Revolutionizing M&A with Power BI and Real-Time Data

Mark Smith: 0:14
Welcome to the Power Platform Show. Thanks for joining me today. I hope today's guest inspires and educates you on the possibilities of the Microsoft Power Platform. Now let's get on with the show. In this episode we're going to be focusing on innovative ways of using Power BI. It's kind of like a case study that we'll be covering. Our guests today are from the United Kingdom. We have Ian Fishwick he's a chairman of Airband and we have Sam Godfrey he's a director at Evolution Capital and so I find, when I chatted these guys originally very interesting space that they're in and so hopefully you enjoy this as much as I do. You can find links to their bio and social media etc. They'll be in the show notes for this episode. Welcome to the show, ian and Sam.

Ian Fishwick : 1:15
Lovely to see you. Let me introduce myself first. My name is Ian Fishwick. I've done 43 mergers and acquisitions in the uk tech industry. Right at the age of 42, I set up a business in a spur bedroom with not a lot of money and eventually I sold it in a 100 million point transaction. Uh, I have the honor of being named uk chief executive on three occasions, right, so I've been around a while. Recently. I decided it's about time for me to swap sides, so to to speak, and I've now actually joined Evolution Capital because I want to take the experience of a serial acquirer across the corporate finance guys and I want to help the next generation of serial acquirers and also the people who want to sell their businesses and maximise their exits.

Mark Smith: 1:52
Nice, nice Sam.

Sam Godfrey: 1:55
Yeah, good to speak to you again, mark. I'm Sam Godfrey, transaction Service Director, evolution Capital. Evolution Capital is a corporate finance transaction services firm based in London in the UK. Our team over the years have done many of the acquisitions, buy and build strategy with the adept, which is the business Ian sold. So Evolution Capital have got a long history with Ian having done circa 17 acquisitions. That's finding the shareholders, advising them through and advising Ian on that sale. My background before Evolution Capital was PwC PricewaterhouseCoopers where I spent the first decade and in that was really focused on buy side financial due diligence there and since coming to Evenish Capital four years ago, been growing that revenue stream in the business. Ever since Just looking at three years ago that revenue stream was sort of we've grown it over 400% in the last three years there and that's been using innovative ways like the Power BI and the EC Analytics which we're rolling out.

Mark Smith: 3:01
Awesome and I'm looking forward to drilling into that. Ian, before we get into the details of what you're doing in this M&A space and the challenges that both buyers and, I suppose, sellers have in this space, can you tell us a bit about food, family and fun? What do they mean to you, the things that you do outside of your professional endeavors?

Ian Fishwick : 3:23
Hi, I'm blessed by being married to an extraordinarily good cook, so when you say what's my favorite food, you had that debate earlier. So I've decided to go for cod fillet with haricot beans and chorizo and probably a white wine broth. Beautiful, beautiful. And the bit you probably don't expect as a finance guy is I paint abstract art which is distinctly Marmite.

Mark Smith: 3:46
Wow.

Ian Fishwick : 3:49
They're not on the wall behind you then no, the one on behind me. The two family events. The TV one is the first my daughter. It's the first time she got credits on a national TV programme. The other one was my other daughter was a Guardian journalist and she was the first member of the family to be credited on the front of a national newspaper. So it's 200 bits of family history.

Mark Smith: 4:08
I love it. I love it Sam food, family and fun.

Sam Godfrey: 4:12
Yeah, all very new to me. So actually now got two children under three years old. So if you're looking at the food element of life, nowadays it's whatever the kids will eat, we'll eat. Gone are the days where, oh, it's been a while since me and my partner have been out for some tasty food. So you know, we're living that life. Obviously that's been a big adjustment for me, but what I'm thoroughly enjoying. So, yeah, I've got an older daughter, younger son and that is the chaos in my household. Outside of that, still managing to keep up, moved away from the life of Saturdays, going travelling, playing football in the UK, more to the longer, solo endurance sports now. Now the Saturdays are a bit of a write-off. So did a half Ironman in September with another one planned for April time. So that's what I'm keeping myself busy for outside of the family. So family and half Ironmans, that's enough, and work, that's plenty enough at the moment.

