Global Acquisitions with Graeme Carling

Good day, fellow deal makers. Welcome to the deal. Scout. Hey. We have a returning champion who's over across the pond who's doing global acquisitions, and he's going to come share some insights on how to buy companies, service based companies with 100% seller financing. There are great opportunities in the market what's going on in the economy to buy companies and buy them at values. So we're bringing our friend. Where are you? At Graham. 

 Well, I'm currently in Dubai, but most of our businesses are in the UK and Europe. 

 Okay. So Graham from over there. It's going to come share some knowledge and wisdom with us on The Deal Scout. So, Graham, welcome back to the deal. Scout. 

 Thank you, Josh. Good to see you again. 

 Yeah. All right. You're flying all over UK and you're doing deals in Spain and Dubai and all these places. Talk to us about some of the things that you guys are focusing on. 

 Well, currently we're focusing on our main businesses are in healthcare and building services in the renewables and green and decarbonisation sector. So not traditional building or construction. We don't really get involved in that, but really? Well, there's a specialty specialism that's the two key businesses for us at the moment, health care and buildings. Yeah. 

 You go in and you take a look at these organizations and the goal is to buy them and to roll them up into your holding company and operate them and grow them. Is that right? Is that your business model right? 

 Yes. 

 Let's start with square one. How did you choose those industries and those niches to focus on? 

 Well, I think my health care is almost a no brainer. People living longer, everything about that. Globally it's a global business for us, good margins in that business. For us, it's a sector that it's just attractive. It's pretty easy to fund that dial with bank financing, anything with a white coat, it's easier to fund. That's one of the main areas in terms of the healthcare sector, there's a wide range in there. It can be dentistry, care homes, care pharmacies, pharmaceutical stuff. It's a full range within that sector. So it's a massive sector. But really for us It's great margin. It's one that's very attractive for us. So the money flows into it. Again, we just go with the money flows. In terms of the green and renewable similar, we believe that green is the new digital. If you live with the changes and climate change, the rules that are coming into play, some are already into play, forcing the transition into greener energies and cleaner, greener and more energy efficient buildings. 

 Again, the money is flowing into that location because it's an emerging market. There are no real massive dominant players in that sector yet. We feel that if we can bring together a bunch of well run, well managed, good, well established regional operators to geographically that we can pull them together, offering a range of services in the Sector, we think we can really be a credible player in the market. And that's the plan. 

 Yeah, this kind of sounds like studying live Pena on acquisitions. This kind of sounds like a penny move where you go into an emerging market, something new, a lot of chaos, but you have the ability to pull together into. That a path that you guys have learned through and follow or do you have opposition to what they teach? What are your thoughts? 

 Well, you know, that's one way. It's definitely one way. The payday model is very much fragmented markets where you can consolidate it and you can have it just by getting skill. The value of the business at the end of the meeting ID greater because of the size of the business revenue that you've created. So that's definitely one model. I think you can do that in just traditional sectors though. It doesn't have to be too much of an emerging market. It could just be a traditional sector where we are seeing on the green energy of the clean energy decarbonisation of buildings. That is a fragmented market. It also offers an additional value, we feel at the end by being one of the first players of a good scale, offering the full range of services where you can capitalize on the money flowing into the government contracts that are coming out because we have targets to meet, so we see additional value in that rather than just arbitrage play on revenue. 

 And. 

 You guys are looking at a health care company, which I love health care for this reason, in terms of business, maybe the fundamentals of this, people want to live longer, right? People don't want to die, so they're highly motivated. When they need something to pay it, they'll find ways to pay or to make it. When the government gets all this messy, so there's mess and high motivation. You guys are looking at a healthcare target, you mentioned a potential deal in the US that you guys are actually looking at live. What's? 

 Live? 

 The perfect deal. Where it's live? Maybe not too small, not too big, but it's just like right in your sweet spot. How do you look at that? 

 Yeah, well, we look at Dante, for example. We don't buy I San Josh and more businesses, more and pop businesses find if there's maybe half a dozen employees, it's maybe turn over a million dollars or a million. There's a threshold there that we kind of don't go below because it's difficult, even though there is a big market for that through our experience buying them too small, it creates problems in terms of time and management and all that stuff. That is hugely underestimated by a lot of people looking at doing acquisitions. We've learnt the hard way on that one. We have criteria in terms of the management, who's going to manage it, and they're capable of managing it going forward. It will depend on the number of employees. General meeting under half of this employees, it doesn't really work for us. I suppose the threshold is anything less than a million dollars or euros. 

