4 Ways to Grow a Multi-Site Business While Protecting Core Values with Clare Roberts

This episode is brought to you by dealroom, the only M and A platform for buyer led M and A. If you're running multiple deals a year and still relying on legacy BDRs and generic project management tools, you're not just wasting time, you're overspending. Teams using Deal room see a 40% reduction in execution costs thanks to built in diligence workflows, easy permissioning and automated task tracking. It replaces multiple tools, your vdr, PM software, and even a bunch of spreadsheets with a single source of truth for the entire deal life cycle. You'll also save hours on contract review with AI that pulls key terms and risks automatically, helping you move faster and more confidently. M and A is hard enough. Deal Room gives you the structure, automation and visibility to do it right without blowing your budget. Check it out@dealroom.net or tap the link in the episode Description here's to the deal. I'm Kisam Patel and you're listening to M and A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals.

Foreign.

Scientists welcome to the M and A Science Podcast. This podcast is part of a mission to rethink how M and A is done. The old school Settle that approach. It's dead Buyer led. M and A is all about strategy, alignment and efficiency. And let's be real, it's not about just closing the deal, it's about making it successful. We uncover what truly works in M and A by learning directly from the best. For episodes, resources and tools to elevate your M and a game, visit mascience.com, follow us on LinkedIn. I'm your host Kisan Patel, founder and CEO of Deal Room and Chief Scientist at M and A Science. Joining me today is Claire Roberts, obe, Founder and CEO of Kids Planet, a rapidly growing childcare company with 225 nurseries across the UK. Claire started the business in 2008 and has since scaled it through strategic M and A and greenfield development. He's also a brand ambassador for Girls Out Loud, advocating for the empowerment of young women. Today we're going to talk about balancing organic growth with M and A, managing relationships with sellers and building a scalable business while preserving core values. Claire, thank you for taking the time from running a big business and doing deals to have a conversation with me.

Not at all. Thanks very much for having me.

Can we kick off with a little bit about your background?

I originally am an IT graduate but I Did my degree prior to the Internet really launching properly. So my degree was becoming outdated as I was studying it with technology. Moving forward, I ended up in various sales careers, first of all in recruitment for a number of years, and then I was in the pharmaceutical industry for about seven years prior to becoming pregnant with my oldest daughter, who's now 17. I took voluntary redundancy, as you do when she was five weeks old as a baby, and decided that I was going to try something really new and different and I needed to find a nursery and hadn't been able to when I was pregnant. And I decided that I was going to basically buy a nursery and operate my own nursery to fulfill my own childcare needs, but hopefully to help other people who were having the same struggles as me on the journey of trying to find childcare and balance work as well.

That's a good place to stop because I want to get the full story. I got to ask, what's the OBE by your name stand for?

It stands for Order of the British Empire. And I was awarded it for services to education in 2022. So I was awarded it by the Queen in her last honors list. And then I was actually given it by the King at Windsor Castle. And I took my three daughters to come and watch me receive that.

That's awesome. I gotta ask, you know. Cause we're Americans.

Yeah, yeah. It's part of the award system that's in place in the uk and it's one of those things that you never really think about until someone tells you that you've been nominated and you're being awarded one. And then you're like, oh, that's quite special. But no, I was thrilled. It was a real privilege and an amazing experience.

Awesome. That's really impressive. Let's do some storytelling.

Okay.

I want to build a story on this thing that's really unique and interesting. You were pregnant. You couldn't struggle finding the right nursery somehow. You said, hey, why don't I just buy the nursery?

And yeah. So I live in a village which is in between Manchester and Liverpool, sort of right in the middle. I was pregnant and like many people, was thinking, how am I gonna carry on doing the job, which I've loved for many years, and make sure that my child's being well looked after and that it works for me and her dad. I looked all around, and part of the problem that I came to was that where I lived, nothing was particularly flexible. And it was all geared at dropping off at the earliest at 8am Now I was on the road every day before half seven. So already I was starting to think, this sounds like a nightmare. I came to the conclusion that lots of people, and I saw this through friends who'd had children, people really struggle to try and find that way to go back to do a job, but also to make sure that their most treasured possession, which is their child, is well looked after in the right environment. That's of a high quality standard. I got to the point where I had Izzy, she was five weeks old and my company went through a restructure. And I basically on a Friday, spent the weekend talking to my husband at the time saying I'm going to take voluntary redundancy. And absolutely that was not something that had ever been on my agenda at all. But I think I just realized that I was facing an impossible task of not having childcare that was gonna work for me and I was gonna go back to work and really struggle. But the problem was, like many people, we'd bought a house relying on two people's incomes. So it wasn't as simple as sit at home and look after the baby and don't do anything. I had to go to work and I was a bit like, well, actually, do you know what, if I'm struggling to find this, other people must be as well. So why don't I look and see whether I can find a nursery and buy that. And basically that's where it all started from. What was lucky? I don't really know whether it was deliberate. It certainly wasn't deliberate in my mind at the time. I ended up with my dad buying two nurseries in the very beginning. He may say now if he's asked that he deliberately wanted us to buy two nurses. I don't know, I've not actually asked him. I should do really. But that was a really important factor because really quickly we were a group. Sometimes with business, if it's particularly multi site businesses, you get so absorbed in the day to day of things in one setting that you can't get out it, if that makes sense in terms of seeing it from the growth element. So I suppose I know no different than having been very quickly a multi site business. Well, two sites to start with, you.

