The State of the UK PE Deals Market - Tim Morris, UK CEO, DC Advisory

Hello, everyone, and welcome to the Pep Talks podcast. In this episode, we're back for our annual catch up with DC Advisory and their UK CEO, Tim Morris, and we'll be talking about the state of the UK PE deals market. It's been a turbulent six months shaped by conflict in the Middle East, a new government and the tax questions that come with it, and some tough questions running through software and AI. Tim helps us make sense of the effect this is having on PE deal activity, and most importantly, what it means for PE-backed leaders in portfolio businesses today. I hope you enjoy. Hello, everybody. Back for the next episode of Pep Talks Map of the Maze. Actually, we're not even called Map of the Maze anymore, are we? Yeah, I don't know. Private F2 Power. Power Talks podcast or the Pep Talks podcast. Probably something we should figure out, isn't it? We'll do it. We're doing some rebranding. And we're here in the city in a lovely room. We're in a beautiful boardroom with 15, 20 chairs around the table with our friend Tim Morris from DC Advisory. Hello, Tim. Hi, Sam. Hi, Richard. Good to see you both. Yeah, you too. Welcome. Thank you. We look forward to these chats because we have them twice a year, don't we, Tim? Officially twice a year. A lot more regularly, unofficially, but officially twice a year, we check in on the state of the market. So, you know, we're just. We're just going to talk now for half an hour, 40 minutes, get your view on what's happening and what the deal transaction activity is like with private equity and what the trends are. And I suppose when I was thinking about this earlier this week, you know, if our listeners backtrack through our episodes and listen to our episodes with you and with Richard over the years, I mean, it's just. I think every time we sort of start with bloody hell, you know, what's the last six months. There's another major geopolitical issue. More events or. More trauma. And this last six months, if we reflect back on it, I mean, there was. In January, there was no war or no conflicts in the Middle East. The SAS apocalypse hadn't happened yet. And we still had Keir Starmer. And now we have a new government. SAS apocalypse, maybe not, but, you know, it's still a very rocky sector and lots and lots of uncertainty driven through the conflicts in the Middle East and our friend. Donald Trump in the US. So I suppose our first question to you, Tim, is like this, it feels like this is just a new normal. Yeah, well, and it's just a different new normal. We were talking about that in November, you coming through, are we going to be optimistic about the new year? And of course we were, because that's everybody's job to be. And we are in a. Every client, every investor, every management team have got their heads around. That geopolitical events are always going to be happening. Whatever it is, I think you just, this is the environment we're in and you have to operate knowing that there's a level of uncertainty. And that's the only certainty is that there is uncertainty. SAS apocalypse, quite specific and AI, we've talked about AI for quite a while, but actually the pace of change and impact of Anthropic and ChatGPT is huge. And we talked about that. Yeah. We've talked about it an awful lot then with our clients in the pep talk, your pep talks members. But that is the new normal. And we are in an environment where everybody's got to work within that and work out how do they get conviction around particular situations with that uncertainty. Is that what you see and you're trying to really tap into when you're talking to private equity buyers? Are they really just trying to understand the risk associated with assets that they're looking at in this new normal of a fluctuating market and a fairly high risk market? Yeah. They've still got the issue of deploying capital that remains a weight of capital to deploy. And what they've got to do is find areas where they've got a right to win and the businesses that have got the resilience on against geopolitics or SAS. Or whatever else might come up. It's just a real assessment of risk. But they start at a macro thing. One of the big things obviously is at our macro level, which sectors are being most impacted by these different risks and the software AI impact has really created. That's a period of uncertainty that's probably coming through already. We're starting to move through that as people have done the work on. What areas even within software, what are the moats that are going to protect them? But there has been, and we'll talk about it a bit more I'm sure, that shift to all actually in this environment, what are the most resilient areas and that definition of resilience. It was software before, that's less resilient at the moment. We talked about it, the rise of the technical services. All the white collar consulting investors are now focused on blue collar technical services. And so you get- Yeah, I already got that four or five years ago. When you think about post COVID and the SaaS bounce in valuations and now, and a lot of the SaaS assets were acquired at that time for incredible multiples and they're the ones perhaps now that are sitting with a valuation that's not going to match the multiple that was paid for it last time around. For those in secondaries, that's exactly that, or tertiary is exactly that. But there has been a leveling out of that valuation. There have been big, steep drops of over 20% and the question was, is that going to continue to drop further? So 40% in certain net verticals, certain areas, that is now, it doesn't take long for things to level out and people say, "Okay, I can now make new decisions." Whether sellers are prepared to sell at that level, that's an issue, but if you've been a super fast growth and you can still make a good return at that lower value, there are deals to be done. And whether that'll be primary or secondary, but there have been a lot less