Mark Smith: 5:10
All righty, I know what you mean, with the young kids Mine's four and two at the moment. So, yeah, I know what you're talking about. Tell me about the challenges of the M&A process that you've seen, that you've experienced, and how are you trying to bring more clarity, more insight, more informed-based decision-making, particularly for the buyer, in this, this scenario, ian yeah, let me pick that first and then some can perhaps answer.

Ian Fishwick : 5:43
When I sat down with these guys and talked about what are the things that have frustrated me as a serial acquirer or, you know, looking back, what would have been helpful if I'd had it at the time. Financial diligence is that boring but incredibly important bit where you actually check out whether the guy who's selling you the business, it is actually what he says. Am I buying what it says on the tin? And it's one of those things that's never really changed in the last 20 years. Perhaps probably the only thing that has changed is the PDF. Reports are getting bigger and bigger and bigger. I'm seeing reports now that are several hundred pages and, yes, you can go home with your highlight pen over a weekend and highlight all the bits. But then you got the problem of you know you've seen it somewhere, but where was it? You know, if I want to remember what's the margins on product b, you know you go hunting through these documents you think, oh, phone, it's on page 184.

Ian Fishwick : 6:34
I don't want to do things like that anymore. I want interactivity where I can ask the data questions and just get the answers straight away. It's the first point. The second point is everybody provides these as static PDFs and therefore, by the nature, it's only presented in one format, and that's the format that the seller wants to show me things in. But that's not how I really want to see it. What I want to see is things in the format of my management accounts so that I can do the really simple stuff and say well, I sell that product and I get these margins.

Ian Fishwick : 7:07
Why are they claiming that? And particularly if I'm a serial acquirer, if every time I try and buy a business, the information comes to me in the same format. It doesn't make life easy and you've almost industrialized the process. But the other bit is deals always slip, they never go quicker than you think, they take longer than you think and therefore sometimes you start there thinking you know, I'm looking at a pdf report here and this information's probably four months old.

Ian Fishwick : 7:34
I want to understand current trading, so I want information, really, that's automatically updated, so I can see what the current world looks like. And when I talk to some of the team, that kind of thing just doesn't exist in the world of financial diligence, despite the fact that some of the bills are in the hundreds of thousands of pounds. So I gave a challenge to some of the development team in Albania to say, look, is this a pipe dream or can you do what I'd like to see? And the response was part of the reason why I agreed to join them. To be frank, after that intro, sam, you better be good yeah sam.

Sam Godfrey: 8:12
Yeah, well, as ian said, he reads the reports. I'm the one who used to have to write them, so I was like I don't want to be doing, you know, doing volumes of them. I've done FDD reports in the sort of 600 to 700 pages FDD.

Mark Smith: 8:26
What does that stand for? That's for the listeners who want to make sure we yeah, financial due diligence.

Sam Godfrey: 8:32
So that is us coming in and you need to therefore start, as Ian says. You need to therefore start and, like as ian says, you need to analyze the business in every way that you haven't seen already. You know that, that's that's, that's the trick of it, you know, and and taking out the friendly seller side, adjustments in there. But if I come on to what I would do, I've got a global business. I've got 36 entities. I've got it in in asia, australasia, I've got it in in north america and I've got it in North America and I've got it in Europe. I've got different currencies. I've done those reports where it's 150 pages per volume, per region, and that is as soon as he doesn't want to read it. We don't want to be doing that anymore. But to really counter that you need to.

Sam Godfrey: 9:14
We had to adapt and adopt these new technologies where we can have a much more simplified, streamlined platform, which is the ec analytics platform is what we run it off where you can drill into all of these areas you can have, you can set up the data and the mapping and the structure of all of it, where you know, do you want to see the same analysis in one platform for north america.