Started with the two sides. So it already gave you that thinking, like, hey, we basically have a platform.

Yeah. And obviously that taught me from day one that integration was key and having two separate nurseries doing totally separate policies and processes, et cetera, you have to have a common ground for that to make it work. So I suppose I learned that just Naturally, as I started. And for me that's really been part core basics and the values as we've grown and progressed and moved forward.

How'd you put the money together? Private at that point?

Yeah. So initially it was through private investments. So my dad and I founded the company together. He had some money, he was prepared to invest that money into the business and that's how we started. Could I have gone to a bank? Possibly. But I think once I decided to do it, it was quite a quick decision and we needed to go and move forward with it. When I look back, it's a bit of a whirlwind really. Literally within six weeks of starting a health clinic came up for sale in the village that I lived in. And I was like, this is a no brainer. This is my answer to a nursery in the village, which is what started all of this in the first place. Within six weeks we'd already decided we were going to the third setting and obviously that was a building conversion, which then brought me into the development side and the creation side of doing a greenfield site.

Was that the first? I guess it was a timeframe.

So we started in September 2008. By the end of October 2008, we'd agreed to buy a clinic in the village where I lived. That come up for sale?

Third one?

Yeah, third one. By September 2009, we'd got a builder, we developed that building into a nursery and we'd actually got a fourth one. So within 12 months we had four. So really. So at some point as well, I probably should add in, I had at some point in life a five year old, a two year old and a baby. So in the first sort of five years of Kids Planet, I had three children. I always joke and say that growth was able to escalate once I'd stopped having children. So we probably grew on average about two nurseries a year for the first five years. That was genuinely just being real. I think when you're an entrepreneur and you're a female and you're having children, there are natural distractions that halt your ability to scale. And that was probably mine. Then I saw kids. Planet, being my fourth child, managed to escalate further once I stopped having babies.

When did you get to the point when you started working with institutional or private equity investors?

We got to the point in 2016 where we had 15 nurseries. At that point, the blend was probably about 50, 50 of nurseries that we'd acquired or buildings we'd converted or buildings we'd built from scratch. And we had all the properties that we owned that we were either going to develop and build from scratch again or convert. We decided to bring an investor in really because by that point we'd got bank funding. But in order to escalate the growth faster, we needed to bring in a partner who would invest more cash into the business and stop that looking like a three to five year plan and actually rapidly scale it up. Bgf, which stands for Business Growth Fund, they're a minority investor internationally now, but they started in the uk. They invested a minority stake in the business when we had 16 nurseries and grew from there. Really?

Is that the only private equity that you work with?

BGF invested in August 2016. They're still partially invested, as in they rolled in. When we did our next round of raising finance, it's Fremen International who are our main investor now. They invested in November 21st. At that point we had 82 nurseries. So we'd grown over that five year period significantly, obviously as well. Remember that during that period of time, Covid happened as well, which threw a few bumps in the road for us. We probably had a period during COVID where there was about 18, just maybe just under 18 months where we didn't do any acquisitions or grow.

Oh, wow. Even with that, you're still doing good with over 200 today.

But do you know, in some ways when I sort of look back, like, obviously no one would wish a global pandemic on anyone's business. It's not ideal, but actually that pause was fundamental for us because we'd got to a scale just before COVID of having 52 nurseries. It enabled us to sort of look at what we'd done and really reflect on the structure and the infrastructure and put in place what would be definitely more stable foundations for escalating and making that growth more rapid. And that definitely helped us. It wasn't obviously deliberate, but sometimes things that happen give you that time to sort of pause and reflect and become stronger.

Yeah, that's a good point. That's a good point. Take the advantage of the downtime. The P firms working with them are you any key lessons in terms of working with. Working with the right partner?