primary deals in this period. I think that's largely down to technology where if you think about the growth, primary deals, big area if that was, tech, and that's reflected in tech being 25%, sorry, primary deals being 25% down year on year. Should we take a look at the stats over the last quarter? For those of the listeners that don't know, we do a deal data digest. We used to do it monthly, but we've moved to every quarter now just because month on month, not too much. It's really changing, but looking at it, let's look at the last three quarters. So Q4 '25, Q1 '26, and the most recent quarter. As you say, MBOs, Q4 '25, '40, Q1 '26, '38, and then a drop in the most recent quarter down to 12. A bit of an uptick in SBOs this quarter, so 17 Q4, 15 Q1, and then 20 Q2. And then another sort of standout stat here is the amount of growth deals, so only eight in Q4 '25. Fifteen in Q1 '26, then a big increase to 25 in Q2 '26. So we've got some conclusions about why we think that happened in our deal data digest, but it'll be good to hear. And this is our data, and I suppose we should frame it. We're looking at deals of enterprise value of sort of, I mean, really small, five, six million quid of enterprise value upwards. So a lot of those development minority deals are really quite small, not in your realms of DC advisory. So it's going to be interesting to see how those kind of work. Yeah. I think we talk about it. It has been, particularly minority deals, there's a bridge to where sort of a transaction, so there have been some minority investment deals that were filling the gap where somebody can't deliver the full value and somebody's coming in to buy a part rather than a larger majority. So that's relevant. So it's not just that these are small growth deals happening. Yeah. It is a thing. Yeah. It is a theme. On the secondaries, yeah, actually, I mean, it's pretty much driven by what we just talked about, the rise of the technical services, the secondaries, is most sectors are flat. Healthcare is actually down, so we're only sector down, but industrial products and services and infrastructure services and those related assets are both up 20% and 29%. Is there any reason for healthcare being down? I mean, it's been a very popular sector, hasn't it, in the last few years? It has, and whilst there have been some deals around, like we sold Medigold to health partners. Oh, did you do that? We did. Right. We did. So, yeah, Warburg's bought health partners and then we, there were two deals in- Warburg's been busy, haven't they? They've been very busy. Yeah. So as you know, the technical services side, we sold Network Plus to Warburg, one of the biggest infraservices deals and one of the biggest deals in the UK this year. Yeah. So, but coming back to the point around healthcare, occupational health, there was PAM, there was Medigold, so you get these pockets of activity, but more generally, with some of the uncertainty around health investment in the UK, NHS, et cetera, there's just been less activity. There are some, particularly on the sort of private equity perspective. Is there an element of de-risking here for PE? So the SBOs. These are businesses that already have a track record under PE. They've been through a diligence process compared to the MBOs where they don't have don't have that and it's a bit more run on low quantity is there a potential that that's causing a shift as well it could be uh the deal that we were talking earlier the deals that are happening and happening quickly and at strong prices are the businesses that have got brilliant data great preparation lots of information that supports the equity story and a longer long track record that you can really see see that happen on the primary deals information is often patchy patchy less quality and people when you're being asked to take views i was talking to some investors only yesterday you used to take a lot more views as an investor than than you can do with investment committees today well just just tell us what you mean by that that's interesting so for instance i watch what's your five-year track record of of growth by product by uh by customer if if you can't give that level of information and ic will say well we can't make the right decisions on uh for investment it used to be that well we've got a couple of years we can we can interpret what's what's happened before that'll be good enough whereas now the ic's now i i if we haven't got the data i'm not just i'm not just taking your commercial judgment on what's happened we're just not invested we're just not investing until and unless that data comes forward keep keep tracking it because we don't think anybody else is going to take a set of you either yeah instinct's not enough yeah and that's and that's because of the backdrop of a risky market isn't it yeah they've got they've got to deliver the results now the uh the private equity firms because they're under pressure of liquidity delivering liquidity back to lps which we've talked about a lot in the past so um so i think the secondary is probably there probably is an element of um strong assets good performance in those assets they come to market there's there's a queue around your door saying right let's let's have it you know let's let's get into it because there's a lower level of risk associated to them they've been well managed tons of data advised by you guys yeah and then there are those where we've been talking about are you going to see that you know the very best assets continue to trade really well it's a bifurcated market passage of time you still have to do good prep but not the sort almost almost the best assets are also trading where take out the sat the sas part of it because of the just the demand for assets beyond technology demand to keep doing deals probably been able to get some more deals that are slightly lower quality but good enough information those are starts i think that impacts the numbers as to why there is and i think that's encouraging so