually were then quite underwhelmed with the returns that those top quartile top decile P funds were returning. We re engineered some of our history into those metrics. We thought actually there can definitely be a better outcome here. And then there was no dedicated specialist E Commerce D2C investors that had experience as operators.
[00:05:09] Speaker B: Well, we'll come on to talk a bit more about the fundraising process and how you actually operate the investment fund. But I think it might just be worth talking initially about the investment that we've just mentioned already, the Beauty Tech Group. It would be great if you could just talk about that investment. It's quite a high profile investment.
And just that story leading up to the ipo.
[00:05:36] Speaker C: Yeah, I mean our first investment. So it couldn't have gone any better.
I think Lawrence, Andrew and Sam are all great. Lawrence and Andrew are the founders. But actually Sam Glynn, they consider him a founder. He's really driven.
Well, he's made a huge impact in that business. So first of all, you start with those three great people. I think the biggest difference really, I think when private equity are looking at deals, they're typically looking for a good brand, a good category in market growth. Back in a good management team.
I'd say they kind of boil the ocean on DD and they're actually thinking about downside protection.
And these guys had been through a couple of private equity rounds before, so that helped cause they were familiar with the process.
And then we, from day one really we've kind of built our own investment case. We've got a three year plan that we go through with the management and because we're in there with them in the trenches on day one. So their problems are our problems. Their successes, Our successes were literally alongside them. Some of those growth opportunities that we identify will put some of our complete resource into that business to help execute on those.
We always bring ourselves out the business when it's proven it's business case, we'll recruit its own people.
But I think our starting point of us, we've been in their shoes, we're equals. You know, we share your problems with us because we know there's problems every day, especially when you're international, internationalizing an E commerce business.
So I think the relationships are really good and I think we have that very different approach. Day one we're thinking about okay, how do we grow this together and how do we solve those problems together. And I do think that kind of mindset and approach is a, is a really different position from what traditional private equity is, but couldn't have gone better.
There was a lot of transformation. I think what I kind of like people to know actually about our journey is it wasn't just that great business, great category and you just accelerate in that same business. The business has actually been through a lot of transformation. A third of its sales were own brand. Today, 100% of its sales are own brand. It's much more international than it was. It Acquired two other brands within that. So it was Current Body when we bought it. It's now the Beauty Tech Group because actually it's this home of beauty tech.
So yeah, what is really pleasing is that transformation of the journey. It wasn't just simply backing a winner and helping it accelerate. There was lots of moments that were. Decision making was not obvious, but the execution of it was exceptional.
[00:08:13] Speaker B: A lot of the private equity houses that we deal with don't get very involved in the management of the businesses. They'll often put a non exec director on the board, maybe a chairman and they do provide some support. But it sounds like you're at the other end of the spectrum where you're bringing quite a lot of added value and getting quite heavily involved in the decision making process.
And it sounds like that's a feature of what you're offering. I'm interested in how you work with the management team.
The decisions that are driving growth, are they your decisions or their decisions? I assume the board's discussing things and there's different stages.
[00:08:54] Speaker C: So when we are doing RDD then we don't really bother with IMs from management teams. And currentbody actually was at the end of a process with Stifel actually that hadn't been successful and you could see that IM was going in a direction actually that, you know, felt like they probably had to go in to kind of raise the capital. And when we start plugging the data in and looking at the actual business, those metrics that matter for that business and the potential going forward, it was really clear for us to connect with the management team, go, God, you've got something really special here. And they're like, yeah, we have. It's harder for traditional PE to see it because it's not in the historics, you can't financially remodel it, but it's in the data points.
So I think our approach, because we've been operators, we look at the.
