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 Maguire, 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 I'm the Executive Editor of Business Cloud. As always, I'm joined by the multiple award winning deal maker himself, Jonathan Boyers. Jonathan's been involved in deals totaling billions of pounds during his long and illustrious career and he's Managing Director and head of Alvarez and Marcel's corporate finance practice in the uk. Welcome, Jonathan.
[00:00:47] Speaker B: Hi, Chris.
[00:00:49] Speaker A: And this is the podcast that gets you inside the deal. In the first part of the deal today we're going to be interviewing our special guest and after that we're going to have a little break. And in part two, Jonathan will be leaning on his 35 plus years of experience of working in corporate finance to answer your dear questions. So, Jonathan, who are we speaking to today?
[00:01:08] Speaker B: Thanks, Chris. Well, today we are honoured to be speaking to Steve Rigby, who is the CEO of Rigby Group. So Steve is an entrepreneur, founder, philanthropist, businessman, very active in the media as well. So delighted to have you joining us.
Rigby Group is one of the world's largest and most successful family owned businesses. So I'm looking forward to hearing a lot more about that business and how you run it.
[00:01:37] Speaker C: Great. Nice to be here.
[00:01:38] Speaker D: Thank you.
[00:01:39] Speaker A: And it's also worth saying, under your leadership, the Rigby Group's grown its turnover from 1.5 billion to 4 billion as well. So Steve, I'm going to take you back a little bit actually to the inception of the business. You're the second generation of the Rigby family to run the group, which was founded 51 years ago. It was in 1975 by your father, Sir Peter Rigby, with a 2,000 pound loan. For the benefit of our listeners and our viewers, can you describe Rigby Group and some of the businesses that sit within it?
[00:02:05] Speaker C: Sure.
[00:02:05] Speaker D: So the main business, Chris, is an
[00:02:07] Speaker C: IT services business called SCC that's about 45 years old. As with many groups, the group has morphed over the years, but that's been a very consistent part. It makes up about 85% of our revenue, quite a substantial amount of our
[00:02:21] Speaker D: long term profitability, and is a business that we intend to hold through the generations. So as you say, we're second generation. In fact, the third generation are already in the business.
And we hope SEC is a business that can survive despite being a technology business and being very old for a technology business, we hope that business will go through the generation. So it operates in the uk, France, Spain, Romania and Vietnam and supplies, maintains and supports infrastructure on behalf of large governments and large corporates.
[00:02:52] Speaker A: And before Jonathan dives in, I'm always interested in the human interest of it all. And I'm just curious to know what it was like for you and your brother James growing up when your father's Sir Peter Rigby and he's in all the headlines and he's making deals and stuff like that. What was it like for you growing up and was there a pressure attached to that?
[00:03:12] Speaker D: I think the essence of a family business, I often have this debate.
People think it's a long term, multi generational business. If you're sat talking with your children about business around the dinner table as you are, if you're a business owner, in my view, that's a family business. So despite it being first generation with Peter, I grew up in a household that was entrepreneurial and we were constantly talking about business. Whether I knew that or not at the time, I now reflect back and look at the way I've brought up my children. In reality, my middle son could tell you what EBITDA was when he was 12 as an example. So, you know, you end up talking in a language that your children get to understand. So I was very lucky to be built up in that household and in an environment where going into business felt a very natural thing to do.
[00:03:56] Speaker A: I reckon Jonathan's kiss could say what Ebert dar was at 12 as well, because Jonathan talks about it. But. Yeah, over to you, Jonathan.
[00:04:03] Speaker B: Yeah, no, I'm interested in how you. Because the business has grown quite a lot under your stewardship, hasn't it? And I'm just interested in the. The growth story and how you've achieved that.
[00:04:15] Speaker D: Yes, in fact, we've a non exec director just retiring and we had a board meeting last week and we were talking about that journey. He'd been involved for 15 years and the business has transitioned dramatically.
And actually, as we look at this period ahead, we're stepping into this potential recession that the country's facing right now in incredible health and it's the first time we've ever been in that position. So we're 50 years old, but it's the first time the group's been in a position where it's really sat on a lot of cash resources. So that journey has been a journey of not just trading companies, but also going through buy and build, what you
[00:04:47] Speaker C: and I would call a roll up.