businesses that might not have traded in a less sexy sector uh have have had and will continue to have a window whilst technology rebalances itself yeah is there a difference in behavior between large cap funds and sort of lower mid-market funds when looking at assets well interestingly uh with a recent couple of recent deals the mid-cap are starting to act like large cap on the best assets i.e i'm going to do all my work i am going i am going all in i'm going to do a lot of pre-pre-work and when if it's in a process i am going to try and preempt that process and i'm going to take views so i'm aware of a deal we weren't actually involved so i won't name it but i'm very clear they they'd only had 11 of the legal diligence covered but they've worked out that actually what was the real risk here and their way of winning was to to work very four days into round two in order to get a deal done again these are the best quality assets but even that wasn't that was just an asset that was very actively sought so you are seeing the mid-cap realize if i'm going to win deals i need to act in the way the large cap does which is invest more up front and then be prepared to accelerate um we talked earlier about the data the if they've got all the data in the commercial judgment then the other risk areas that those are the risk areas that ics will if you're on ic so having ic members on the deal to take that view is the way to address that imperfect information yeah that's that's probably a good piece of advice isn't it for management team ceos going to market working with advisors it's just you know ask that question of who we're dealing with in the private equity firm is there a i see approval for this how close are they to it are we going to have to go up the food chain two or three you know runs before we get approval from the private equity firm to bid because if you've got that it's it's not that serious it's a really important part of how we think about advice is this is a theory of well have you got decision makers active uh how how close are you to decision makers well there's nothing better than having one of the key decision makers actually active throughout the deal and and we've seen that you were saying earlier before we started recording like you know they were your most recent transaction like the most important people on the calls yes and not not just hello and yeah asking the questions they're actually active throughout so had a real depth of understanding of why why the risk profile of the deal was what it was yeah and built that relationship with management it's also management's judgment of actually this is what it's like to work with them they they do understand our business and they want to engage it's that that's not rocket science but it's not everybody uh is not doing that all of the time there's a lot of funds in the mid-market that just haven't deployed at all like 12 months 18 months again we won't name names but a thin piece of research on uh we're in the digest chat gpt in the digest we'll tell you but what do you have any view there what's what's happening in those funds without specifically going into individuals you've got funds that are in that i'm actually fundraising but i'm not being as public about how much capital i've i need in order to and when i can start doing those deals there's funds that are risk risk off um but really it's not just that they're risk office they just haven't necessarily got the the support to deliver there's funds like uh in the tech very tech heavy investors who have just been trying to work out what it is that they should be doing and when and being prepared to sit on the sidelines for for six months trying to get their head around yeah what does the um um and do a lot of work partly because they're spending a lot of time on their portfolios to understand okay what what's the impact on my portfolio so there's a big attention shift to what does this really mean for what we've all the investments we've already made yet alone making the next step investment yeah okay should we talk through i mean that's that's a bit more on on sas but um yeah we talked we've talked about the really positive situations i suppose it would be interesting to listeners who are not necessarily in the most positive positions just how do those other macro events affect deal flow you know the iran conflict have you at the time that came about february march april did you see deals just being pulled you know ready to go to market yeah we're going to mark no we're not going to go to market anymore there was a a poor if you could work through what what is the impact likely to be on this particular business we had a few businesses that we made the decision actually good news is we think that you can see why these these are resilient and proved to be um from infrastructure services with regulatory cycles through to fire and security which is compliance driven uh which is a large another large tick deal um those businesses you could you could see through it but businesses it wasn't as clear and maybe susceptible to interest rate particular interest rate yeah variability because it was unknown what was like to happen with that the uh the interest rates other than they were going up uh there were so so we we proceeded with a lot but the there were a few that you said well you just need to wait and part of that we had we had a a deal where one of our very hot bidders um very close to the end just said our ic is it we're through on the economics of your deal however they've decided we're pausing and not investing until we understand what iran's going to how it's going to play out uh and and they have still paused they they were two weeks away from they were being very competitive and but that was just a it's it's a full we're we're risk off and they paused for probably six weeks they didn't wait until the end of the war but they waited to work out what what it might look like and because they've also figured out there isn't necessarily