We look at the data that matter for that business, the E Commerce data points that matter for that business at that time. We're not necessarily looking to financial modeling and looking at the previous and rolling it forward, which is quite typical of private equity. So we connected really early to go, wow, this is gold, this is gold. And it wasn't necessarily that obvious. So I think that kind of gave us a really good starting point, but it just allowed us to connect with the management and then feel like they were being backed because we could see what they could see. I do think that's often missed by traditional Private equity. If you've not been in those businesses and you're kind of looking at a macro level.
So then there are, you know, our starting position is kind of we can get comfortable with the investment based on our commercial DD that we do. And then really it's how well you connect with management on that plan. And if you get comfort and collectively going, yes, this is the right direction and whether to support so those growth opportunities. If there's no resource that the business has got today, we've got some resource that can put in. But the, the priority is always that business recruiting its own resource and making its own decisions. But we're in the trenches with them.
But it's always the management team that have got to make the decision and be responsible for the execution of it.
[00:11:06] Speaker A: How many staff has ecomplete got now?
[00:11:08] Speaker C: 30Ish, 35.
[00:11:10] Speaker B: Okay, so it's quite a big group then.
And it's four investments you've made.
[00:11:16] Speaker C: Some of our people actually went into current body and stayed in there permanently, which is great. The majority kind of come back out because they're just helping set something up or they're helping bridge the gap of resource or maybe some knowledge.
But it's really always about that business being standalone, recruiting its own people. And, you know, we're pretty cunning in terms of being a buffer for that business. You know, if they need resource or they need any expertise anywhere, they can come and call on it from us.
[00:11:43] Speaker B: So there'll be quite a lot of private equity investors watching the podcast and thinking, oh, I wouldn't mind if I could set up my own fund.
It would be useful. Interesting to hear how you went around raising funds for the investments.
[00:12:01] Speaker C: Yeah, and it's definitely hard and it's not our skill set.
We've raised 100 million over the last four and a half years, so people react to that quite well. So our indication is, yeah, we're doing okay, because I think people are quite surprised we managed to do that. But it's hard.
I think what's really, what you realize is you're trading your reputation for capital and then on every investment, you're backing that investment again with your professional life, which may seem a bit dramatic, but you know that it. That people are giving you capital because they believe in you, but you know, they'll only believe in you if you keep delivering success.
So it's a really. Yeah, it's a really important process to try and get the right shareholders on board and even more important to back the right assets and help them grow.
[00:12:54] Speaker B: And Provide an exit and the type of investor. It sounds like you've got a whole range of different types of investors with private individuals, family offices.
[00:13:03] Speaker C: Yeah. And again, not through choice or strategy or anything.
It is speaking to people and seeing who resonated with us. And we do have a different, different model to traditional private equity and most of our investors are probably in some other funds or have done some private equity investing.
So we do get, we get feedback all the time of okay, this is different, this is interesting.
We like to think we've not got a reputation really in the private equity world yet. We're starting to build one from current body, the success of that exit.
But we've not really, we've not had that reputation. So we've got a story that sounds interesting and exciting for people but it really is all about distributions and delivery and PE's not really been doing much of that lately. So we do feel like we're in a good place to stand out.
[00:13:51] Speaker B: Yeah. So you've effectively done a fundraise for that first investment and then that's absolutely flown.
And so you've then followed on with similar fundraisers on other investments. It might just be worth talking for a minute about the IPO of Beauty Tech because obviously that was another transaction that will have. It sounds like that created value, value realisation opportunity for people.
[00:14:19] Speaker C: Yeah, I mean so the businesses like shot the lights out, overperformed even our ambitious plan.
So in theory it should have been really easy to. We should have had people knocking our door down 10 times the EBITDA in four year period. And the growth's been obviously very, very solid as well.
But you're in a period where in my view private equity is just paused really is probably the best way of saying it. Portfolios are fairly clogged up with I'd say possibly overpriced assets that may be underperformed. And a lot of people made some.
[00:14:54] Speaker B: Heroic investments about three or four years ago. So yeah, I understand that.