[00:04:50] Speaker D: And we've had a number of successful roll ups during that period of time. So over the last, in fact 13 years we've disposed of about £750 million of businesses despite keeping our main trading company. So that journey of sort of wealth creation has now put us in a position where the family is in a strong position. It's got a great main trading company coupled with a very strong family office and an ability to create businesses through experience, know how expertise in a particular sector and that's quite a powerful environment that also has led us into venture capital as well as running public market investments. So it's quite a powerful position to be in. And that journey has occurred through the creation of wealth and importantly through the retention of that wealth in a company that allows that wealth to compound. And compounding is one of the best inventions in the financial world. Money has this habit of growing if you look after it and nurture it.
[00:05:45] Speaker B: Well, the businesses that you sold, I see that you had an airport group that you've sold recently. Can you just talk about that deal again?
[00:05:53] Speaker D: We've often followed interest, so my father was a keen aviator. We bought Coventry Airport, which we still own, but from that we went into post global financial crisis. The unwinding of debt in airports took a little bit of time to happen before it reached maturity. Often the deals were done in 0708 on five and six year terms. So we entered that market in about 2013, acquired a business from Belfor BT, then went and acquired a business from Penta Capital and then finally one from Manchester Airports Group. All in an environment where they were semi distressed in some situations, fully distressed in other situations they were perhaps less loved, like in Manchester Airport. So we bought a series of assets that were deemed to be subscale, put them together, gained the synergies, effectively financed them, nurtured and loved them for a period of time, about 100 board meetings in my case, we got slowed down by Covid. Our exit was intended to be a little earlier, but Covid, unfortunately for the industry, slowed everyone down by about three years and then successfully sold that business to ICG, who are a FTSE 100 fund. That was important for us. We wanted to keep it as a UK asset, but you know, a good journey and 2.7 times money. So for us a good journey along
[00:07:07] Speaker B: the way and I suppose it focuses the Group because you've also been building an investment business that looks like it's quite focused on technology investment. So would you be able to talk a bit about how that's evolving?
[00:07:19] Speaker D: Yes. So I think as often happens in family businesses, in fact, you end up when you diversify, you diversify too far, too wide. And that was the case with us. So in the last few years we've been really paring that back down and we're principally a technology or real estate based business. So we remain with some assets in commercial real estate, specifically centred around the large developments at Coventry Airport with residential, a business we have called Elect. And with our hotels business, you own
[00:07:44] Speaker B: Mallory Court, don't you, which is a hotel I stayed at regularly.
[00:07:48] Speaker D: Okay, very good, thank you.
So outside of real estate, we are a technology business and you'll see us more and more in that field. So today, a prolific investor in AI, both here in the uk, but most importantly in the us, we run our own private equity portfolio with our own capital and as I get older, I don't know, my energy is quite the same as it used to be to go on the six, seven year journeys that are required. But we've still got five plays, all technology businesses in that area and obviously then the main trade company. So you will see us more and more morph back to being really a technology only group in time.
[00:08:26] Speaker B: Could you talk a little bit about the developments in the software sector? So we've been, we were talking earlier about the software sell off that's happened over the last few months and how AI is starting to affect that market. I'd be really interested in your perspective on how that's evolving.