an obvious ending to that given what we keep saying saying they come back now that it's a deal back the deal happened so i i won't say which one it was but it happened with a a different investor who had taken a view that, no, you're right. We think this is resilient for all the reasons you've just said. And great news for them. And we had three other parties, but they'd been making very strong running. And so the deal team were really disappointed because they thought they were getting a yes at IC. It was their final IC trying to get it done. But the IC members, one of whom was very active in the deal, just explained we'd just fully risk off. And it was just that window. Right at the end of the deal, there's nothing you can do. You've lost it. Thankfully for us, we had other options and we delivered a great outcome for the client. And it's that investor that's missed out rather than our management team and our client. Yeah, there's something in that, isn't there? It can feel cataclysmic, but actually, if it's a good business, there's probably another buyer. It was a competitive process. That's that. We were talking earlier. We've had a whole range of – there is no sort of standard process. Everything's curated and bespoken. The risk of a preempt is – and a bilateral is that in that situation, we believed all the way up until that point that that investor would have done that deal. If we'd only had that party and they were risk off, that would have left that, okay, it's a question. And when you lose momentum, you can lose a deal for more than four or five weeks. That can be four or five months. What's your advice to management when it does go on for longer like that? If there's something that happens that really, really undermines the deal, how do you deal with that? Keep focusing on delivering the day job, the numbers, which creates your optionality. Because the one thing you want to be able to do is, if it's a decision that actually we're all collectively pausing, the most important thing is to be able to look back, in however many weeks or months and say, yeah, we've continued to deliver. And that only reinforces your position. And also, keep your team motivated. Because at that point in a transaction, everybody's getting a bit fatigued. And you need to keep focus on the business. And the deal will come back. What changes are you expecting? Or has there been – an impact due to our sort of political turbulence? New man in Downing Street. It's unclear. Other than everybody talking about we've got a more left-wing government. More taxes to come. More taxes to come. And he's very focused on talking about reducing the cost of living. How do we afford? There's just so much uncertainty around what that looks like. And the utilities, is he going to be able to afford to nationalise? There's so many questions that actually people are saying, well, just know that the UK is not necessarily going to be a better place than it has been. But we said the same thing when you had Trustonomics. You had the levels of uncertainty are not stopping transactions. Yeah. If you're in consumer, again, there's nothing new there. Consumer's been a difficult place for a while. That's just continuing rather than increasing uncertainty other in particular areas. Like we still see leisure activity because people need to have some kind of experiential, positive experience as opposed to buying physical products in order to make themselves a bit happier. Everyone wants to, like I'm feeling, go on holiday. Spend some money. Enjoy yourself. Enjoy. Enjoy yourself and don't worry too much about whether Count Binface is going to beat Nigel Farage or whether Andy Burnham's going to put up CGT in March. Do you think a CGT change would have an impact on the number of businesses coming into PE ownership? Probably in the short term, with a window still open, you are going to see a rush of founders. I did mention that deliberately because we are, it's not tidal wave, but those that have been thinking about it, again, but we do have this every. Yeah, this happens every two or three years, isn't it? Yeah, but it's real. There are, we've got two new situations where we need to complete by the end of March. And so this conversation again for the primary deals is, is your information ready? And yeah, we know the answer. And so there's going to be in that, I think, it will be Q1 next year. There's going to, there will be a lot of activity, which is CGT driven because it's not, is it likely? It's, it's highly likely. Well, many other levers they can pull. But then that would have a knock-on effect in that you're going to see a sort of uptick of transactions driven by that. But then there will be a cliff edge, won't there, where, you know, founders just won't sell. What is the point of selling if I'm giving, handing 50%, you know, to, to the UK government, in which case, people will wait for a change in government. You can structure, you know, people might do some tax structuring in order to. They'll be able to get their wealth managers will do that. Yeah, their wealth managers and tax advisors do, will do well. And if that's a good, good active sector in itself, wealth management at the moment. But also after that, people will take a view, won't they, on, well, if it was my business and I thought there may be a change in government in two years, because it probably by then two years' time, I probably would wait. Yeah. If it was my, if, if I thought that was such an important. If everything else was equal, you shouldn't let the tax tail wag the commercial dog. No. But if you've got that time and you're not in a hurry, you would, you would wait. We ask you this question pretty much every time we do this podcast. It's like, what's the percentage of deals that you are working on through no. Obviously those that are completing are all completing through your skill and obviously navigation of the market. But like, but I think it was you or maybe it was Richard who sort of said like, yeah, but