[00:14:58] Speaker C: So there's a lot of hesitation in the PE world and you're then trying to sell the Beauty Tech Group for 300 million. You've got to find one investor to pay 300 million. In a time where private equity is fairly paused, people haven't really been able to identify the winners in E commerce either as well historically looking at, okay, what deals worked and what didn't work and how did they retrospectively understand the difference to how do you pick those winners.
So I think there's nervousness about DTC investing. There's a General pause in private equity anyway, market conditions aren't great, interest rates, all those things that combine to be. It's really impressive that we've been part of the growth of a great business in that period. But the private equity world is just not that active and consumer is very unpopular which you know, for us it's quite crazy because we just individually look at that one asset and there's so many growth levers. It, it looks phenomenal.
So it was a really commercial decision and we went on the journey with obviously Lawrence and Sam and Andrew and for us it was quite an easy decision commercially because you're trying to find one private equity house to spend 300 million, who's got to believe it's going to go to a billion or you're trying to find 20, 30 public listed investors that are going to write a check for 2 to 10 to raise 100 million for a third of the asset. Because when we listed it we sold 30% of it and we rolled 70.
So it's quite an easy commercial decision for us in terms of the ability to execute. The business was incredibly well run. So we weren't too worried about the process, we were worried about the market. But we felt we had more opportunity with that decision rather than waiting for the private equity market to come back in, get some momentum. So for us commercially it kind of made sense. You're just saying trying to find one person 300 or you're trying to find 20, 30 to write smaller checks. Very different decision for Lawrence, for Sam and Andrew because it changes their world dramatically.
So obviously there was more dimensions to them thinking about it. I think commercially we as a group agreed actually yeah, this feels like the right commercial route that we could execute on.
But they're living in a very different world so it was really their decision and could they get comfortable with what that looked like for them?
I think the approach has been really, really, really smart. You know we got some really good advice and definitely call out like Berenberg were really, really impressive.
But as long as you're not being, you can't be greedy going onto the market, you've got to entice people to come and buy into this great asset so you know that you're going to the market with a discount as well when you're first listing and you've got to really believe in the long term trajectory of the business.
So you really just can't oversell it early on and you've got to be comfortable that you're going to beat the numbers and like you know, we can't say that for certain, but we're really comfortable with the momentum of the business and we're really happy to be rolling forward with 70% of our stake locked in for a period of time because we really believe in the business and the management.
[00:18:15] Speaker B: Yeah, that's a great story and good luck going forward.
I'll just pick up on the point you made. A lot of private equity houses are allergic to consumer at the moment, whereas it looks like you're specifically searching it out. So that does provide a differentiation to. You might just be worth talking a little bit about the consumer market and how you view that as an investment opportunities and which bits are good and.
[00:18:44] Speaker C: And this where I think we've definitely got an advantage and private equity is probably more macro and we really, we're not as bothered about the market growth because we've been executors and I've never grown a business that's been in line with the market growth.
It's been faster or slower or. I'm not saying we've always kind of beat that market growth, but I think it's only relevant a very macro level.
So we look at the business individually itself, look at all those data KPIs that are really important to growing E commerce businesses and try and understand how that can operate and win in its current territory and how it can win and operate in international territories.
So our starting point is really different. We don't mind what the category is, we're comfortable with beauty and nutrition, but we actually were quite agnostic to the category and we know there is a large amount of consumer spend and even if it's slowing down in a territory like the uk, the most obvious question we got over the last few weeks was have you grown, you know, been part of that growth journey of a business in the UK that's grown so fast with quite high average order value as well in a really tough market.
And like the real answer is, well, you've got to perform well in your domestic market and you've got to win, you've got to outperform, you've got to be the leader. But actually the best way to grow in a tough market in the UK is grow internationally.
So I think we've got more conviction on being able to do that because we've done it. Whereas a traditional P will be coming into that scenario and it's a story that might happen, but they've got no proof points where our proof points are all in the data of that business live every day. So we can get more conviction.