 It kind of is too small on that basis, even though there are some good deals to be had, which is too small. 

 Yeah. You said you've learned this the hard way, which anytime someone says something like that, I want to know, what did you learn? Right. When you buy too small, it becomes a management issue that now you have to go do the work. Right. Team Chat was some of the early mistakes that you guys have made with maybe buying too small. Give us an example. 

 We bought some businesses where we've maybe been approached capital level. The business would be too small, doesn't fit our criteria, but would make a good if you live plug in or addition to one of our existing entities. What you're doing, okay, it doesn't fit us. It's not for us, but maybe one of our businesses, it would fit them and it would be a good add on and they've got good. The guys understand the industry and the sector's business, it just doesn't fit our criteria. Almost every one of them we've had problems with on a plugin. We say, okay, we'll just fit it in or just slot in, almost every one of them has been hard going. Not just on the financial aspect of it, but in the team management and the management of it just each time. The smaller ones, if you're starting out and you need to get in the game, fine, go for it. 

 There is a real part of these acquisition thing that's underestimated and it's the management of these businesses going forward. For us, the most successful ones we've had have been where the scale maybe got 3400 employees, management team, set ups and all that stuff. We have very little, there's very little requirement for us other than assisting them with the growth of the business day to day. We just are not part of any of it. So the guys understand what to do. They've been the ones that have been the most successful for us and the ones we've had. The biggest problems have been either at the smaller end or in the distressed sector. Again, that's another one where we've learnt the hard way in terms of buying distressed businesses. It's not really what we do not do that. 

 Yeah, it eats time is what I heard. You and I only have a limited amount of time and even if we are hard, really working around the clock, we got to sleep, we got to have time for our family, we got to have time for ourselves. Right, because you're doing international deals and running around the clock. It's 05:00 where you are now, it's 09:00 where I am. How do you manage all that while buying all these companies and give an idea of how many companies you own now? Since. 

 I don't know many, we've got 20 odds, something like that, and all various shapes and sizes, so maybe more than that, actually. We have a good team of people and that's critical when you're going from small business to big business. I may have said this before, you're going from I to we. We have a good team with people based in these countries that allow us effectively to operate almost around the clock. We are here in Dubai, 3 hours ahead of the UK. We've done at the gym and I've done a lot of things before. The UK is waking ups, so actually works being a head of the game, whereas if were in the US, you're kind of chasing the day based on where our businesses are. What for us in this side of the clock rather than the other way, but we partner with people that are good and understand that local area and can operate in post time zones. 

 I think for us, new York, our team of people, but our group of board of team, we are all, if you like workaholics, but we love it. We all love it. So it's not like nobody's thinking anything. I work with my wife, so we flew back to UK last night. We're here in Dubai. We just make it work and we've just always done it. Josh so it's not something we consciously this about some things we do, some this stop, we miss this activity, we're going to give you that. Even our kids, they've only known hard work and traveling and ups and downs. That's it. 

 This is so cool as a leader, and I know we're going to get more into deals and such, but when I speak with a leader, I want to learn myself. There's other deal makers out there who want to learn how to grow into leadership. You are now responsible for hundreds of people, hundreds of families, right. If you extend on that, how many kids do they have? That's a heavy burden that you carry on your shoulder. Do you ever run into a situation where you're stressed out, maxed out, where you just want to just turn off your brain for a few days and release that stress? 

 Yeah, but I this you do get out from time to time. A lot of people would be able to cope with that burden. You need to be a certain character. You need a broad shoulders, but it's not something we consciously is there every day in the front of mine, it's always there. I drove into one of our businesses yesterday, I couldn't get parked in the car park. I'm thinking, wow, all these new cars, all the employees that work there, I'm going, wow, what we're doing and what we're creating, it's other people's families and wealth and livelihoods. Now and again, you get this, but otherwise we're too busy just running towards the gun file and just keep going. 

