Episode 19: The hard truth about women in deal-making

0:01Chris Maguire: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 Avariz and Marcel Corporate Finance and me, Chris Maguire, Executive Editor at Business Cloud.

0:26Chris Maguire: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 dealmaker himself, Jonathan Boyers. Jonathan's been involved in deals totaling billions of 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.

0:50Ruth Percival:Thanks Chris, great to be here, very excited about today's session.

0:54Chris Maguire:I can feel it in your voice. This is a podcast that gets you inside the deal. So in the first part of today's show, we're going to be interviewing our special guest. After that, we'll have a little break and in part two, Jonathan will be leaning on his 35 plus years of working in corporate finance to answer listener questions. Jonathan, you know our special guest better than most. Who are we speaking to today?

1:15Ruth Percival:Well today Chris we're speaking to Ruth Percival. So Ruth is the founder and CEO of Contolo Group which is one of the more interesting buy and build platforms in the mid-market at the moment operating in the cost management and M &E consulting sector. Ruth's overseen five acquisitions in less than 18 months and she's got several more in the pipeline and from a standing start Contolo's grown to a turnover of 35 million and 230 people. Ruth is smart, intelligent and beautiful and I'm proud to say she's also my wife. Hi Ruth.

1:55Jonathan Boyers:Hi Jonathan. Hello Chris, lovely to be here.

1:58Chris Maguire:Just a full disclosure, Jonathan's never described any other guests as being beautiful, smart and intelligent and they all are as well.

2:06Jonathan Boyers:I'm very pleased to hear that.

2:07Chris Maguire:Yeah absolutely yeah I think only Jonathan Boyes would introduce you as a CEO of Contolo Group before mentioning the fact that you're also his wife.

2:15Jonathan Boyers:He does get his priorities right occasionally.

2:17Chris Maguire:Okay, good news, that's good news. So Ruth, as well as sharing my birthday of May the 9th, you've had an eventful career. Before launching Contolo as well, you had more than 20 years working in M &A, but I know you best from your days at BDO, where you had a track record for advising clients, especially on buy and build strategies. Would that be a fair summary of your early career, Ruth?

2:36Jonathan Boyers:So I had an amazing career at BDO. There was a great team there, a really fabulous leadership team and they were really supportive of me. It's funny, at the time it didn't seem like a big deal but when I look back and realise I was the first female M &A partner they'd had at BDO and I don't think there were many, if any, in the north of England at the time. So they took a punt on me and I didn't realise they were doing that at the time and I look back and think it was fantastic. But it was a different era. The track through for women in senior positions in professional services was really difficult.

3:15Jonathan Boyers:I'd like to think some of those challenges that I faced then don't exist today. I hope there's less misogynism than there was then but I suspect a lot of the challenges for women in professional services are exactly the same. So from my perspective to succeed in professional services you need to be able to win work and it's very often a culture uh you know of playing golf or having a passion for sport lots of boozing with clients and other people and um if you and that can be really tough for a woman uh for a woman coming through i think for ladies you've got to perform out of your skin to compete with um quite an average male counterpart yeah okay

4:00Chris Maguire:get off the fence Ruth

4:02Ruth Percival:so I'll just add one thing because obviously I observed Ruth coming through to the partnership at BDO and it has informed how I view our business making sure that the gender balance is right and that females have an opportunity to progress properly and I've definitely been well informed and I learnt a lot from observing the way that Ruth went. Less than half a percent of the managing directors or partners in the investment banking community in the UK at the partner and director level are female and that is an astonishing statistic which really means that our industry needs to change.

4:50Chris Maguire:We were putting together a list last year and I was trying to get a list of female deal makers and there just aren't enough and they're right it was it was i mean it was it was almost embarrassing because you get people coming and join the profession but then they don't they don't continue through the partner level etc etc etc okay this is about your good self ruth so so you spent a couple years at ea technology but the bit of your career i want to talk to you about next is your time at the chief integration officer at a company called fisherwack group of companies where you ran a team of 150 a big company people might not realize what it does on the size of the scale of the business just tell us a bit about

5:27Jonathan Boyers:fishawack so fish fishawack is a medical communications business and latterly a marketing business as well and it served big pharmaceutical clients like astrazeneca gsk sanofi they'd grown to 1400 people by the time i joined them through acquisition so they'd done a buy and build in fact i'd advise them that's how i'd got to know them and they'd been a client of mine and they bought 17 businesses over a period of about 13 years so my role um was as I say chief integration officer which was quite a wide-ranging role so I did leave a lead a team of 150 they were sort of internal um people serving the rest of the business that think about digital editorial um videography that that kind of thing but I also did lots of work commercially and operationally so I spent a lot of time renegotiating pricing with all these large pharmaceutical clients which I've really enjoyed actually and then lots of operational integration so there if you think about harmonizing payrolls harmonizing pay and benefits rolling people onto the same the same platforms for managing projects and timesheets and that kind of thing that was really difficult so some of it went really well other things didn't go so well and it was quite a steep learning curve but I did form a really clear view of how I would love that to work which is the ethos I brought to Contolo and and that is really people and culture first I think if you can get people in the right frame of mind then the integration can be can run smoothly and