maybe 30% of what we're taking on isn't getting done. And that's, that's just because of the state of the market. Yeah, that was a year or 18 months ago. Yeah, probably, probably was. What's it like now? It's, it's, it's less than 30%. It's lower than 30%. Some of that's a bit of luck because you need a bit of luck. Some of it, but it's still like, it's still a notable proportion. And, and those that aren't being done are around that. Generally, so tech and expectations has been one area. Other than, other than that, it's about business performance and businesses not delivering what they said they were going to do in an extended period. If you have an extended period, which is why it's really important to only be in the market for a very short period of time, such that you don't have the ability to demonstrate performance coming off. Cause it doesn't take a lot. Yeah. Yeah. We talked about it in the last session. It only takes for a business to be underperforming for a couple of months by a single digit percentage on revenue and margin for people to raise eyebrows and start to question fundamentally, okay, I need, I need more time. I'm not sure. There's, is there a big problem here? Those are the reasons why things slip or, or don't necessarily happen. When, when you, I'm just thinking about our, our management teams and CEOs listening to this and thinking about it, they might be a year, two years away from a, from a transaction. So we've talked about the importance of data. We talk about that all the time. We'll bang that drum again, but you've got to have everything sliced and ready to be analyzed in a cube. And you know, it needs to be manipulated really easily by lots of people. And it needs to back up your story for growth, doesn't it? But what, what's the sort of percent for those who may be coming into PE ownership for the first time and listening to this, what sort of percentage growth do they need to be delivering on an annualized basis to be safe under PE ownership and deliver a good return? I mean, the growth numbers increased because of the, the cost of debt being higher than it used to be. So you need to be in sort of double digits. If you're not in double digits, you've got a challenge. I think 10 to 15%. Yeah. You've got, if you're in 15% to 20%, you're going to do really, really well. Yeah. Because the leverage is fine. Yeah. Your growth rate, if it's sustainable, you're going to get there probably in three to four years. Agreed. If it's bumping along. If it's bumping along at five to 11%, good year is 11, the next year is five. That's very risky for PE at the moment, isn't it? It is. Unless there's sort of very specific reasons why you've got a flat period because of a particular contract. On a general basis, yeah, you need to be hitting, hitting 10 plus. Yeah. And those deals that you've done and have done really well, how did, how did the management team set themselves up? Because they're quite large transactions, weren't they? mentioned earlier the importance of like you just gotta you gotta deliver your numbers yeah there's a range there from a hundred to a billion in in in in the deals we've we've done in this in this period but the same things apply for all of all of those sizes which is have we talk about what having good data mean it actually means having uh granular information that you can explain trends and you can support your equity thesis really clearly what are my value drivers what are my levers or my value levers and this is how i've implemented them and this is the impact in i can demonstrate and then this is what our plan is and you can see generally we're doing more of the same we've done this before it's not uh or if it's we're going into a new country this is our plants really well thought through this is what we've done we've generally have to if your strategy for the next five years is international you have to have done something to make it happen so it's about that preparation it's also about team it's a real big focus on have you got the depth of team not just the ceo and the cfo who do a lot of that initial interaction people will really want to get under the skin of the invent the team that you've got below that um and what how good are they how many layers do they go down then so 100 million a billion the layers are going two three two two three deep probably three deep uh a hundred million probably going too deep yeah that and that's probably the the key difference there yeah and then again are the particular roles that are really important to the delivery of your particular plan so if it's a buy and build how good's your m a team how good's your integration and they want to know that and and drill into that that team and and and really form their own view of yeah that's a good fit for purpose often it's not a diligence of can they do it it's actually i'm on a value creation plan i'm creating the investors creating that value creation planet which is we think we can help by upgrading these areas of your business which will help increase the likelihood of hitting the plan or achieving it earlier the best investors and the best conversations the best deals where we're seeing that the approach is not i'm here to kick the tires and check what you're telling me is right what can i understand and what can i add and how can i help and those are conversations that ceos your members enjoy the most they're positive conversations about believing the future even if within all that are couched really some key diligence that they haven't yet gone over that conversation having conversations about value creation if you're a ceo is a much much more enjoyable conversation yeah we're gonna go yeah how much are you seeing ai adoption feed into that in terms of growing the business obviously everyone's talking about at the moment there's a fundamental value creation lever and also being able to demonstrate that to pe is it having a diff making a difference so i'll start with my my that technical services argument