Sam Godfrey: 9:37
We'll select that, you know. Select those filters, select which revenues you want to see the same analysis in one platform for North America. Well, select those filters, select which revenues you want to see on, and then you can follow the whole Power BI platform with all those sets so you can start drilling into the data, knowing exactly where you are, how to go back to what you want to see and start looking at one area of the P&L, one area of the revenue, the product mix of the revenue, the product mix across, whatever it is you want to see, right, rather than having to rely on flicking between volumes, going from page 26 to 226 to try and get the same message, but from a from a different angle. Right, you want to bring that all onto one platform, and that's where that's what I know makes our life easier, where that static view gives you what you either they want to tell you or what is easier for them to tell you, without any drill down ability to you can go find the answers yourself.

Ian Fishwick : 10:30
Um, so yeah, if you look at some of the classic questions that I would ask is where does this company actually make its money? And hunting to try and find out is quite difficult, whereas if Sam can just press a button and say, shall I just show you on a VDI display immediately, then suddenly it's like right, okay, those two countries are tiny, let's not bother them, let's go for the big ones and start to have a look. So the ability to sort of jump very quickly to where the important stuff is has been hugely beneficial. Explain the example we were talking about, where there was the company that was claiming growth in Europe and then in reality it was Spain.

Sam Godfrey: 11:12
Tell that story Because this involves more of the overall power tools that Microsoft offers here. So the way we approach this entity is, for business turning over $30 million it was at the time uh, their management accounts had sort of two, two revenue streams sales type a, sales type b. It doesn't tell you anything about how you really want to understand the business. So one you need to have the tools available to remap that whole business from a transaction upwards. So therefore we're not relying on management accounts. We are taking granular transactions of the business, which we could that business was about, you know, 480 000 rows of transactions for one year um, using the tools like power query, uh, power pivot, etc, and also all tricks there, to sort of fully recreate the pnl. And then, once we can fully recreate a pnl, or if we do it to that most granular level, we can add whatever mapping a chart of account we want to these, these transactions. We don't have to look at what the management have given us. We can map it to anyone we want that, what do we call these products? And we can do that in very sophisticated ways. Then you can upload it to power bi and you can start seeing this whole business on the brand new chart of accounts by the vendors because we've gone in from transactions and they were claiming growth in this don't get too technical, but it's sort of a special specialist cyber security managed service offering and they were claiming growth in that in that region. Um, now we've mapped all the transactions.

Sam Godfrey: 12:44
I could quickly go into it and filter for that type of transaction. I can get all my revenue, gross profit, uh, profitability analysis, detailed product analysis on that stream. I don't have to do you know it's 14 pages in a report just on that stream. I can just click a button, it's all in front of me. Then we can quickly see all the growth was coming from Europe in one month. So then I can go into Europe very quickly on the revenue view and I've set my parameters and I can quickly go to the customers.

Sam Godfrey: 13:15
The five bits of analysis, five different sections on customers and it's all Europe. The cybersecurity managed service revenue stream is already set. So we immediately saw they had one strong month in a Spanish customer that didn't come back very quickly and it completely changed. And then you can normalize that and you can completely change the actual profitability. And then we go to the next level where we can set those normalizations and build that into Power BI. So now we can look at the whole business, with or without that particular aspect to it, and those aspects can, just you know that can go from five aspects to ten aspects. How much do you want to cut this business to really actually sort of see the underlying trends?

Ian Fishwick : 13:56
and that's something that it all gives us I think one of the bits that's changed with this kind of technology is I used to spend my life reading numbers. Now I spend my life looking at pictures interesting because I can see straight away.

Ian Fishwick : 14:11
You know when I ask some things like show me customer concentration, and a map comes up. You know, with different size circles telling me where the revenue is. They get okay, it's mainly London and there's a tiny bit in Scotland, right, and we can analyze it not just by geography, but things like products. Let's take the Microsoft call here. Everybody claims to be great at Microsoft. We can now analyze it by vendor as well. To say forget what you're claiming, you're not buying anything from Microsoft. Your website tells me what you want to be, not what you are. You can't tell me what you are. So the ability they can slice and dice and just sit next to something like me and I can ask questions and then go ping, ping, ping. It's absolutely revolutionized the way this whole process works.