It's really important that you do your homework during any process. You have to see who is a partner, because I think that's key. It is a partnership. You're all invested in the same company and if you don't see it like that, it's like any relationship. You've got to work at it and make sure that you're all supporting each other in the right way. BGF were a minority investor and they tended to back the entrepreneur and allow them to sort of run with what their sort of growth strategy or plan was. When Fremen came and invested, they were really looking at us scaling at the next level. And I would say that they were a lot more involved in terms of helping us think and reflect on the structure and the strategy as we move forward. It's really important that you recognise the value of what a PE investor is going to bring to you, because obviously someone in your business, if they're going to be involved, you need to make sure you're utilizing getting the best out of their skills and expertise as well. For a CEO and a founder, you have to recognize the value that they're adding and see it as that partnership, because if you don't, it's quite difficult if people come into your business and have opinions and ideas of direction and things.

You got a good point. So it's beyond the money. Everybody's got money. And that's something I've been looking at too, is like, how well can they support your growth? Especially when M and A is going to be instrumental.

Yeah.

How do you think that actually panned out? I feel like you get the pitch a lot, but then does rubber hit the road when they actually work with you?

For us, it did really work out. We've gone from today 82 nurseries to 225 at the moment, which obviously that's pretty rapid growth in over three years. For us, it was helping us look at things from technology and data point of view really differently. When you scale knowing the detail in your business and sharing that data and being able to make sure you can unpick what's going on across multiple sites and locations. But actually using it in a really sensible way to inform decisions is key. And you can't know what you knew about 10 settings when you've got 225. It's been fundamental to us that investment in the platforms and the technology that we use across the business. And also in terms of the key personnel, like, obviously, when I founded the business, I was doing loads of different roles at various points. And I think it's really important as you scale that you bring in the right expertise to come in and support you. Because you're a CEO, you're not supposed to be a superhero, being able to have all the knowledge for everything as you grow.

Really good point. Let's talk about deals.

Yeah.

I'm curious when you find an opportunity, what are you looking for? Like, how do you know this is going to be a good fit culturally or does this anything goes? What's the criteria that you know this is going to fit your platform?

So for us, we've grown in quite a controlled way geographically. So one of the things that's key is having the right support structure to that growth. So I know when things were stretched for me in terms of the direct reports to me, and it's been really important as we've scaled up, that platform's in place. So a lot of it has been around location and making sure that we've not just randomly picked places that are hours away from each other because people don't support businesses in the right way. When it's too far away to be able to have that direct contact. We look for either single setting acquisitions or small group acquisitions where people have good quality asset. For us, really with a nursery, ideally it would be a nursery that's over 50 places just because of terms of the scale. If it's much smaller, it doesn't really make sense. And it's making sure that we can support them and add value in bringing them as part of the kids pipe family, but also that they're already on the way with our journey and they've got the same to a certain degree. They don't have to have the perfect culture or perfect value alignment, but they need to share the fundamentals of wanting to deliver high quality childcare, having good people, a decent management team, and then we support them and integrate them. And I refer to our nurseries as a family. And that might sound really cheesy, but for me that's how I see it. It's really important that people feel that they're part of something special and they get that magic and they get what our values are and they don't feel that they've joined a sort of cold corporate. Because ultimately we're providing a service to people's most treasured possession. We shouldn't ever take that for granted. You need to have the right people. People are key. In our business, we employ nearly six and a half thousand people. So people are fundamentally the key to delivering our brand and what our offering is.

Okay, Culture is a big element. Let me even back it up a little bit of the whole process. I feel like you look at the data, you have some general criteria on demographics and location and stuff.

So genuinely we don't really have to go out looking for these acquisitions. There's enough acquisitions that we can grow through. People who are coming to market through people who approach us directly. I think this is quite important in an M and A business. There's loads of things that CEOs can do to promote their brand and make them known in their sector that actually later on, if they're looking to grow, can add real long term value. We get about a third of our acquisitions as direct approaches to us. People who are looking to sell, they're that come to us and want us to be the buyer or acquirer.

Just because you have a good reputation.

What you see is what you get. I think it's really important that in any business you have someone who's the sort of figurehead in that business and that they talk and articulate what's important. And for me, I'm really honest and I've done lots of talking in our sector. And that's important because people don't go into childcare because they don't care about it. People really care about what they're doing. So it's really important. Obviously, money is a fact, of course it is. But it's really important as well that they get the right person to take on their legacy. And that's really sort of key. You invest your love, your time and your efforts over the years into your business and you, yes, you want to do well at the end of it and do whatever you want to do next, but you also want that legacy to continue and to be left with a safe pair of hands. And obviously my job and our team's job is to make sure that they recognize that we are that chosen person or people to look after their business.