[00:08:46] Speaker D: So I don't think any business model is safe at this moment. And the world is focusing on SaaS software businesses, specifically what people have coined the SAS apocalypse. And that's seen very material changes in market valuations, both private and public market valuations in the course of the last six weeks. But I think it's symptomatic of the change that's coming in all industry and that's the same for your business as well as it is for mine at the moment. What I think we're generally seeing across the board in enterprises is slow adoption and that's driven through customers being slow in their transition and most importantly being employees being slow. There is a growing almost resentment in AI in consumers that's coming through in a lot of data at the US at the moment and people are worried about the impact it's going to have on their lives. The reality is it's coming, the train has left the station and we as business leaders have to change our companies. So the real shame really for employees is they've got to really get on this journey with us because it is
[00:09:47] Speaker C: definitely coming and it's going to come to software companies very strongly because ultimately historically you had fixed code and we as users interacted with that fixed code. In the world of tomorrow, you're going to have agent to agent interaction and in fact our role will change quite dramatically. So that's playing through in people's thought processes. On SaaS businesses which have had very high multiples at the very top end, you know, we're talking in multiples of 25 and 27 times EBITDA, 7 times Revenue type multiples. In a world where that's no longer safer, where you can't predict that safe,
[00:10:20] Speaker D: you know, if you're, if your ServiceNow or your SAP or your Oracle, you've likely got a very strong moat because they're very expensive, very complicated systems to take out. But if you're a point solution solving a particular problem in HR or legal, your moat is really quite weak.
[00:10:37] Speaker C: So I think we're going to see
[00:10:39] Speaker D: this ongoing revaluation, perhaps normalization of SaaS based businesses. At the moment, unfortunately, the markets are closed for new debt and that's not helpful in the world of M and A and it's not helpful for me as an investor and that's predominantly why as an investor we're focused on the infrastructure layer right now. We're avoiding applications broadly with the exception of productivity and we're focused much more on that infrastructure layer and where, if you like what has been called the picks and shovels of AI, that's where our focus is. But certainly in the SaaS world, which
[00:11:11] Speaker C: is an important world, it's a choppy time at the moment. I suspect that will continue throughout the year.
[00:11:15] Speaker A: What are you seeing?
[00:11:17] Speaker B: Yeah, they're very similar.
We've got a number of clients in the software sector. Some of them have native software in their businesses and they're expecting to be winners.
Some of them are not and they're going to have to take a more defensive position.
It's just an interesting, interesting time, but I think there's quite a lot of recalibration going on in terms of value, aspirations and strategies. But I mean I am interested in what you say about AI and particularly we're now implementing AI in our business and I look across the sectors and like you say, I think almost driving the change into the business is a change management process that I think a lot of leaders are not really used to managing change so effectively.
And I'm interested in how you're doing it in your, in your core business.
[00:12:12] Speaker D: Too slowly is the honest answer. Because as you say, this is actually business transformation, it's not an AI issue. So you're reinventing a process and you know, for you, that process, you know, if it was in audit as an example, that's really rethinking the whole stack of audit and how you go about that process, how much human interaction versus machine is required. Do you change your business model on charge out and fees? I doubt it.
But every business model is having to be rethought. So we're making progress, but I think like most businesses, we're behind where we would like to be. The challenge we face collectively is that whilst this train is moving slowly today,
[00:12:48] Speaker C: it's going to gather momentum and if you don't keep up with that pace of change, then you're going to be in difficulty. And as I say, the key aspect there is both vision and leadership for us as leaders and businesses, but importantly employee adoption.
And I do sense a substantial amount of employee resistance and that's almost becoming a little bit entrenched.
[00:13:09] Speaker B: I agree, we've seen the same and it's sort of explaining to people the benefits to them and the benefits to the business, but driving the change. You can't just tell people to start using it, you've got to show them how to do it.
[00:13:25] Speaker C: Agreed.
[00:13:26] Speaker D: It's a fascinating time and this is a government issue, a nationwide issue.
[00:13:31] Speaker C: So the government's made a decision to
[00:13:34] Speaker D: train 10 million people in AI.
[00:13:35] Speaker C: But if you dive beneath the surface, it's really quite light training and in reality the delivery of training has to fall in the private sector.
The question is, do we have to be incentivized in the tax system to do that?
But learning and development for us as employers, large employers, is going to become more and more important.
[00:13:54] Speaker B: One of the things that struck me, we were talking to a client the other day who's got some Tech DD underway and the Tech DD provider was asking for a five year roadmap of how the tech should evolve. And they were saying we probably couldn't give you a six month roadmap because they're AI native. In part, every two weeks they're upgrading their software stack so we can't even tell you what we'll be doing in three months, never mind five years. So I think everybody's time frames need to change.
It's a fascinating time.