Sam Godfrey: 14:59
In the past to look at the vendors. Typically you may have a 50 to 100 page section on vendors where the power bi allows you to do many other things. But this is if you've got now a deck of 20 bits, of 20 sections of analysis, rather than your 700 pages, you can set which vendor you want and then at the on the inputs tab or on one of the tab, then you can look at the whole sort of style of the report just on that vendor. All the relevant analysis to that vendor you know very easily and all you need to do is click to the next one and you can start that journey again and actually take far more control over how you analyze business and just the speed and efficiency of which you do it, let alone how quickly it is to update the numbers.

Ian Fishwick : 15:45
Let's take that point of speed and efficiency, because the building API is straight into the raw transaction data of the seller. It's also massively updated straight away, so you're always looking at the current stuff so you can see whether the last quarter has been good or not In terms of de-risking something. Before you sign a check for millions of pounds, you want to know what happened in the last couple of months, not what happened necessarily last year. So this is very, very different. It just shows you in a way that the developers and the Power BI guys are becoming more important than the accountants. Sam will hate me saying that.

Sam Godfrey: 16:23
I get accountants who are good at Power BI as well. That's the skill. That's what you want.

Ian Fishwick : 16:29
That's the real skill right.

Mark Smith: 16:32
So a couple of things come to mind. Number one is trust. There's one thing about handing over a lockdown PDF document. There's a whole other thing about going. Here's a whole bunch of down-to-financial transaction data um being handed over between the buyer and the seller. Is it just due to their motivation levels on each side that the there's a trust to go? Hey, we're going to give you this data and then you know. My first thing is how do you know that this is the primary set of books and not the secondary set of books of that? That data? Because you know data can really allow you to tell any story that you want and how it can be manipulated. That element of trust, how do you factor that in in these type of deals to allow you to move forward?

Ian Fishwick : 17:18
Okay, so let me take that. As a serial acquirer, let's role play. I'm buying your business mark for a minute.

Ian Fishwick : 17:25}
Okay, the best way for you to to maximize the value is to be open as possible with me and show me how you make your money right uh, and therefore you know if I'm not serious about buying it, I'm certainly not gonna go as far as trying to build, build APIs into your systems to analyze it. I've got to be really serious to do stuff like that. And if you ask me, of all the deals you did, how many did you pull out of? I did 43 and pulled out of one and that sort of told me a lie. You know what I mean, so you can build that trust.

Ian Fishwick : 18:01
But also, at the size of deals we're doing, where the businesses are selling for between like a million and 50 million, uh, nobody's clever enough to have two sets of books with, you know, 400 000 lines of raw data. That's just too difficult, right? So the fact that they're going to let you have access to me means that you also know that you're getting access to the real stuff right, so you've you've answered one of my questions there, so you're APIing into the seller's system.

Sam Godfrey: 18:29
Yes, we can. Yes, with certain permissions. Yes, also, where we obviously advise sellers as well. So yes, to get all of their information when we're actually engaged by the seller. Yes, we'd be linking into that and that is obviously saved huge in terms of efficiency and productivity.

Mark Smith: 18:47
Yeah, One of the questions that I have in that process is that a seller has a way of looking and you know they're going to sell like anything is sold like it's amazing, right? This is why you know. And then, of course, the buyer. They've got a different set of data that they I suppose they want to look at ian. How is that then sped up, I suppose, and made it more um, robust the acquiring process, to be able to look at it from the dimension you want to look at it, rather from the seller's dimension the first place it is as a serial acquirer.

Ian Fishwick : 19:25
It's probably likely that my accounts are in more granular detail than somebody who's selling to me. So by doing it this way, we often show sellers what their own business really looks like in a bit more detail than they're used to, which allows us to have a proper detailed conversation to say, look, let's do customer concentration. We can just press a button and say, guys, but your top 10 customers are coming for 75% of your sales. Let's now talk about are these contracted in or are they not? It allows us to drill down and have a proper detailed conversation. So once you've built that trust, uh, you're a lot more confident of paying a sensible price.