Yeah. So it sounds like now you got a big reputation. What about backing up to maybe in the earlier days when you didn't have that, what was the approach?

I did all our M and A visits and everything. My dad's an accountant. My dad would look at the numbers and make sure that they seem to stack up. I would do the. I would do the visit. I would talk to the owners, I would meet team. And I did that till we had 82 nurseries.

Teach me, like, what's the approach?

It's about being personal. It's about talking about what.

What does that look like? Is it a phone call? Is an email?

No. No. So I used to spend my evenings and weekends traveling throughout the country, visiting nurseries when they were closed and meeting owners. You can look at Ofsted reports, which are our regulator. You can look at numbers. But really the only way to go and tell if you want to do something is to go and look around them. And that's what I do. I'd meet the owners, I'd ask them questions.

You just show up unannounced, you'd have.

Made appointments and done that and you'd have made an arrangement.

What does that look like, though? What's the message? To get them interested, to want to visit with you?

So these visits that I'd have been doing would have been people who'd already gone through a broker and wanted to sell their businesses, so they'd already decided that they were going to sell. So the message is exactly what I'm talking about. It's about talking about our values, our culture, how our colleagues are the most important resource that we have, how we invest, what our support structure is, what the opportunity is for people in terms of career progression. And they're all the things that I'd talk about and make sure that they felt comfortable with. It's really important as well as a founder, that they hear that message and it doesn't become diluted. But I think there was a lot of homework that we do before we get to the point of doing a visit where almost by that point, unless there was something really fundamentally wrong during the visit or someone told you something, it was something you were really interested in and wanted to do. The other thing that we've always had a reputation of as a company, which I think is really important, is if we say we're going to do something, we deliver on it. Unless there's some real sort of unexpected things that come out during due diligence, the offer we make, we stand by and we're not in it to chip people or to undercut things at the last minute. We're in it to give them a fair valuation for their business and to do it in the timeframe that we agree on. That's really important because people don't want everyone knowing what they're doing as well, and don't want failed processes and all kinds of things, which you see quite often in our sector and in many other sectors.

A lot of the businesses you mentioned, you'd find them through a business broker. Was that how it started? And then did you do a number of deals, just sourcing them yourself?

A lot of being through business brokers, some have been through tenders where different institutions have reached out to us directly and have asked us to go through a tender process. And then we've been awarded either single site or a group. Some have been property that's been for sale, that have gone to view, and then we've worked with a developer who's developed on our behalf and then we've opened nurseries from scratch. It's been a real blended approach of greenfield development and acquisitions. Probably more in the last three years. People then that know people who we've acquired nurseries from have contacted us directly because it's been on referral and recommendation. I get quite a lot of people reaching out to me on LinkedIn who have heard about us, recognize our reputation and think we'd be an easier option to sell to their colleagues as they look to exit.

Well, you got a lot of different areas that you source these deals. What does the terms ultimately look like when you do have this private owner and you're selling? Is it here's a check and you're off to the races or are you creating different structures, earnouts, rollover equity, things like that? Do you have a template they use?

We don't really have earn outs or things like that. It tends to be two ways. Either someone looks to exit totally and we would acquire the nursery and the freehold property. Or as is quite common more so these days, people might want to sell the business but retain the property and give you the property as a leasehold. We sort of open to what someone wants to do in terms of exit with that. Like ideally we always used to have everything as freehold, but it's not always possible to do that. So we're quite flexible in the model and that's also what enables us to grow at pace because it's not just a one size fits all approach.

That stuff sounding so easy right now like what's the hard part of doing these deals and working with the sellers?

The fun part is once it's yours and integrating and making sure that when.

The deal is easy, it's after Doing.

The deal isn't easy, but it is if you come to an agreement and people are doing what they say in order to make that process complete once you've completed. The hard part is the integration. And because lots of our nurseries have been single site acquisitions, it's the number of integrations in that process and making sure that it's personalized, making sure that people get it, making sure it's not just something I say that isn't then delivered by my team beneath me.

Let's talk about buyer led. And this is something I've noticed big advocate around is that first time you do a deal it can be very seller led. Let them drive the process. But then as you get your reps in, process evolves and Changes and it also becomes buyer led. Love to hear from your view doing this a number of times. That's true. And how do you see it evolve?