[00:20:25] Speaker B: So you've moved on and made some other investments. Now you've made three more investments. Presumably the success of that first one has encouraged investors into the next few. How's that been going?
[00:20:36] Speaker C: And Even on the IPO point, the pros and cons for us, we've sold 30%. All the shareholders have sold 30% equally.
So it's phenomenal for us in terms of awareness, reputation. We get invited to a few more things now. You guys wouldn't have had me on this podcast a few weeks ago.
[00:20:55] Speaker A: I don't think so much more. I think we'd have had you on any time.
[00:20:57] Speaker C: Yeah, I didn't realize how unpopular I was but yeah, you've, you've only actually distributed 30% of the return so we've not got that capital back. If that had been a full exit, you know, we'd have 5x the money for investors. So we could be going okay here, let's have some of that capital back for our next deal. So that's probably the negative. That money is still in that in the asset listed but we really believe in it. So it's going to mature.
But reputationally for us and the fact that we've been able to help execute that in this kind of a period is so strong for ecomplete but we can't necessarily go back to that pot of capital because it's not been realised yet for people.
So we're really trying to build out our network of high net worth funds, family offices to kind of go and feed our next deals.
[00:21:57] Speaker A: Question, if I may. I remember when I went to see you guys when you did the deal for you know, the Beauty Tech Group and Current Body as well and I might not be remembering this correctly, so correct me if I'm wrong, but I think you were talking about China and you were talking about the whole E commerce model and the way they're set up and am I right thinking I think you went out there to see it. So when you were talking about China and the internationalization of the business, you'd seen what they were doing and you were bringing that into your business, weren't you?
[00:22:22] Speaker C: Yeah, we've been experiencing China for quite a long time actually. A lot of the success that we had in beauty back in the hut group days was in China and that was really on price arbitrage and the head on technology.
It's funny actually because it's really difficult now to make money in China and we feel like they're ahead and that cycle is definitely Coming to the west where actually it's so easy for people to reach consumers with technology today. You know, just launch the Shopify website and you know, connect with some influencers and add spend on meta. It's become so easy. So actually social's in this maturity cycle for us.
Social first brand. Every brand has to be social first. You've kind of heard that over the last five years.
China shows that that's actually reaching maturity and it's really hard to make money. And then really interest in the next wave, which we're really excited about, is that AI first piece. But yeah, look, I really believe in China from the supply chain point of view, that was about product, the phenomenon manufacturing, really hard to compete with.
[00:23:30] Speaker B: It might just be worth expanding on that point you made about AI. Quite a lot of our guests in, we asked them what impact AI is going to have on their business and how they're operating. Have you got any thoughts on that?
[00:23:43] Speaker C: Yeah, we have and you know, it's fun because it's all theory at the moment and you know, a different thesis. And so all we really know is we feel really comfortable with the change that's coming because being in E commerce for the last 15 years, it's all always about change and you know, it's all about Google, then it's Facebook, then it's Instagram, now it's TikTok. And all these tools change around, you know, you. There was a time you had to build your own platform. I really wouldn't recommend doing that today. Use Shopify. And so the landscape's always changing, the jobs are often changing as well and the tools are changing. So this cycle really is super exciting for us because it's going to touch every cost level in the business. It's going to touch everything, it's going to enable efficiencies and yeah, it's going to change the landscape. I think the really rough theory is a business today that's got 50 headcount, that will have 15 to 20 headcount and it'll be doing the same things, much greater level. So we feel great because consumer's not going anywhere, but it's really unpopular for private equity.
D2C is unpopular for private equity and it's not going anywhere, it's growing.
So we're really comfortable in that space of D2C and consumer which are unpopular, which goes to price. So it's a good time to be buying assets because the. There's just not that much, you know, the demand's not matching the supply.