[00:14:34] Speaker A: I'm going to continue the link talking about AI Just change it from an investment point of view. So I was looking at your investments. I think you've invested in around 30 businesses, 13 of which are in the UK. 17 are in the US you mentioned earlier that the US is very different to the UK. Just explain how they are so different. And in terms of the companies you're
[00:14:52] Speaker C: investing in as well, I mean the most standout one, because the math is in my head, I wrote it down a few days ago, is Anthropic. So we're lucky to be an investor in anthropic two years ago. But bear in mind it's a four year old company so early enough. So end of 2023, $100 million, end of 2024, a billion dollars, end of 2025, $16 billion and end of February 26, $19 billion. So you have these companies growing at extraordinary paces and Anthropic happens to be probably one of the most extraordinary. But there are plenty of others. I take Sierra as an example, which is a contact center based business, 7/4 to $100 million. So the growth of these organizations in the US is extraordinary.
In the UK where we've been an early stage investor for a little bit longer, just the growth trajectory is less. And that's partly because we think too much about our current shores and not enough about the world. And I think the Americans take a global first position, whereas we take prove it in the UK and then expand overseas. And that's partly down to a weight
[00:15:58] Speaker D: of capital and the amount of risk that we take.
[00:16:01] Speaker C: So you know, that does put the UK at a disadvantage despite the fact
[00:16:04] Speaker D: we've got some of the brightest minds
[00:16:06] Speaker C: in AI in the UK I think our ambition, our global ambition holds us back.
[00:16:11] Speaker A: Tony, you mentioned Anthropic, which is in the news at the moment recording this at the end of March.
And obviously Anthropic slots in a fairly high profile dispute with a certain Donald Trump and the US Department of Defense over how AI is being deployed.
Do you look at that and think, you know, your investment could be affected by geopolitics and stuff like that?
[00:16:34] Speaker D: I think actually ironically, I think Anthropic
[00:16:36] Speaker C: would be strengthened by that dispute. I think, you know, that the Trump administration, I'm sure we've all seen it in the news in the last few days, seems to be losing some legitimacy in the way it's approaching life. And there seems to be more bravery coming in news reporters and I understand in Congress. So, you know, I think what, you know, threatening companies because they want to protect their own intellectual property, I don't think is a very sensible thing to do. At the end of the day, America wants to grow these companies, they're important companies.
And threatening organizations and threatening their supplier base seems to be a regressive step. So I think actually the way OpenAI went about responding, they were heavily criticized when they took over the contract.
So I think you'll find some of the backlash of some of this activity in the US is coming through. Importantly in the last four weeks, big change on sovereignty and the relevance of sovereignty in the world. You've got countries like France thinking about taking out Microsoft Teams, Zoom, because of threats of their national security.
So the world is thinking differently about the US right now. That's a great opportunity for the uk. It's a great opportunity for businesses like our respective businesses to advise customers and think about how we can become more sovereign, more sovereign in our delivery mechanisms. And that's large language models, it's data centers. Ultimately for some organizations it may even be down to a chip level. So I think there's quite a bit of change coming which hopefully should present opportunity in Europe.
[00:18:09] Speaker B: I suppose one of the things that I've often thought around is how the US in technology is dominating the world. It's just almost frustrating. How can the UK regain some power in that bit of the market?
[00:18:25] Speaker D: Yeah, I think we just have to
[00:18:26] Speaker C: probably dislocate the trillion dollar plus companies because they are, they are so far ahead and they've got importantly such substantial
[00:18:34] Speaker D: cash machines in Meta, in Google, in Microsoft, in Apple.
[00:18:39] Speaker C: They've got hundred billion dollar cash machines a year and the weight of capital that provides to them. Bearing in mind you've got Amazon deploying 200 billion of capital, the GDP of Morocco is 180 billion as an example. So you've got companies deploying the capital of an entire country's revenue. These are extraordinary times.
[00:19:00] Speaker D: So they are long gone. Those organizations are going to become $10 trillion plus organisations in the fullness of time. So we can't compete there. You know, our biggest company in the
[00:19:10] Speaker C: UK today is HSBC at about 300 billion pounds in context. So we can't go there, but that doesn't mean that we can't provide the infrastructure and supporting capabilities that sit around these big players. So we have a good part to play. You know, we're the third largest AI economy in the world.