 I get it, man. Now, we're not at the scale that you guys are, but you've got all day long. People are depending on you, right? You could build teams and man, we're working on that so hard, building teams and people who can then take the burdens of certain things. You go home and you want to be a good husband or a good father, and you got other responsibilities, and then your church is calling you or the school's calling you, asking you for money or asking you to raise money, right? 

 Yeah. 

 A lot of stuff when you're going through this, is this something that you said, it's a certain character, right. Broad shoulders and such like that, are there things that, as you're going through, becoming a better leader, are there things that you're focusing on, how to level up your leadership skills? What are you doing to intentionally do that? 

 Yeah, I mean, we've done some fundamental. We make conscious decisions to continue meeting and test ourselves, see who will respond. You never second guess yourself how you're going to act or behave in certain circumstances. But for us, we moved to Dubai. We want to grow our business. We want to be international business people. That was with you? We took our family and we wanted to be in a different environment. Environment stronger. Ian Hill. We base in Scotland. We kind of got to a certain point. It was not big steps. How are we going to grow from here? We were kind of needed to live in a place or be around people that have the same ambitions as us. I think over the last 18 months, we've really worked on that. We are now operating with people that are miles ahead of us. The conversations that we have with those guys, it's just inspiring. 

 It gets the blood flowing rather than kind of where were. It was getting a bit depressing and were getting everywhere or the people you were talking to, the one level that we wanted to be at. Were kind of negatively processed, if you like. We needed to break out of that. Don't get me wrong, we still have the day to day challenges every day. I think for us to grow and how our business is growing, we really need to do a big shift and otherwise it still just be kind of going in circles. 

 I thought, yeah, I live in a small town called Ocala, which is in central Florida, and I started building a fitness technology company back in 2012. Nobody in my area knew about building a fitness technology company or working in venture capital. I had to move my family to different areas to learn stuff because live in Dallas, Texas, there's VC group and there's angel groups and there's big tech groups and such like that. So, like you, I had to expand my network and be inspired by people who are doing something much greater than me. Now I'm bringing it back and we're growing that here. For me, that was vital because I'm the kind of guy that I have to see it to understand it and then I could believe it. Interviewing you, I'm like, okay, I can do that because you inspire me, right. I appreciate you doing that for me. 

 Thank you. As you're growing building, one of the topics that you wrote about in the show Notes was 100% seller finance. We approach a group, you and I were working on a deal together and we approached a company and we're like, let's see if we can scoop this up with seller finance. How do you do that? How do you approach that conversation? Because that's not a traditional way of thinking, right? Like, hey, I'm going to buy your company. You're going to finance it for me. How do you approach that? 

 Well, I think it's certainly not a traditional way of doing things in Scotland or the UK or Europe, but it is more so accepted that we've seen in the US. When we've looked at some investment material, they'll quite happily say seller finance available, or parts of finance available. We wouldn't see anything like that in the UK when we started buying our building and buying our businesses. It truly was an alien concept and is still, to some extent, I think it depends really on it depends on the deal, it depends on the circumstances. You go back to motivated sellers, you go back to is there an impending event? What's the situation of the seller? For us, our starting point in terms of when we're looking at the financial will always be, can this be 100% seller by? We might not bring that out until we later on down the road. 

 In terms of that, in our mindset, can this be done? There an opportunity for that to be done? If we hit the seller with that straight away, we wouldn't get anywhere. There's a process that we go through, it's a filter that we go through that picture criteria, then you've almost got a secondary filter. It possible then, is this an option on a sale of finance? What could happen is anything can happen during the diligence stage or through the discussions that open up an opportunity or open up the opportunity to have that conversation regarding seller finance. It really just does depend on the circumstances of the deal, on the seller and what they're looking to get out of it. For us, maybe the bank, went to the bank, we don't really have an app flofr that sector at the moment. We go back to the sale and tell them that, then all of a sudden they come up with certain solutions. 

 Okay, how about if we do age? Would that work for you? During the process of it, rather than hitting them straight away? We want 100% sell finance on this. Some people run flofr the hills. 

 Yeah. What I like about this is in your conversation, you guys are having a conversation on your side. You're going through an acquisition process, you have a process that you're approaching this and then they're a motivated seller. If the process fails, at some point they're coming up with some solutions. What if we financed it? What if we worked our way out of this? Right, yeah. 