It's slightly true. Depends. If you end up working with same lawyers and things like that they start to know what your points are that you want in a deal to complete. We have set things that we would have as part of our heads of terms. There's lots of nurseries that have been for sale across our sector and probably what our expectations are a fair one. Sometimes for some sellers they think they might have to hang around for much longer than they actually do. Post completion you need them around for a few weeks in case there's anything that you need to ask them. But the reality is sometimes it's quite difficult. If a seller hangs around for too long. It is quite awkward because obviously you do need to make sure that you're integrating things properly and make sure that team that's joined. You feel that the part of your culture and your company and it changes from every deal to the next. It depends how experienced the seller is as well at deals and things like that.

You know, that's what I thought. The crux of being more buyer led is ultimately being able to better plan integration and execute integration versus when seller driven. You don't do as much planning or have an opportunity to that just fast track timeline to close a deal.

So the reality is the fastest acquisition we've ever done was probably in about eight weeks. The reality is it normally takes three months. Our due diligence process for even single site acquisitions is quite thorough. But the thing that we do that's really important because particularly for a single site seller is it's quite a daunting process to go through a sales process probably with an organization that's the size of ours. So we support them and we try and cut through some of the legal chat to make it as simplified a process as possible. Not everyone's as prepared as they decide to sell about what they might need in order to complete that sale. So we help them and tell them how we want things to look and be presented. And actually that helps us in terms of once it becomes our acquisition, we've got a platform to start from of some of the stuff that otherwise historically we might have been creating post completion.

Wow. So you're giving them an idea of how they can prep.

Yeah.

Need to integrate better.

And probably a lot of those things are there. They might just not have the hands on them as easily or as quickly as possible. Which for us that's quite important as we scale.

You have like an example of something like that, like, of what you would have a company do to even like.

Looking at recruitment files, making sure things are organized in the right way. If someone started a business 30 years ago, recruitment would have been different 30 years ago. Whereas obviously for us, when we acquire it, whether they took someone on in 1985 and didn't need references, then that's not that helpful to us as we come in and acquire sort of 40 years later. So do almost get the seller to do some of that work. That means we don't have to, so that we'd get them to make sure there were references on all the colleagues in every single folder, even if they have to go and get them from somewhere or have to provide statements of employment themselves. The world's changed a lot. So you find that when you go through due diligence, it could be really different. We've got people who've worked in nurseries that we've acquired for 40 years and you joke and they bring out their CVs and they might be handwritten because you didn't even have a typewriter as they applied for jobs and things. That's some of the source of more fundamental parts, really.

That's really interesting.

The other thing is obviously for single settings, we have a nursery software platform that we use, which is our registers, our future occupancy, our bookings, everything's on it. Loads of people who have single settings wouldn't have a system like that. It might be done on word. By getting everything in an organized way prior to completion, it means we've got the visibility really quickly of how we want it to look within our platform. It's things like that that you should try to think, what's your problem after completion on a Friday? What's going to become your headache or problem with what's missing at the moment on the Monday?

You have like key operational areas or factors that you focus on when you're doing a new integration.

Everything from recruitment, purchasing policies, procedures, everything. We have an integration process that takes probably six months from start to finish, but it evolves all the time because we listen to the feedback from the acquisitions that we do as well to make sure that we're always being fair, doing it in the best possible way and making sure it's personable as well. It's really difficult because some acquisitions integrate faster than others do as well. Like typically, if we've got a group that we acquire often, that integration can be much quicker because they're already used to group reporting, that kind of thing. Whereas for someone who's not got some of the systems I'm talking about, that on its own is a bit of a shock gone day one. And it's also as well, important that they know who everyone is, because we have such a large head office, central support team, that they've got to know what everyone's job is. And that's one of the big USPs. Actually, during an acquisition, lots of people go into being a nursery manager because they love children and that's why they went into early years. They end up doing a load of things that they never imagined they'd want to do, like invoicing, payroll, all those kind of really important but probably less interesting things for a nursery manager. So one of the things that we try to do is to make sure that we can remove some of the burden of that side of things. And I think that's a real USP during an acquisition for us, because we're actually able to give them some time back.

Yeah, you can make it easier to.

Operate your business, do the bits that are really important, look after the team, look after the children and make sure those sort of pillars are right rather than being distracted with things that often everyone's like that. Oh, they always look so relieved when they find out that payroll and invoicing has been removed.

Yeah. You mentioned culture and values earlier and noticed this, that good acquirers put a big emphasis on this.

Yeah.

How do you preserve it or how do you approach it with these newly acquired businesses?