When you actually factor in what these businesses could look like in the next three years. It's a really exciting opportunity to be buying well in consumer, be buying well priced and being able to really enhance the EBITDA through the use of this technology.
[00:25:28] Speaker B: When we're running a sale process and we've got a collection of private equity bidders, say we're, we're selling a software business or something, we can get a well attended group of well attended auction with private equity funds bidding aggressively.
When we're running a process, if you've got somebody who's raising the funds for a specific deal then you can look carefully about whether the funding's in place. And so you can be at a slight disadvantage. I think what you're doing is in consumer, there are not that many well attended processes and so there'll be some businesses that are almost tailored for you because you're interested in them and you can bring something to them that a lot of the plain vanilla pea houses wouldn't bring.
But you'd probably need to get a deal, agree quite early because you need the confidence to go to your investors, presumably.
[00:26:25] Speaker C: Yeah, yeah, we really like getting into exclusivity.
It's probably quite, you're even seeing like sell side advisors now not taking, you know, good businesses on paper but just not taking them because you know, they feel like it'll be a wasted time because there's not the buyers there.
So some people that are involved in those scenarios, we get more leeway because actually they know the market's not there. Yeah.
And we're like look, yeah, we need to be in exclusivity and these are the kind of multiples that we're paying and you know, let's pull the data and have a look at it. So yeah, at the moment the, the market's quite, it's quite generous to, to our approach because there's not many alternatives. But we can get real high conviction quite quickly by just pulling some of that data and, and having an early look. So we can, we can get conviction to the, to the vendor and then we've got a decent network that we've built up now. But yeah, raising capital at the same time as going through a deal process is fairly tough. So we need to get better at that capital raising side which we think.
[00:27:32] Speaker B: We can do you think you'll go out and raise an actual fund?
[00:27:36] Speaker C: So I don't think there's pros and cons. Again, I think deal by deal provides a better solution to the investor if you're in a Fund.
It kind of works both ways, right. So you can still have great success and people roll in even if you have some losses.
A current body of a 5x can deal with a smaller asset that's not returned any capital. So it almost allows you to cover your sins a little bit but then it can distract from your returns. So we like the discipline of deal by dealing with. Because we've got to win every game, you know, it's as simple as that.
It's attractive thought kind of just having the pot money there actually because it's really hard doing it both at the same time. But I think we just really like the discipline of deal by deal.
[00:28:30] Speaker A: I was going to ask you a question. You spoke about D2C, you know, direct to consumer and you were saying that the private equity, you know, a bit nervous about that and I was just listing some of the companies here in the Northwest.
P Louise, you know, Refy represent obviously the Beauty Tech group did the IPO this year. I think Applied Nutrition did their IPO last year as well.
They are all massive D2C success stories in the Northwest. So I don't understand why private equity would be so nervous about investing in D2C that space when they are five really good examples of businesses absolutely flying.
[00:29:05] Speaker C: So I agree with you. But that typical private equity approach is, is looking at historicals as well and trying to look at the market and what's that market growth and these businesses that have just really overperformed and have got a, you know, a narrow, almost like a narrow set of foundations that have delivered that growth. So they're over reliant on TikTok for example or one specific channel. We see that as a positive because if you've gained so much traction here. Well actually if you apply the right kind of resource and strategy around the other channels, you can start building the business case to say okay well it's achieved this here. It means this, this, this and this, this is what the business can look like. Whereas private equity will see that as a risk that they don't know how to execute on and will it disappear one day.
[00:29:57] Speaker A: That's interesting because there's a company called Hair Syrup not targeting this demographic around the table but fantastic business based in, based in Wales just opened up a manster presence run by somebody called Lucy McLeod who's on Dragon's Den last year and it was six and a half million turnover, doing one and a half 1.4 million profit. And the Dragon said no to it because they couldn't see how they're going to get their return on investment from it. I think it's up to 10 million now.
Fascinating story. But 50% of their sales came through TikTok shop.