7:09Ruth Percival:be a lot less painful you were working at fisherwack as it happens i'd sold fisherwack to bridgepoint um i'd introduce you to them so i sold i sold fishwack to bridgepoint it went well for a couple of years didn't it profits were growing um and then the unexpectedly the founders left and there's a consequence following on from that then and you know several of the management team left again quite unexpectedly and so you found yourself looking for new opportunities and having to decide what to do with the rest of your career might just be worth talking about that period.

7:49Jonathan Boyers:Yeah it was a very humbling time for me and I was 49 I'd spent 20 odd years doing M &A and then And I'd made this what felt like a brave, possibly mad career swap to do. And I'd spent four years in commercial and operational roles. And I just didn't know what to do next. I thought I was unemployable, which I think is, speaking to you, Chris, is a sentiment you hear from lots of entrepreneurial founders. My father was dying as well. So in the end, it turned out to be serendipitous because I did actually get to spend quite a bit of time with him in his last few months, which I don't think I'd ever have done if I'd have been still going hell for leather working at Fisherwatt full time.

8:33Jonathan Boyers:So I guess stuff happens for a reason. My friend Oliver, who was one of the founders that you mentioned, he asked me, he was looking at what to do next, and he asked me to work with him just a few days a week looking for investment opportunities. And that turned out to be a bit of a lifeline because it gave me some focus and back into this sort of office environment, even if it's a few days a week so it helped me get my head back together and it turns out finding investment opportunities was really a lot more difficult than we thought but in the end probably after a year or so and quite a lot of work we came up with two viable projects Contolo as one of them and then we had another developing a healthcare offering and I focused most of my time on Contolo.

9:17Ruth Percival:So I know a bit about the journey obviously but I think listeners will be interested in hearing how you and Oliver went about sort of identifying the sector and identifying targets and just how you brought the Contolo opportunity together.

9:32Jonathan Boyers:I've already described FisherWax so it was a buy and build and it had been it had been back through multiple phases of growth by private equity and so we wanted to do decided we wanted to do that again so can we do another buy and build but we can't do it and didn't want to do it in medical communications. We want to be in professional services because we both understood professional services. So we looked for a sector with a highly fragmented market which means lots of small consultancies that are available to buy. There's lots of regulatory change going on in construction at the moment and has been for the last few years and that will continue.

10:14Jonathan Boyers:And there's also some big players who have been growing through M &A. So the concept of doing that isn't alien. It's not, you know, we're not creating some white elephant of trying something completely from scratch. There's other successful platforms, but they're doing it at a bigger scale. The thing that's, so Contolo is very much about bringing together the professional team within consultancy to the built environment. So if you think about what that professional team is, it's everybody from architects, cost managers, planners, quantity surveyors, mechanical electrical engineers, civil structural engineers.

10:52Jonathan Boyers:That's what you would consider the professional team. We've chosen to build strength and depth in cost and project management and mechanical and electrical engineering. And the reason for that is, firstly, it's probably the largest share of the wallet of that professional team. But it's also really exciting because you can, by bringing those two disciplines together, you can deliver ultra low carbon solutions for clients. So when you think about a client at the inception of a project and the advice they need navigating a really complicated world to bring down embedded carbon and operational carbon over the lifetime of their asset.

11:36Jonathan Boyers:They really want the engineers and the cost managers to be talking right at the beginning and giving them those options. And that's what we're doing at Contolo.

11:45Chris Maguire:to put you on the spot given that jonathan's background in corporate finance and deal making when you sit around the dinner table and you're talking about everything is jonathan a help or

11:55Jonathan Boyers:hindrance he's very helpful chris i don't know how you could ever doubt it so we talk we talk a lot about business and corporate finance in our home and several of our children are interested in in it too so it is a it's a regular topic of conversation I have sought Johnson's council all the way through this I wouldn't have done it without his support and backing in me it has to be said that it turns out taking actual advice from your husband in a formal setting is really very irritating so I did try that at the beginning and that didn't last very long so but we do I do

12:34Ruth Percival:rely heavily on on jonathan's council so we're both running businesses that are scaling up have been scaling up really quickly and you know got no got several hundred people from more modest starts so there's we have got a lot a lot of shared sort of things that we think we're wrestling with

12:51Chris Maguire:well that was an observation that i i sort of struck me really you know in terms of contolo you made uh five acquisitions i think in 13 months you got to 35 million turnover 230 staff if you look at what Jonathan's done since he joined Abraza Marcel it's very very scaling growing very quickly, interests all over the world as well I just imagine what dinner's like in your house