 Cool. I think what's important, and that's why it goes back to 101, you need to find motivated sellers. If you're trying to twist people's arms, it's a hard one, very difficult. Normally, if you're so desperate to do the deal in the seller, isn't, then normally these conversations, these opportunities during the dialogue don't appear that much. They are not there, but on a motivated seller. Absolutely. That's why your filter, you're dealing with the deals themselves are crucial. The numbers games and making sure that you get that as quickly as you can to the motivated sellers. It's what you guys do, you guys in the deal flofr, you know that. Yeah. 

 Here's some signs that we see where there's a motivated seller. These are things that we look at that kind of stir up. This is a motivated seller versus a nonmotivated seller. Right. You'll have these nonmotivated sellers where they're not responding to your emails. They're kind of ghosting you. They're just not interested even talking about it. They might jump on a call to be nice, but those waste time. We find that when people are getting older, they don't have a succession plan. Maybe they're going through a health issue or financial issue now they want to talk and they're leaning into you as much as you're leaning into them. Right. What are some signs that you've seen on how to identify even from the outside looking in? What are some signs and signals of finding a motivated seller? 

 Well, what you just said there is absolutely what we see when we're looking, when we operate. We're going hunting, so we don't normally buy through traditional sales agents. We go hunting. We have some technology that allows us to filter heavily. Really cracking piece of kit that we work with that gives us, if the sellers want a contract recently, the age of the directors, how long they've been in director, actually it links into this social media they can link this social media activities to see it doesn't say specifically health issues, but if there's a motivation, if they've liked something. It really profiles not just only the business, which is great, but the actual owners of the business. In the 60s, have you got any kids in the business? All of that stuff so you can get right. Really detailed. Because the ideal seller for us is someone early sixty s. 

 The kids have no interest in the business. They don't have any and there's maybe three or four of them and then they look at an exit, so they have an impending event. We like that we live those people because they are then motivated and they maybe haven't really thought about the exit. They're just going on. We go knock on the door, by the way, is this something have you thought about an exit? You guys? You just plant the seed and take it from there. Dial seller is that age group or there's maybe one a contractor lost a contract. We dig into that information to find that the personalities involved in it because we don't want to waste time. There's no point. I was trying to twist people's arms to sell the business because it makes the dial a lot tougher. 

 Yeah, this doesn't. Have to be like a leverage buyout or a hostile takeover. Right. This is a motivated seller with a motivated buyer, and it's a good deal for everyone. I live these conversations about a mutually beneficial buy, right? 

 Yeah. 

 A good deal for both parties. Now, when you're talking with them and why would someone sell to you rather than sell to another group? What's your value proposition? Where a seller who cares about his employees and the legacy of his business, why would they choose you guys? 

 We do make a big point to that. I think in terms of we don't interfere a lot in terms of operation, day to day operations. We are there to support and help and assist and grow the business. We have different a real hardcore private equity model, if you like. In that sense, we touch. So we want continuity in the business. We want to retain where we can the existing management team and support them and growth and give them opportunities through our group. If somebody wants to move to Dubai, for example, from the UK, we talk about what the soft stuff that's important. We talk about what we're trying to create and achieve. I think, listen, when you get down to the hard nuts and bolts of it, though, a lot of it down to what's the deal? What's the deal, what's the cash, what's in it for me? 

 As much as the sellers can give it. I've worked with these guys for 40 years. The bottom line is they're selling, they're leaving them, they're going, and that decision has been made. There might be a connect, there might be a bit of going through that process for a short while, but when you come up with it with a good deal, generally that we can get it done as well. It's the deal and a lot of the soft stuff and it's relationship built up over a number of we get to know these people over and we keep in touch with them over a number of weeks and months going through the process. Yeah. 

 For groups that you're a light touch, you're focused on growth. You don't want distressed, right? 

 No. 

 You either want plateau or growth, and you want to help someone take that trajectory. Maybe at 60 something years old, they're just tired or lacking motivation, or they want to go spend more time with family or the grandkids or travel . You could come in as strategic to help them grow. 

 I'm sure that's interesting. 

 What is your favorite part of all the business deals that you're doing? You're running companies, you're buying stuff, you're traveling, you're doing a bunch of stuff. What's your favorite aspect of the business? 