I working really hard all the time to make sure that everyone lives and breathes the culture and values. It's a bit like stories around the fire from the elders years ago. If you don't keep talking about them, they just become stories that no one really knows about or understands the importance of. At various stages, we often have a big reflection on values. We do a sense check of do people really know what our values are? Because if they don't, you're doing something wrong. So we make sure that our values are embedded in everything that comes out to parents, to colleagues, and it's interwoven in all aspects of their role. We have an acronym for our values, which was designed deliberately by our senior leadership team to make it easy for people to remember them. And the word is care. As long as they remember care, they have a pretty good chance of getting what our full values are. But they are real values. They are the things that were important in 2008 that continue to be really important. As we move forward, the more you talk about your values and your culture and how you want to look after your team and how you want people to feel as a leader, the more everyone else does that and you make sure that is something that they know is really important to your organization.

Being very proactive.

It is hard work. If people don't know them, it's frustrating, but rather than being frustrated, you have to work out how that message has got diluted. When you grow in an organization, if you're not careful, it gets forgotten what's important, so you have to keep talking about it all the time.

Yep, very true. How about you have organic growth happening, managing that alongside a high volume of acquisitions. How do you do that?

Reviewing our core estate, looking at the occupancy across our nurses, that's where the data piece is key. You have to know what the performance of each of your. They're like mini businesses really wrapped up into one. So you have to know individually how they're each performing and not just now, what the future looks like. So our system gives us visibility like 12 to 2 years ahead. So we need to look at that all the time and look at either how we can expand the facilities that we have in a certain site or how, if necessary, we can then actually go and actively seek something else out to meet the needs in that local area. But it's by having a structure in place where everyone knows that's what we're doing and how we all work together on it.

That makes sense. You got to get the system to really track everything, and that's a big part of it. That's interesting. Is that sort of the general theme of how you've seen things evolve as you grow? It sounds like there's a lot more investment in the people, kind of upskilling.

I go out, visit nurseries as regularly as I can, probably not as much as I'd like to, but when I do go, I try and make sure that the next layer of management and the one below that, they're with me. And if I spot something, I'll talk to them about what I'm spotting. So they almost learn, like even looking and thinking, how could you expand this? What could you do? Sometimes it's easier for you to see it when you're there. But it's funny, not everyone always. I suppose that's what being an entrepreneur is all about, isn't it? You often spot things that others might not see the opportunity in, and it's how you get their mindset into it. And it's been interesting even going to areas when I've done visits and we've been full and I've said to people, why don't you go and find another building? And actually the reality is nursery managers have gone and found buildings that were developed or acquired, which obviously that's key because they know their local area and often live there and know the people, the community, et cetera. So that's important as well.

Good tips when it comes to scaling geographically. How do you do that while maintaining operational quality and efficiency?

We review things quarterly. We look at what's coming through in terms of acquisition, what we've got. We always make sure that there's capacity within the areas, that we're growing geographically as we're starting to move into new regions, that there's availability there of resource to support those acquisitions. That's the most important thing. You have to always be ahead of the growth rather than running to catch it up. And between sort of myself, my sister who's at my OPS director, our CFO, our people director, etc. We sit and look at what we need to do to make sure that we're ahead of it at all times. And obviously, like I say, because acquisitions from signing heads of terms typically take three months, you always have time to do that. But we also have key geographical areas that we know we're growing in or going to expand in. So if we've got capacity there, it naturally makes it really easy to absorb more growth. But no, it's by measuring the quality, visiting it, auditing it, making sure that you're checking that the things that are important are being done and having team that are field based. We have a big field based team across all our departments and that's so that they can support locally the nurseries and what they need.

All right, Claire, we're making all this sound way too easy. Let me shift it and just. Let's talk about the bad. Let's talk about what goes wrong.

You do your due diligence, the staffing elements may not be right. And on day one, you inherit a massive hassle of someone who uses agency staff. And it might be nearly 50% of the team in a small group that you've acquired. Now, some of those things you'd know about, but you wouldn't really know how challenging that. So we don't use agency staff at all across our business, but we've done acquisitions where that really has happened. And it was with a group of about five. Overnight, you've got a recruitment challenge there that you've got to basically get your arms around very quickly and sort out, because once you've acquired something, it's your problem, it's not someone else's problem anymore. That's the kind of thing that can happen sometimes. You could complete an acquisition on a Friday and on a Monday you get inspected by your regulator. Now, that is not an ideal scenario because you've done your due diligence, of course you have, but it's only become your nursery hours before. It is a bit like what you get there. It's like rolling a dice, scaling and growing a business. It's like a roller coaster. There's highs, there's lows. But I have a philosophy where you can be slightly wounded for a moment by something going wrong. But with every problem, you have to find a solution. The sooner you find the solution or what the learning is, the sooner you can put it to one side and all stop wallowing in the misery of what's happened. For me, that's in our DNA and our culture, that's really key because you have to learn and you have to move on. And I am a believer in, yes, everything that goes wrong is a lesson. But you shouldn't just keep rehashing it out between yourselves and trying to go over and over it again. Because once you found out what's happened and how it's gone wrong and how you're going to fix it, so you're hopefully not going to have that problem again. Move on and put it in a box. As part of our company, as we've grown, it's been important to make sure that other people have those problem solving skills. And often, rather than giving the answers, it's saying to people, what do you think you should do? And even though you want to say, this is what I think you should do, letting them come up with those conclusions themselves.