which is there are businesses which you could part of the the investment thesis is this will not be ai disrupted so that part of the market has been active because it's really easy i can see there's efficiencies that's going to come in the way we deliver but my business model is not being impacted that's why it's a key reason why the the level of activity in those in those sectors should we just run through those sectors as well so blue collar services technical services ventilation hvac compliant tick testing pleasure testing inspection compliance and that's a broad spectrum now of activity which includes hvac maintenance you've got your infrastructure services so in the old school used to be basic hole diggers but actually there's a lot more complexity parking a parking part of that um yeah charging electricity anything that's in the energy transition thematic so which is power and water yeah data center relate m e related to data centers so those macro sectors but the product that you're delivering the service you're delivering into is a physical person delivered service where you can't just replace them with a robot whereas the white collar has been a challenge because the accounting deals that were so prevalent have slowed as people are just trying to understand what that margin impact's going to be in the business model impact is of ai in professional services so the white collar consulting generally has been as slow as a consequence of that and obviously talked a lot already about software where the business models are being appraised i i want to go back to that transaction so i'm just thinking about management teams you know those those billion dollar enterprise value deals plus the 100 million enterprise value deals i mean you've got to hit the numbers that's what we're saying but it takes we know that you because you tell us it's taking 12 months you know 8 to 12 months to sell a business now if you're really going to get ready i mean from the point of your engagement to the point of actually transacting you know this is not a sort of 12-week process this is like you better get ready you better get the story right you better get the house in order um and you better do some work initially on warming up the market but if you're a ceo and a cfo doing all of that work it's actually quite difficult to keep an eye on the performance of the business isn't it so what's your advice just around like how do you how do you set yourselves up as a team to make sure the numbers get hit ideally you know if you're going to be successful if you're going to be successful if you're going to get hit ideally over delivered a really important point it doesn't just happen because you work harder every day as a ceo and a cfo you have to make sure that you've invested in your team and you've got a t at the largest end you can make investment decisions more significant in in in an art in that case it was about investing earlier in ceo who effectively ran the date the day to day of the business whilst the ceo was leading the deal yeah now the ceo obviously is still keeping an eye on everything but he can't manage it in the same way he can't lead the day-to-day in the same way can lead the business but he can't lead the operations of the business and having that capability across all of the key functional areas the cfo having a strong making sure they've got a really strong number two who can again make sure all of the day-to-day uh and all the prep gets done whilst the cfo is supporting the ceo in yeah bringing everything together so you've got to have a really clear plan who's going to do what who's managing the day-to-day who's involved in what in the transaction so but making it very clear that you're not going to meet that that ceo because we're not distracting that that ceo by the process that's something that's for later down the line with uh with the investor conversations yeah i i just think that um that's just super critical and we see that all of the time in terms of businesses just you know succeeding to the exit versus those that are struggling if there's strength and depth in the management team and and that doesn't necessarily mean you have to go and hire a ceo you know in smaller businesses but you better equip those people in the number two roles which is like the cfo role and that equipment might be making sure that they've got the team underneath them that's stronger than it rather than it being just good enough it's got to be absolutely that takes like two years you know you've really got to be developing those people up to that point and those people once you've done the deal you're really thinking yeah they they they're not far off being the number one you know in another three years to another couple of years they could have my job and that gives you lots of optionality as the ceo and the cfo and then also it aids the whole process of management due diligence and actually they've got a really strong team here it's classic succession planning but with it being well invested early enough to make a difference in the preparation and then the delivery yeah i thought you're going to go somewhere on the conversation about the length of time it takes and hitting your numbers challenge the world how do you set your numbers such that you that's a good point you miss them one of the things key things there is we don't go out with detailed numbers until very late you can talk about the shape and build a build enough appetite and conviction without being prescriptive on detail detail so just i'm really interested in that so what do you mean you know so you've got buyers lining up three or four bidders one pre-empting and you haven't given the detail of the numbers yet i mean what have you so you know maybe not maybe not that far when you when you're you you've got to really engage and warm up the right parties early enough for them to then spend time and effort on the money on the market and the commercial work at that point they've only really