I have every hope that we're going to continue to do well and that we'll continue to have great UK businesses.
[00:19:33] Speaker B: Could you talk about what a good investment opportunity would look like for you now?
If you've got the ideal opportunity to invest, what would you be looking for?
[00:19:44] Speaker C: I think we've made a few mistakes in the last couple of years on our investments and I think the mistake we've made is thinking about where the ball is rather than where the ball's going to be.
And I think right now you've got to look forward. You can't just think about what's in front of you. So at the moment, you know, we've pulled back a little bit around our direct company investing, not on venture. That's full steam at the moment because it's a race against time to get involved with the companies that are going to change society.
And we're making good progress in our journey to do that. Not just private companies, but also investing in the public markets. We've got about 80 companies in our sites and we've invested in just over 30 in total.
[00:20:22] Speaker B: That's just taking strategic investment.
[00:20:24] Speaker C: Strategic investment. So getting a return on our money when it comes to buying businesses at this moment, it is quite difficult to see forward. I think we perhaps need to let the dust settle a little bit.
So, you know, we're focused more on organic investment in our core businesses right now rather than inorganic.
And that's again partly why people are
[00:20:44] Speaker D: pausing with what's happening in SaaS.
[00:20:46] Speaker C: It is.
It is difficult at this moment to predict exactly where business models might go to.
[00:20:51] Speaker A: Can I talk to you about growth? It's something that you've spoken about a lot and I follow you on LinkedIn as well. And I want to talk to you later about your approach to social media because I think it's interesting how leaders take the lead on social media platforms as well. So the UK economy failed to grow in January and it was only 0.1 in December and 0.2 in November. And this was before the conflict in the Middle east as well. You've probably predicted a recession and now we've got the curve ball of the Iran war. You think we should be aiming for at least.0.5% growth a quarter.
What's your advice to Rachel Reeves to get growth? What would you say to her if she was in the room right now?
[00:21:28] Speaker C: I'm fortunate to sit in the room sometimes with our politicians, including Rachel, and I think that the government need to start thinking more in a joined up manner. So if I take the changes in the 24 budget, which probably are the most significant changes to our economy.
Individually, the government, I do believe there was a black hole. We can argue about the size of the number, but I think we all understood there were unfunded promises or issues around pay rises that were kicked down the road. So whether we agree with 22 billion or not, there was definitely an unfunded issue. So National Insurance in its own right was possibly an area you would have turned to. For me, I would have undone the last ditch conservative attempts around reducing employee national insurance that cost 19 billion. And we did two changes in January and then in April of 24 that could easily have been undone. We'd live with that taxation for 13 years. So for me I would have gone there, but I understood that she went to National Insurance to then change the thresholds which impact part time working, to then change the low pay commissions ratio, that they changed the minimum wage from 60 to 60 of an average salary. To do those three things in tandem were poorly thought through. And the outcome has transpired that we've lost 200,000 jobs in retail and hospitality sectors that were already under substantial pressure. The outcome is that we've now got 5.2% heading to 5.5% unemployment. The outcome is we've got 400,000 young people, unfortunately not in work, seeking work and we've taken away many of those part time jobs.
And in an environment where we've now got AI coming, we haven't looked forward to thinking about where that ball might go and that actually we're now seeing lots of graduate jobs removed and in fact those graduates that have now got substantial debt behind them are having to go down to those low paid minimum wage jobs, pushing down further the disadvantaged young people that are the very people that the government came into power to protect.
The visibility on joining those type of decisions together is one example has been poor. And if I was in the room, I think the government needs to start thinking more holistically about the changes to policy that they're taking and think about that in an environment where we are in a changing world. So, yes, the one thing she's done a good job on, despite what's happened to the bond markets in the last two weeks, is to stabilize the bond markets. It is clear that the bond markets are very jittery and Reeves has done a good job in stabilizing that. We just saw our 10 year money go above 10% higher than the Liz Truss moment. So it's clear that the UK is not regarded well from a bond perspective with limited tolerance. So her fiscal control has been good but the way in which she's gone about it unfortunately has sucked confidence out of the market and has slowed growth down, despite that being their supposed primary lever.