Ian Fishwick : 20:10
If you see what I mean, because you know what you're buying. You know if you're not certain but you kind of like it, then you cut the price back a bit. If you can see it properly and think, actually I can prove to myself why. Now you know. I can see, for example, that only one customer is left in the last six months. You know, once you can take those things, then you are going to pay more money for those things and once the seller understands that, then you develop that trust. Some people think it's about trying to trip you up and find things to chip the price. If you're a serial acquirer, you can't be a bad guy because people talk about you. You have to keep a good reputation as being professional people. Sorry, sam.

Sam Godfrey: 20:53
No, yeah, and I think the emotions at play here they're hanging on getting millions of pounds as soon as I'm involved.

Sam Godfrey: 21:03
You're looking at maybe two, three months of horizon to when it becomes a reality for them, and so the willingness there to open the doors is is, you know, they almost feel like they have to to a certain extent, and the way we approach it now with with the ability to use these tools and how we do it, we, we just we're just able to bypass a lot of the stuff they're saying to us or a lot of their more high-level information, and just get the underlying transactions and build it ourselves. Because I can find out I don't need them there. I can find out 80% of the answers myself, and you're normally talking to someone who probably a shareholder, who may not be the most financial. They may have an FD or a financial controller, but sometimes they may not even be involved in the process for a sensitivity reason. So you're talking to someone who's not always financial as well. Sometimes it's just within their best interest to let us get to the answers ourselves.

Mark Smith: 22:01
You talked about two to three months there. Once you're involved, that seems a phenomenally short turnaround time because you know, in the research I've done in this space, it can be, you know, upward of 12 months for a deal to get anywhere. Is that part of the outcomes that you're seeing? That having this tech allows you and Ian from your side to acquire even faster and do deals in a more rapid, in other words, even see more deals because of this tooling than what you could do five years ago?

Ian Fishwick : 22:37
I'm pausing because I was very fast at doing deals anyway A lot of the gap you're talking about is getting to heads of terms.

Ian Fishwick : 22:44
Once you get to heads of terms and an outlier agreed price, subject to checking stuff, then it's in your incentive to help the students as fast as possible. So there is no doubt that from a seller's point of view, this helps you do it quicker. But from a buyer's point of view, sometimes it's the deals that you don't do that are ones that are the important ones, you know. You know you mustn't blindly buy everything, right, uh? And this allows you to get to the crux of should I do this or not? Very, very quick. Nobody wants to wait months on end and then go.

Mark Smith: 23:16
Actually I don't like it yes, you don't have burned time right no, and the seller doesn't want to mess about either.

Ian Fishwick : 23:22
You know, because if I said you know, if I'm buying new business, I said to you, look, we'll know the bulk of it in a few weeks. Now you will be able to see it and then we'll be having proper detailed discussions about tell us about this specific contract and, you know, a proper grown-up conversation about the business. But but getting to the kind of goal no goal decision, if you like is much quicker now it's a lot quicker.

Sam Godfrey: 23:43
It's when the process goes on. It's a hell of a lot quicker to make sure we're up to date. But, to your point, around 12 months I was talking when I come in on for the buyer to tear it apart for my two month period and they've got the next four weeks to complete it. If it's all stacks up. What they say is when you're preparing the seller, it can take 12 months depending on how ready they are. Um, but we're still using these tools on the sell side because we'll still want to deliver a platform to a select number of buyers to give them that more transparency earlier. Because if we, if we apply the same tools and the same method to the sell side, there's nothing I don't really know anyway and we try to. Where we speed it up is once we're happy with the level of preparation and the platform. The power bi is there. We can. We can let people access it and make that transparency early. So it speeds that process up for the, for the buyer.

Ian Fishwick : 24:35
Can I just tell you that point that's a really important one right. Very few people build a business and sell one more than once. You just don't have time right and that means that there's always an experience balance where the serial acquirer has done it loads of times and you might be selling your baby that you've built right once and therefore you have no experience of exit planning, whereas if you can bring this kind of technology in and really understand your own business, you know for six months and then know how to explain it to other people. Well, nobody would sell a house without doing a bit of decorating and tidying up first. Totally, totally. They didn't make that mistake with a try to sell a business.