 My favorite aspect is buying the businesses. I like not better than selling the businesses. I don't know why. I just love buying businesses. I like going getting underneath the hood if you like. I like seeing what they're about, meeting the people, learning new things about them, seeing the opportunity. I think the one this that we do have, probably the one of my strengths is identifying seeing opportunity and acting upon it so we can see value and we can see where we can create value and seeing that through and structuring the deals to get us to get it. That's why I don't like running the companies at all. I do not like it. There are people far Peter skilled and just better at it than me. That's not what I do. We identify opportunities and act upon it. I think that's it really, that sounds simple, but it is. 

 In whatever sector or industry or you are going that way today, the wind changes direction. We need to move over there because it does huge scope of opportunity over there. That's what I enjoy. I enjoy that part of it. 

 Yeah. Sometimes I have to get out of my head because I love the deal. I love closing a deal. I love business development, I love hunting, I enjoy meeting people. Right. I love that. I do not like the management, I do not like systems, processes, the operations needed. There's people out there who love doing that. For me is getting that out of my head and releasing the control. Now, you have scaled to a tremendous milestone. Was that hard for you to release control when you were first getting started? 

 Yeah, absolutely was. I think it's still even difficult for my wife, who enjoys the operational part of it. The thing was when were starting a business, small business, you are everything we have operations with, all of it cleaner. Actually, we're pretty good at it as well. We're pretty good at operational meeting. We're relentless. We were on it. You're always kind of when you introduce new people, then maybe just don't do it the way you need it done or want it done and all of that stuff. So that was a difficult process. I think the bigger you get, it's not possible to do it, so it's easier. It's not possible for us to manage our businesses. We manage the group of companies. It's not possible for us to manage the businesses. I think one of the things as well is because were so involved early on, it's difficult for others to think that we are not involved in the operational aspect where we don't know. 

 I could not tell you what goes on day to day level in my business. I would not be doing my job if I was in there doing their job. It became easier, but it was difficult because it's like handing over your baby, as to someone else. 

 That takes a level of trust, faith. It takes a level of like, all right, I don't know what's going to happen here, but it's got to get off my plate. You could yes you could have KPIs and check ins to make sure that there's accountability to make sure but at some point you got to have faith that it's going to do something without you. 

 Yeah. 

 Talk to us about the first time you did that on a big level and what was going through your mind? 

 Well I think I can't remember the first thing but what I can tell you is how we've seen both sides of that, where we have been majorly let down, where we have we see one of our strengths is loyalty but it's also one of our biggest weaknesses as well as loyalty where the only way we trust somebody is to trust them until something happens. But that's it. Otherwise you never trust anyone. We say, well if we want to really scale our businesses and grow our group of businesses we have to believe and trusting people and allow them to get on and do what we hope and want them and need them to do. We've been let down, we have been heavily let down where things just weren't sold. On the other side we've got some fantastic people that work for us that we don't even need to say anything, we just know and they're doing everything they can in the best interest of the business and the businesses of others themselves. 

 So there's a real mix. There has been a real mixed bag and I think you're gutted when you're let down where people are telling you something that wasn't so and it comes back to bite you. Yeah, it really is. It's like a knife in the belly, it's gutting but that can't stop and it can't pick you off trusting others as well. It's just live. What do we learn? Okay. If we're going to continue growing our businesses, we need to prepare ourselves. That can happen again. 

 Yeah, it's so true. The thing that hurts me the most, like I built businesses, I've lost money, I've been bankrupt, live. I've gone through the hardships of business and I've seen the other side of good growth and stuff. The hardest thing for me was when I felt betrayed or I felt like someone let me down or someone did follow through or someone burnt me or stole from me that was injuring yeah but my purpose drives me to try and get back in there and try again. That's hard though sometimes. Yeah. How do you after experiencing that because you have hundreds of mouths and bodies, how do you get back in after getting burnt? How do you not go negative on people? 

 Difficult, it's difficult in the short term times, a great dial on these things but you have to keep your eye on the big picture, you have to keep your eye on the price and say well there are going to be ups and downs, there's going to be twists and turns. Ian hill of this. The reality is business is a blood spot. That's where it is. If you don't have the stomach flofr it and people are going to let you down and upset, then maybe you should be in business. Maybe you should be working for a local government or something for Live, because it's hard, it's not easy. You've got the emotional part of it and we have been and my wife, for her, grudges are not just for Christmas. It takes longer to get over certain things than me because you get hotmail. It's a very emotional thing. 