[00:24:22] Speaker A: I speak to a lot of businesses and, you know, and I interview a lot of businesses and we were talking about the 2024 budget and there's a guy who runs two coffee shops with his wife. It's just, just a, you know, a very practical example. And he basically said that look what's happened with national insurance and minimum wage. That the idea is it puts money into the pocket of these members of staff. What we do instead of employing him for eight hours, we employ him for six because we can't afford to employ him at eight. You know, now if that is multiplied millions of times, then you can see exactly what you've spoken about there as well. I read one of your LinkedIn posts and you said, I'm going to quote you, the developed world is teetering on the brink of recession and that we're quote, facing a slow growth environment where the welfare state continues to expand. How do you change that cycle?
[00:25:06] Speaker C: So, I mean, it's not a UK issue. Germany's in equally a perilous position with their pension liability. France, as we know, is a relatively socialist state, most important country for us, I have to say.
But you know, has been shouldering a huge welfare burden, final salary, pension style burden for many years. So Italy, you know, obviously been in a low growth environment. The only light I can see in Europe and sort of developed Europe to Spain where the economy is doing well and you know, lots of confidence in Spain, which is good to see. So, you know, this is a European developed world issue where our welfare states have ballooned to an environment. Today, 52% of people in the UK are net beneficiaries of benefits or benefits in kind.
[00:25:50] Speaker D: So benefits in kind is the NHS as an example.
[00:25:52] Speaker C: The average take of those people is £27,000.
So in an environment where we've too few people working, the burden starts going on the shoulders of people that are working. But it doesn't take a rocket scientist to say that you have a deficit in a country if over half your population aren't working or aren't contributing to society.
So, you know, we've got to change the welfare system. I mean, tweaking the taxation system. We're on a journey, we're at 38% today of GDP tax, we're on a journey through 40%. That's going to happen. So whoever's in power, if it's reform in power, it's going to happen. We're going to have to balance the books. The question is, what do we do next? And the welfare System Today it's 330 billion, end of the decade, 400 billion. The only way to deal with that is structural reform. I argue for crossbody party structure reform because I think this is too big an issue to shoulder for one party and we really need to be thinking about the country, not about politics, and work out how over a period of time we transition people's reliance on welfare. It's not right to stop that overnight. We need a transitionary period, which might be five or 10 years, to get the country into a better position. That includes thinking ahead around things like sovereign wealth funds and creating long term pension liabilities off the books. These are not simple things to fix because today 175 billion of that number is pensions.
And that's a combination of triple lock being a political ball that everyone's used that we can't afford. And it's things like unfunded state pensions and final salary pensions in the government where we're underpaying our civil servants or underpaying our public sector workers in lieu of a final salary pension. And what we need to do is rebalance that with higher salaries and, and a defined benefits pension scheme. So these are really complicated issues to fix. And that's why I say I think it needs cross party support. You won't be surprised to say I'm lucky again to meet not just the current government, but other people from the opposition. There's cynicism whenever you mention that because they want their own political message. But I really firmly believe this is a structural problem the country has and it needs more than a governing party to try and get behind it.
[00:28:01] Speaker A: You're not tempted to stand for Metro mayor somewhere?
[00:28:03] Speaker C: No, no. It's too complicated a world for me.
Happy to comment on the sidelines.
[00:28:10] Speaker A: Just in terms of LinkedIn, like I mentioned, you know, I like LinkedIn. It's the only social platform that I really immerse myself in. And Jonathan to my left here as well, he's very good at it and gets lots of engagement as well.
How important is it for leaders to be visible in terms of on social media platforms? What's your take on it? Because not everyone is.
[00:28:31] Speaker D: Yeah, no, I think shouldn't. First of all, it's a peer to peer network.
[00:28:35] Speaker C: So it's not a company to company network. It's an individual working in a company talking to another individual in another company. I think businesses often get Confused under
[00:28:44] Speaker B: your own people as well.