had information that's saying this is what we did do last year in fact you know you've done that yeah and directionally we might be we're going to be 60 plus and you know that you're you're 60 plus or you're 70 plus or 80 plus you know that that plus is actually probably more like you you're thinking 65 plus plus yeah so that's enough for them to yeah to know that the scale of growth that they know you're going to deliver the details that you'll get that detail yeah and then when you have that next interaction you start to it really engage and release information for a set of information it's narrowing that that range down it's okay so we we're on track and our run rates north of that good news let's give you some good news so they've correlated it to this is a business in the 60 to 70 yeah okay great actually they're at 60 they're at 65 and there's some some upside in the run rate you're trying to build that narrative up now obviously if it's if you're at three million going to to to four million it's it's harder it's the same principle you you've got to manage expectations and release information in a way that you're building conviction and giving good news i know when you give the real detail it's it's it's just a detail supporting the story yeah it's tough it's tough on the other side of the fence isn't it for the private equity firms yeah it's not it's not an easy it's like well in the debt we're we're we're sort of getting a few gray hairs now aren't we tim we're getting we're getting on a bit um but you know back in the sort of uh noughties uh early early tens i mean private equity was just fabulous uh cheap debt reasonable growth um fantastic markets whereas actually now for them it's it's really quite tough it's a tough industry it's a more competitive it's more mature it's a maturity that's what happened uh those in the in this in the industry have got to work harder to deliver the same returns they've got to work smarter and you one one poor performing fund can kill you as opposed to well but look at the last one it was great this fund is okay but don't worry the next one will be great that that one fund under performance means you might not raise again and that's that's the real challenge for the pe industry is making sure that they identify themselves in in that place and then the individuals their whole economics are more challenging is i'm going to invest 10 years of my of my career with the belief that i'll start to get carried at the end of those 10 years when you're at that sort of middle and junior level yeah but they're seeing oh that might that might not transpire yeah so you've got more movement between actually within the industry which is a very good example of that and i think that's a really good example of that and i think that's a really good example of that and i think that's a really good example of that and i think that's a in a short period of time that are really going to make the difference to ebitda performance and get us get us to an exit and you know you should just be obsessing about that 15 10 to 20 annualized growth and plus and how you're going to deliver it i just wonder coming i'm i'm rambling there a little bit because there's a thought process going on i just wonder how closely are they dd'ing the go-to-market sales functions and pipelines now very closely it's a that's we're talking about data it is how does it how does it or the funnel how does your funnel work what's your conversion rate how it's it's one of the critical commercial diligence questions and it's not just out how closely does the sales it's not it's not just sort of outsourced to ocnc or bcg yeah it's it's actually the deal teams are getting a granular crunching the numbers on and how your sales funnel works how concentrated it is by particular how closely do they look at the individual then the sales leader the chief revenue officer the commercial director whatever the job title is are they getting them in are they yeah you talk about who who they need to spend time with how deep they're going into into the team uh the cro and the sales function how it operates how effective it is how what's the reward structure how aligned is it when you have you changed your reward structure which has led to that that improvement in your sales or when you've got a dip was that really getting granular on how you do what you do not just and who's doing it how good are they as well as just what's the output is yeah it didn't it didn't used to be at that level you're talking about sort of the industry sophistication yeah um and you think it's just a little bit more of a challenge to do that that takes time and energy so it's come back to your protecting the business you've got to be well set up for it we think that i mean obviously that role delivers the organic growth but that role now in terms of quality has to be fabulous and we see this it probably hasn't had the emphasis on quality that has you know some of the other like the cfo role for example you know yeah i think that's a fair it's a fair point it's a fair point it was the obsession with the cfo rightly so for the last 20 years of course the cro cro sales director commercial director hasn't been that obsession but now it's coming it is and to richard's point around ai it's also kind of how ai savvy are the the whole of the leadership team not just i've got an ai person focused on this it's yeah because it's impacting every area of a business yeah you should be using it you should go to market yeah are we done i think so yeah we said half an hour and it's been 45 minutes thank you for joining us we'll see you in november and uh we'll be in our new office by november this is the last meeting we'll have sam so i'm going on holiday on saturday and when i come back we'll be at 99 aggression street around the corner our new exciting we're going to leave this old school boardroom into a new jazzy nice and modern next generation absolutely i look forward to it thanks tim thanks richard thanks sam