You ever had to walk away from a deal?

We once had a deal where someone wouldn't sign as part of the spa to say that they'd adhered to the Children's Act. The Children's act is like legislation. I don't know whether they were just scared legally by their lawyers of everything that was put in front of them. But we were just like, if you're not prepared to sign that, this is the deal breaker and we're done. And even though it was an amazing opportunity, we walked away at spa.

You walked away?

Yeah. We'd gone through a load of due diligence. We spent a load of time, we did architects drawing up plans for this stuff, like that to me is a red flag. That's the real red flag. We normally, if we get on the road to that point, we're all in alignment. We've picked up other deals where other people have got at very advanced stages and then they've tried to be price chipped by someone else.

Oh, I see, you don't like that.

And often we might have been like the second bidder in a process, but the bid that we'll have made is a fair bid. So they then come to us and say, will you fulfill on that basis? Sometimes some people go in high thinking they're always going to chip people in order to win things. But I don't think that's the right tactics to use in business. You should be fair, otherwise you all end up falling out along the process.

Yeah, that's true. Build your model and stick.

Yeah. Also be honorable and do the right thing. And if it's as it says, that's the price we're happy to pay and do the deal. Unless there's something outside your control. Obviously, Covid was really difficult because we had deals that were in a pipeline that overnight nurseries were closed to most of the public. It was like, we're going to have to put that to one side and pause it. But that was naturally the deal sort of M and A platform happened in every sector. A bit like that during COVID That's true.

That's interesting. You're right. There's these places where you may want to walk away from the deal. Currently you're growing. You mentioned expanding internationally.

Yeah.

Can we talk about that? Teach me the playbook. I feel like that becomes the big stretch for any organization, is to grow into other countries.

We have grown internationally yet, though, all joking aside, England and Wales operate different childcare models and we have seven nurseries in Wales, a part of our group. And part of the reason for doing that was there's a different structure in Wales of how nurseries are governed, how they're regulated, how they're set up. And I thought that was quite important, that before you start getting on planes and flying off to other parts of the world, it was important to actually see what it was like to do that in. In a different sort of environment. And we've done that mainly. A lot of it's been research, looking at other countries, looking at their models, looking at who the big players are looking at. Is it government backed, is it funded, what are their challenges, what are the advantages? And we've not really sort of moved hugely forward yet. We're looking at some opportunities through deals that are coming up. But for us, this is something that we've done now for 17 years and it's worked and it's been tried and tested. And actually the next phase is for us to grow internationally because there's still a lot of consolidation in the UK to be done. But you could be doing that on an international platform, which is what we want to do.

Yeah. How do you think through that? It's almost like you have to research this whole new market. You have to think about what's your approach going to be? Are you going to put a local team there to support these?

Yeah. So it's probably not hugely different to how we started. It's different in the fact that obviously unless I was going to relocate or someone was going to move there permanently, you'd need some form of team and that's important. But I think for us, our start of international expansion will be through a platform and an acquisition of some kind of size that will have some team that then will be supported by our UK head office to start with. And then obviously you see how that gets in terms of scale and whether or not you need to then replicate that in the country that you go into.

That's a good way to do it.

Yeah, there's huge opportunity. There's other international players in early years that are out there and have done it already. It's sort of looking at what worked for them or maybe what didn't work for them and try not to replicate mistakes that they've made or trying to follow positives, a lot of that.

Do you network with other roll up platforms?

And I did quite a lot of networking with other groups, particularly in the uk. Some of those would have international presence as well, particularly because of the sector that we're in, because a lot of it is driven by regulation in the uk. It's driven by the government and the Department for Education. We do have to work together because actually you need a strategy to make sure that as governments come and go, that there's a sense of overall what people are looking to achieve and also having a voice because it's so fragmented, our sector having a voice so that the sector is heard as a whole. So for individuals who have one nursery, it's much harder for them to have that voice. But the reality is we'd all have the same challenges, struggles them, just more in a more isolated way, being a single setting.