And actually Stephen Bartlett said, I see that as a weakness because you're very dependent on TikTok. The point you would say is private equity would look upon that as a bad thing. You would look upon it as a good thing.
[00:30:43] Speaker C: Yeah, yeah. If it's gained so much traction in that channel against all the competition that's there, why is it winning? And then if those dynamics you can still apply to these other channels which are more traditional and less exciting for the business as well. When you talk to, you know, you see these businesses really high growth and you talk to them about affiliates and SEO, they can't really recruit the right person for it. It's a, you know, it's a longer cycle to deliver success. But it's, you know, we, we like that diversification of different revenue channels because it protects the business. But you're proving that the business is winning in a really competitive space.
So why won't it win in these other channels that are actually less competitive than TikTok? For us, that's just about execution.
[00:31:25] Speaker A: I've got one other question and I'm going to see if Jonathan's got any questions he wants to finish up on. But obviously you're looking to raise 100 million at the moment as well.
I don't know if Jonathan's got any, but what's the appetite like?
[00:31:37] Speaker C: Success stories really help and we're just kind of putting that story together because when we came into private equity, all those things I said earlier on about we can be very different and we have a very different approach and we think we can win.
With going through the last 12 months especially, we've learned a hell of a lot more and we know a lot more and that AI shift is coming as well.
So we're just kind of building that story and building more conviction around being someone who's there to buy consumer D2C brands that are over reliant on a channel that haven't built a good finance function out because actually they're busy growing the business. And these are all reasons that traditional private equity wouldn't go into these businesses because they see them as risks, because we can deploy people into these businesses, we de risk those elements and actually we've built those businesses before in those business units. So it's something we've done and we've got a great group of people around us that can Help us execute so you can buy. Well, because DTC is unpopular and because consumer's unpopular and now with this shift with AI, that's super interesting for what returns could look like in the next three or four years. And then we feel like the deal processes aren't really fit for purpose for E commerce businesses today. It's almost like a deal process and a structure. It's almost like more stuck in that old economy.
So we're actually trying to also come up with what is a more efficient deal process because we'll get conviction quickly.
What drag steels out is the legal structure that you've got to go through which actually doesn't represent, you know, the conviction and actual risk of that one asset.
So yeah, we are bagging all that learning and we are, we're going to be going out in the next couple of months and trying to see what the interest is like to get more support for buying great DTC businesses that have proven themselves in the uk, you know, even if it's only on a couple of channels, but that we really believe can become global leaders as well. So you're trying to find those winners in the UK and understand if they can be winners in 20 other territories as well.
[00:33:48] Speaker B: It's a really interesting niche.
[00:33:51] Speaker C: Big niche consumer E Comm.
But yeah.
[00:33:55] Speaker A: So Jonathan, have you got any final questions before we finish for the first half of this episode?
[00:34:00] Speaker B: Yeah, well, the only thing that we're thinking when we were talking about the current body in beauty tech, we didn't really talk a lot about how you've engaged with the team there and just wouldn't mind talking. It's been a massive success.
How do you apportion credit for that?
[00:34:18] Speaker C: It's our first end to end. So from the dd, the acquisition to an actual exit and I got to give those guys a load of credit as well. They've really helped us shape our model, you know, so you always have a theory when you go into, you know, a new space of like this work, how we're going to add value here, here and here.
Yeah, and going through that process with those guys, we had a really good relationship, honest. And.
And they've also given us the feedback from our model that's helped shape, you know, how we approach our next few acquisitions. So we're actually really grateful for that is a great acquisition, it was a great return. But actually the learning that we've got from it and the interaction with those guys, we think actually it's just made us so much more better and fit for purpose for the future. So, yeah, grateful for the return and grateful for the experience with them.
[00:35:07] Speaker B: That's great.
[00:35:07] Speaker A: Well, it was a win win and this was a win win as well. Time for a quick break. When we come back, Jonathan and I will be discussing the interview and then we'll be answering listener questions.