 Again, you just got to go through the process. Ultimately, if you keep around the price, I think that's the this, it keeps us saying, look, come on, right? If we're going to grow, we're going to develop. We've got to be tablet to cope with these things. Yeah. 

 Now you and wife are running the family business, running the family organization, and you guys are partners, right? 

 Yeah. 

 What is one of her greatest strengths? Here's an opportunity, Graham, because you're my friend. Here's an opportunity to get some major brownie points from the wife, if she ever listens to this. What's your favorite thing about her in business? 

 She is resilient beyond belief. She is truly resilient. She will be on the front foot constantly. She will say to me, if I'm about feeling a bit down or maybe feeling sorry for myself or let my dog shut ups, let's get back on it and let's get going again. She's a real motivating tough in that respect. For me, that I like that because there's no days off, there's no time off, there's no meeting. Sorry for yourself, if what I mean. She comes up, she will always come up and make sure I come up and make sure kids come up and there's no slacking. I really admire that about her. We've got a job to get done. Come on, let's go. 

 It sounds like you married up. Sounds like you did good for yourself, man. Congratulations. So, Graham, let's do this as you are. We had a few conversations and you guys get a crazy amount of deal flow for businesses and for opportunities and for groups out there who are interested in having a conversation with you or maybe even exploring taking some of your businesses that aren't a good fit for you. 

 Live. 

 What's a good place for people to connect with you and your team? You got an awesome team, by the way. I love those guys over there. What's a good way for them to connect with you and do a deal? 

 Yeah, well, I mean, the easiest thing is to go to the website United Capital Co. UK and to send in any inquiry there or the guy that picks up most of the stuff for us in terms of first line of inquiries is Fraser Kirk at United Capital Co. He's the guy, but, yeah, we are at this moment in time, our pipeline is huge, the opportunities out there currently in the UK and Europe are huge and we have a heavy filter for what we will buy. Certainly anyone looking to potentially buy businesses in those countries, we'd be happy to talk to them and see if we can assist them in any way in achieving that. 

 Very cool. During this interview, are there any questions that I should have asked you that I screwed up and did not ask you? 

 I think we've covered quite a bit there, Josh. I think maybe just the one thing is the current environment in terms of the funding and financing and all of that. What we'll see certainly in terms of that element of the funding market in the UK, will see there are certain sectors where there's a lot more appetite from the banks than others. There is a real nervousness, obviously, around everything with inflation and all that stuff, but what we are saying is there are still some fantastic deals getting done at the moment, irrespective of everything else that's going on out there in the world, there are some fantastic deals going on. We're getting chased. Even before I came on the show today, we're getting chased. Flofr guys, can you have a look at them, please? Despite all the issues and problems and fear, yeah, deals are getting done. 

 Deals are getting done and deals will get done. If you look through any down shift in CRE marketing for the last 200 years, right, anytime, there's the downshift. The people who keep their head down, focus and do deals, they come out on the other end better than when they got in there's. Value buys. When people are scared and fearful, you could find good opportunities. So I love that. Great point, because as capital markets, yes, you should pay attention to fear and let it be a KPI or like a metric in your head, but you got to keep moving forward. 

 Yeah, right? Absolutely. 

 Super cool. Thank you, Graham, so much for sharing that. Give a shout out to Fraser when you see him. Tell him Josh says hello. The team over there, so let's do this. Fellow deal makers, thanks for listening into this episode with Graham and myself, as always, reach out to our guests and say, hey, I want to do a. 

 Deal with you guys. 

 I'm looking at something over the UK or Spain or all those other places that you guys are doing business and reach out to them and say, I heard you on the Deal scout, let's do a deal together. Mission and purpose of the show, put deals and deal makers together. If you have a deal that you would like to talk about here on the show, we talk about all sorts of deals. Ecommerce, lemonade stands, SPAC and everything in between those head over to thedealscout.com fill out a quick form and we could talk about your deal here on the show. Till then, we'll talk to you all on the next episode. See you guys.