That's interesting because you've taken it to a point where you've really built your brand around being a reputation for how you operate your nurseries.

Yes, that's true. But it's not just about doing it really selfishly. It's about as well trying to do good. This is a sector where we're looking after children. So actually it's really important that we're all doing things in the right way. And actually governments, as they change, understand challenges in the sector. They understand workforce issues. They understand how sometimes political decisions can make it harder in your sector in terms of workforce, et cetera. To be fair to government, lots of people who go into government aren't people who've worked in businesses. So it's important that you have that quick education piece that means that there's a strategy and a longer term plan. Otherwise you're done to rather than helping work together on things.

That sounds like the right way to do it. I wanted some advice if I was gonna roll up. I don't want to compete with you. That's gonna be too tough. I think it'd be fun to roll up the dog and cat nurseries.

Yeah, Doggy daycare.

Let's do that. Let's do roll up the dog. What's advice? You know, just to guide me. I kind of picked your brain already and I've gotten a lot of things I need to focus on. Anything that we missed or of like, hey, make sure you pay attention. These things you go pursue this goal.

The most important thing in a multi site business is having the right manager on site. You have to have someone who is your ambassador in each location that makes sure that all the things I'm talking about are done properly. If you've not got that right person, chaos can take place without you knowing it. I think that's key. It's making sure that they understand what you're looking to achieve and make sure that they're implementing it properly. Whether it's a doggy daycare business or a cat business or whatever the same principles stand. As with any business, it's checking, supporting, auditing and having that structure in place that supports from a higher level. And that for me is what I learned as our business grew. That was really important. And that's what as we've scaled up what has been the key reason for our success. I believe in terms of being able.

To scale people and process. That's a good point. You really gotta put a big emphasis on it. That's all it comes down to is being super proactive on all these.

Yeah. And not assuming that people just do things. There is an element of having to check as well, because people often tend to do the things that you talk about the most. And if you stop talking about them, they start to think, oh, that's not important anymore because we're not talking about it. And I sort of learned that even in jobs prior to Kids Planet, I had managers who I knew what they were going to ask me, and I knew what they wanted the answers to. So make sure you have the answers and you know what you should be doing. That's really important. Doing a lot of these things make your life easier because you have happy colleagues, you have happy children and parents. So actually you have less problems or complaints or hassles. But I think also as well, it's listening. If things don't go right, what's really important is listening and trying to unpick what might have gone wrong and understanding that and actually evaluating on that and using it to make things better.

That makes a lot of sense. Just picking and being proactive on just leadership in general.

Yeah, a hundred percent. And I hate it when I hear people say, oh, no, we can't do it that way. Can do anything anyway. You just have to reflect all the time. You can always make things better. Nothing's ever so rigid that it can't be changed as long as it's changed for the right reasons. And that's what. Even in a business like ours, that's gone for a long time, you can't just stay the same all the time, because change happens through everything that we experience all the time. We have to adapt.

Big part of it. That sounds like that's been a big part of your journey.

Yeah, yeah.

The platform.

Yeah.

Larry, what's the craziest thing you've seen in M and A?

Some people use businesses as lifestyle businesses. I've seen some crazy things put through people's accounts that you think, wow, gosh, from school fees to all kinds of things. But that's sometimes where you think, gosh, how are people operating like this? Where they have lifestyle businesses? That's the kind of deal sometimes, truthfully, that is difficult for us to ever entertain being part of because you look and think this is a bit messy and it's too complicated for us because we don't operate like that, never have done. So. Yeah, they're the kind of things that probably are more messy sometimes. We've had owners who might want to stay and we. That for us, doesn't work because I think it's really difficult to have an owner still being there because often people don't like the change that you might bring in.

Interesting.

Different people have different approaches in their business model. For us, we've always chosen that the seller exits and that's just the way that we've always gone.

That's interesting because you're changing their model so much that it's easier for you to do it without them.

It's not even just changing the model so much. People get upset. Even if you bring in new resources, then you get rid of resources and things like that. And toys. I suppose it's a bit like if you sell your house, you don't still live in the house while the new person comes in and redecorates. Because you might think, why are you replacing my walls and my carpets? I love them. I did that and it was. I was really proud of it. I suppose it's just sometimes people can get upset with little things.

Yeah. It's a real different way of looking at it.

Yeah. Yeah.

Claire, this has been a great conversation. I enjoyed it. I learned a lot. You've helped me become a better M and A scientist.

Thanks. It's been great. I've really enjoyed our conversation.

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