[00:28:45] Speaker D: Yeah, and your own people. So I find it an incredibly valuable tool. I was a real naysayer until two years ago. I saw it as an environment where I was just asked for things rather than I was perhaps promoting things. And when you change your mindset to
[00:29:00] Speaker C: say this is about a communication tool, as you rightly say, Jonathan, to your people and also to the people that you're trying to influence, it is by far the most powerful business tool that I know of to do that in a company. And I'm advocating this today in scc, our main trading company, which doesn't particularly have, if you like, personalities on LinkedIn, it really needs, in a big business like A and M or a big business like ours, it really needs a suite of people to be delivering messages. You need to be acting in some kind of coordinated way so that you're
[00:29:31] Speaker D: not crossing over each other.
[00:29:33] Speaker C: So as with anything else in life on a comms basis, it needs a strategy and probably needs investment and certainly we're doing both of those things. It also requires people to think and I find actually when you, you know, when you start.
I didn't discover writing until three years ago and I thoroughly enjoy writing now and lucky to have a column in the Times Monthly, but actually it's really cathartic. It's really important to form your thoughts and the more you think logically about what you're trying to say and what your business is trying to deliver to your customers or your other stakeholders, it's a really powerful tool.
[00:30:08] Speaker A: What's your approach to it?
[00:30:09] Speaker B: Yeah, so I was the same. I'd never really used it. I saw. I sort of had seen it, but I didn't really use it until I spent a year in the garden and I happened to make a few posts. I thought, people wonder where I've gone. And so I happened to make a couple of posts that went.
Got much greater. 200,000 people read the first one, apparently.
So I thought, oh gosh, people are engaging with me.
And so I started at A and M. We looked quite carefully brand building because obviously one of the things we've been doing in our corporate finance business is brand building.
And it seems that people don't really buy in that type of media. People don't really buy into companies telling them things as opposed to people.
But actually if you can build a sort of relationship with the people who are following you, I suppose you build a personal brand. And, and I've certainly just.
I'm no expert in LinkedIn, but I certainly notice a lot of the people I meet, who I've never met before have followed me and read things on LinkedIn and they know where I've been. And so I think it's a great way to communicate, but you just have to be careful because obviously you are communicating to a lot of people. So you need to think about it.
[00:31:32] Speaker C: You need to think about it.
[00:31:34] Speaker A: Yeah, listen, it's absolutely fascinating. I could talk about AI and LinkedIn for the rest of the day, but I know people have got places to go to, so massive. Thank you to you, Steve. We're going to go for a quick break. When we come back, Jonathan and I will be reflecting on this interview and also answering your reader and listener questions.
[00:31:51] Speaker B: Thanks, Steve. That was really, really interesting. Thank you.
[00:31:54] Speaker C: Thank you.
[00:31:58] Speaker A: Welcome back to the second half of the Dealmaker Uncut podcast. We've just interviewed Steve Rigby of the Rigby Group. What do you think, Jonathan?
[00:32:05] Speaker B: Well, I just thought that was a fascinating interview. Obviously Steve is a second generation leader of that family business, but they seem to be pretty united in their strategy. He's really well connected.
They've got some great businesses within their group.
He talked about some of the investments that they've got as well.
And obviously he's got some strong and relevant views on public policy as well. I just thought that was a really interesting interview.
[00:32:36] Speaker A: Yeah, I think he's quite sort of clinical in his thought process in terms of he's not driven by sentiment, but he's also, you know, admits where I think they've made mistakes.
Obviously AI is the big thing as well. He's across everything. The one thing that struck me is literally you could ask him a question on anything. I think I could ask him a question on a price of cream cheese and he would know what the current sale price was.
And you can see why he's such so much in demand now as a public speaker within the media. But I'm a big advocate, as you know, of LinkedIn. And when you get somebody like Steve Rigby talks about the fact that really he's cottoned onto it three years ago because it's not just communicating to the outside world, it's communicating to your staff as well. And it's peer to peer. So now I thought Steve Rigby was a fascinating guy as well, who's across the detail. So this final section of the podcast is when we ask you you questions from our readers and our listeners. This is called Ask Jonathan and there's some good questions today. Actually, the first question is going to test Your knowledge, how are the higher for longer interest rates continuing to reshape M and A valuations and deal structures in 2026? You just touched on the fact actually that all the expectation was that interest rates were going to come down and then we had the Iran war and they've stayed as they are.