Back for the second half of the Dealmaker Uncut podcast. We've just interviewed Paul Gedman of eComplete. What did you think, Jonathan?
[00:35:28] Speaker B: I thought it was really interesting. I mean, what they've got is a real specialism.
As we discussed, not every investor is keen on the consumer market and what they are offering is a solution where they're interested in a bit of the market that other people are less interested in and they're providing an opportunity to improve businesses using their skills and experience.
And they proved that it works. So I think that it was a really interesting story. I really liked him. I thought, sounds like the offering's really good.
[00:36:02] Speaker A: Yeah, he's the guy who comes in with two coffees. Literally two coffees as well. I think the great thing about what Paul and Andy have done is they've stuck to their knitting, which is the E commerce space as well. And it is such a compelling story as well. And actually I think it's the sort of story that private equity can't ignore. This next section is called Ask Jonathan. It's when listeners can ask you any question they want. We've two cracking questions today. There's a little, well, there's a well known phrase which is Wall street has only got to sneeze and the rest of the world catches a cold. You've just spent a week in Alvarez and Marcel's New York office. I don't know what the weather was like, but what's the market like stateside, Jonathan?
[00:36:39] Speaker B: The weather was really hot, actually.
Unusually. They had a seasonal high and they've over there what's interesting, valuations are really rich at the moment. Obviously.
It's been quite well documented that the tech AI in particular AI part of the tech market has been very highly rated and I think that means that over there valuations are strong.
When I was over there actually, I met a couple of businesses from the UK that were over there pitching to investors specifically to try to take advantage of that bit of arbitrage where the market in the US is so strong they were expecting they could get a turn or two extra on a sale price process.
So yeah, the economy there is in good growth and their investor base is confident whether it will last enduringly into the future. Time will tell might be a correction due, but at the moment it's good over there.
[00:37:44] Speaker A: I saw a photo as well on your Instagram account. What game did you watch?
[00:37:48] Speaker B: Yeah, we went to see the New York Giants play the Philadelphia Eagles, which they were apparently destined to lose heavily and in fact they won. So apparently it was the best New York Giants game to go to for about a decade.
[00:38:04] Speaker A: Final question is from a big fan of the podcast and says, Jonathan, I love the podcast, but as an advisor, can you explain your role in the deal? And I'm just glad they didn't ask me what I do. But yeah, what do you do?
[00:38:16] Speaker B: So I suppose 85% of the deals that we advise on or that I advise on are sales processes. So we're, we're typically appointed as the lead financial advisor to a bunch of shareholders who own a business to run the sale process. So we help them prepare their business for sale, we appoint all the other advisors or help them appoint the other advisors to help due diligence providers and get the business prepared for sale. And then we then contact buyers, persuade them why they should be interested in the business, and then we conduct a sale process, typically a two round process. We approach lots of potential buyers, receive offers, and then we run a second round where a lot of the due diligence is actually completed by maybe two or three buyers and get final bids and then negotiate a final deal and get the deal completed. So all that will typically take anything from six to nine months.
But we're often working with entrepreneurs and founders, sometimes with private equity houses, but often those individuals have a lot of emotional investment in their businesses. So a lot of what we're doing is helping people understand what's happening in the process. And we're often as much social workers as we are corporate financiers.
But I suppose what I love about it is helping somebody who's built up a business, it's often the most important deal they'll ever do in their lives.
Appointing us as advisors is probably the most important advisory appointment. And helping them realize their Life's work or 10 years work or whatever is really fulfilling.
Yeah. So that's what we do.
[00:40:12] Speaker A: And very well you do it too. That's all for this episode of the Dealmaker Uncut podcast. Powered by Alvarez and Marcel. Final shout out to the star of the show, Jonathan Boyers. Thanks Chris, and don't forget to subscribe to the podcast, tell your friends and family and follow us on social media.