13:15Ruth Percival:The only thing we talk about more than corporate finance are our new kittens

13:21Chris Maguire:Right, okay, well this is a different side of the Dealmaker Uncut podcast that our listeners have never heard before Talk about your buying bills strategy um you acquired five businesses your first acquisition was abacus a leading cost and project management consultancy and your second acquisition was a mechanical and electrical consultancy called is it pronounced tase tier tase yeah so can you talk us through the process of

13:45Jonathan Boyers:identifying acquisition targets we're looking for small regional consultancies um in in project and cost management and an m &a and and by that i mean anything from the smallest one we bought had 22 staff and the largest had 76 so if you think broadly 30 to 100 people that's our that's our target we want to be strong in sector because sector is really important to clients and it provides resilience to our business and ideally we want we want consultancies that are serving national clients often from a particular geography so we can make that we can really make the most of our expanded regional footprint.

14:26Jonathan Boyers:We've got 18 offices from Edinburgh all the way through England and down to Frankfurt, believe it or not. However, what I learned about integration at FISHWAC is that success of integration and bringing businesses together really depends on the attitude of your leadership team. So the most important thing for these acquisitions is we're seeking leaders with a growth mindset and what do I mean by that I mean they want growth for themselves personally and professionally professionally they're joining a leadership team with alongside me and they are helping form and deliver our strategy so we want them to still be really interested in the next step stage of their own career but we need them to want growth for their people and for their clients as well you get to see a lot when you're buying businesses So when you're engaging through and negotiating a transaction that can take anywhere from three months to 12 months sometime, you get to see people in a very personal way, actually.

15:33Jonathan Boyers:So you see what they're like when they're winning in this negotiation, what they're like when they're losing. Do they consult with the rest of the leadership team? Do they take advice? We want leaders who are worried about their team. So every business we brought into Contolo, the primary concern of that leadership team was very much what's going to happen to my staff? Are my team going to be OK? Is this a safe place for them to come? And have they got opportunity here? And I think it's really important while you're doing all of that to tell them the truth about what's going to happen. So you've got to be clear about integration and the challenges of it.

16:13Jonathan Boyers:all of the benefits and the exciting stuff that we can do together as well but also face into the difficult stuff and then you're letting people make a choice aren't you about whether they want to step into that and so far everybody has chosen chosen to do that with us so it's easy to find the business businesses it's harder to find the right people in order to to do the acquisitions it was

16:36Ruth Percival:necessary to raise some some funding and you raised quite a bit of money from private equity and the bank. You've ended up as an investee company of North Edge. One of the things I will often talk to my clients about is when they're thinking of doing a deal with a private equity house, it's not just the financial metrics of the deal, but it's also finding the right private equity investor for the situation. So I think it would be useful if you could talk about you know how you went about choosing North Edge and how that relationship has evolved?

17:15Jonathan Boyers:Personally I think your likely success lives or dies by who your partner is and even if the success financially doesn't the your enjoyment of the journey definitely will so I've seen firsthand the consequences of a bad fit at Fisherwatt and right now I'm enjoying the benefits of a good one. So what do I think it looks like? We have a no dickheads rule at Contolo, so that applies to leadership teams that we bring in, people that we employ, and it most definitely applies to your funding partners, both banking and private equity.

17:55Chris Maguire:Ruth, I'm just going to say one thing there, which is that I've spoken to about three female founders who are hugely successful, and they've all got a no dickheads policy. yeah and it's like there's a lot of them in the world you have to be quite uh you have to be quite discerning it's refreshing though to hear somebody say this is our policy because you there's no ambiguity about that is there no um anyway i interrupted you flow you spend a lot of time at work and you and business can be wonderfully pleasing and it can be really difficult so you

18:25Jonathan Boyers:need people that you trust and like you can have some fun with don't you and that's that's what That's what I mean. I think you have to recognise when you're choosing a private equity partner, even a banking partner, that the people you're building a relationship with through your fundraising process aren't necessarily the people that you'll be negotiating with when things get difficult. And so in my view, you have to evaluate that team all the way up the chain, particularly in a buy and build like mine, where you're going to have to pitch the investment committee reasonably regularly for follow-on money or simply consent to do a deal.

19:04Jonathan Boyers:And North Edge are consistent in the characteristics of their team from top to bottom. So that does make it much easier. And the chain of command is short there. So we have Liam May who sits on our board, who's now a partner. And our sponsoring partner was Ray Stanton. and they sit on the investment committee. They also know all the other characters there because actually once you're in, you're considered part of the family, which is actually a really nice thing. You've got all of their resources, which are considerable, at your disposal. And so if you're in a mess or something isn't going right, you need some help, they will help or they'll find somebody who can.