So what impact is that having on deal prices, M and A activity generally?
[00:34:02] Speaker B: Yeah, so I mean, inevitably higher interest rates make the M and A arena more difficult. I think one of the things that we touched on in the earlier session is the private credit markets are starting to become a bit less liquid as well. So I think the combination of the availability of credit and the additional cost of debt are bound to make some people more cautious in the M and A market.
[00:34:33] Speaker A: Next question relates to something you posted on LinkedIn actually, which was you talking about. At what point, if you're selling your business, do you go from a virtual Zoom or Teams call to a face to face call? I mean, if you looked at your activity, how many people would you meet face to face at what stage in the journey and how many would you just meet for a quick 15 minute chat over?
[00:34:55] Speaker B: Yeah, this question about teams meetings and Zoom meetings is interesting, isn't it? Because until Covid, we didn't really talk about this.
Almost every meeting was either face to face or it was a phone call.
It was only really during COVID when almost immediately, out of nowhere, Teams and Zoom appeared and almost the entire business world was operating on, on teams. And I remember getting the first deal done when we'd literally never met anybody involved in the deal. It was an entirely virtual deal that had been conducted from pitch through to completion on teams with both the client and with the buyer. Now, thankfully, it's not that bad anymore.
The point, the article you're referring to that I said was what I personally found was that when, you know, before, before COVID we pitch in real life and most of the pitches that, that I would be involved in, we would, we would expect to win. We wouldn't win all of them, but we'd win a lot of them.
But what I found that once we were pitching on teams and it was all virtual, success rate went a lot, went down a lot.
And then post Covid, when we're back in real life again, it's gone up again.
And I just find personally it's a lot easier to engage with people, to build empathy and to have authentic conversations in real life and it's just harder to do that on teams. So there's a place for teams for quick check ins and conversations that can't be arranged in real life. But personally I would err if I needed to. If I'm building a relationship with a client, if I'm pitching, if I've got difficult conversations with with staff or with counterparties to a deal, I'd prefer to do them in real life if I could. That's just my preference.
[00:36:54] Speaker A: Before I ask the final question, I'd like to give the case for the other side of AI because I think it's only fair. But I've been contacted recently, invited to attend an event, and I've been invited by an agent. It's all AI driven. There's no human interaction there at all. And I found the whole process impersonal. It lacks detail, it lacks details of speakers, it lacks details of venue, it lacks details of time.
But and actually when they're trying to sell it to us, it just lacks any empathy.
That's the other side of AI. AI isn't going to be the solution to everybody if it's too generalist.
Last question about AI is are AI driven due diligence tools reducing deal completion times? You mentioned this earlier.
[00:37:39] Speaker B: So the AI enhances and the quality of analysis that's been done. So in lots of ways I can see that due diligence is enhanced by AI.
I've not noticed deal completion times reducing at all. I mean, that might be as much to do with the uncertainty that's around in the market at the moment.
What I would say is that on almost every deal now there will be an AI due diligence exercise done.
And in some regards, the presence of AI in the business is increasing the amount of due diligence that needs to be done.
So while AI tools might bring some efficiencies, the whole area of AI is requiring more analysis than ever.
[00:38:28] Speaker A: Well, I'm now going to go for a sandwich which is prepared by AI and I'm going to have a drink which will no doubt be poured by AI as well, such as the rate of change. But that's all for this episode of the Dealmaker Uncut podcast powered by by Alva Marcel Massive. Thank you to you as always, Jonathan.
[00:38:46] Speaker B: Thanks Chris.
[00:38:46] Speaker A: Okay, AI free. Don't forget to subscribe to the podcast, tell your friends and family and follow us on social media. That's the Dealmaker Uncut podcast by Alvarez and Marcel.