Ian Fishwick : 25:15
So this is a bit like that decorating and tidying up and presenting it in the in the best foot forward, and that's how you maximize your value. That's how you maximize the value of a house. You know you presenting it in the best foot forward, and that's how you maximize your value. That's how you maximize the value of a host. You present it in the best way.

Mark Smith: 25:27
So you've talked about. If I was to summarize, what you're doing is data insights allowing you to drive decision-making, which a lot of organizations. Their data is not in a structure that is being used for insights. They've been collecting data, but not necessarily as you say. They haven't done the housekeeping, they haven't cleaned it, they haven't mowed the lawns, got the decorating done. Tell me about you know? This is my final question. Is the impact of the solution that you've built, being able to access the data to get to the point that you can make informed decisions, or the seller can make informed decisions on the state of their business? The buyer can make an informed decision what they're going to acquire. How has the technology moved the needle?

Ian Fishwick : 26:11
Do you want to say something, or me?

Sam Godfrey: 26:13
Yeah, I can kick us off there. I think again, I like to pitch to Power BI as right buyer client. I want to give you more control. As right buy a client, I want to give you more control about how you actually want to go about doing it yourself. We can set it all up. We can slice it any way you want.

Sam Godfrey: 26:31
Do you want to look at this business has made acquisitions right? We need to filter quickly. Look at the existing business that was there. Look at the acquisitions that have come on. You need to be able to do that very dynamically and then pass it over to the buyer and give them the full control over it. Uh, just to the point we're making earlier with the, with the power query and all the mapping tools we can use and get into power bi, changing it and making it into someone's chart of account is absolutely vital to speeding up so they can actually see if they overlay this into their business. They can see exactly what it's going to do for their organic growth, you know. Thereafter it's going to see exactly what impact it's going to have on their pnl. There's all sorts of ways this tool is is speeding that up and giving being able in us to give the buyer full transparency a lot earlier in the process.

Ian Fishwick : 27:20
Uh, in a way, they actually truly want to see it, and giving them control to change it thereafter is really what it's doing I think one of the key impacts mark is, as an advisor, we'd far sooner work with a serial acquirer who's going to do three deals a year than having to find three different clients who want to do one deal a year. So I think we'd all like to do that right and to go to somebody and say, look, once you've done one deal with us, you've got your head around, we've built a platform for you and they're all going to look like that. Then the incentive for them to stay with us on the second deal, the third deal, the fourth deal, because we've mechanized the process, right, uh, rather than to pitch for every single job that we do. That doesn't half help, right? So in some respects, we're a serial acquirer's dream yeah when we've done it for for buyers.

Sam Godfrey: 28:07
When we're on the third one, you know it gets to the point where we can just on on the platform overlay acquisitions we've got in their chart of account, we've got in the pnl, their, their fd recognizes. We can just layer in each acquisition onto their own business, into a platform and we're moving it a lot more into helping it with as a portfolio tool for them so we can put their business into it and as soon as we're looking at for example, if we've got their business in a Power BI and we're looking at two or three acquisitions we're not sure which one we can remap them and actually layer it over to their business so they can see directly which of these acquisitions is going to make the most impact on their business and then you can have far more informed decisions about which one's actually really going to have the greatest impact for them to go ahead with.

Mark Smith: 28:53
Incredible, amazing what you've done. You know, using the technology here in this case, microsoft's technology to build this out. I tell you what, though in everything case, microsoft's technology to build this out. I tell you what, though, in everything that you've said, I think, if you can download Ian into an AI agent and then allow that to run at pace across deals, I think AI, where you've got this far, let's say, in what you're doing I think you're going to go into the stratosphere when you add AI into the mix.

Ian Fishwick : 29:24
Can I have a better looking version?

Mark Smith: 29:28
Gentlemen, it's been fantastic to have you on the podcast. We'll put links, et cetera to where people can find you, start conversations with you, et cetera, and what you've discussed. But thank you so much for coming on. Lovely to see you. Thank you, mark. You've discussed, but thank you so much for coming on. Lovely to see you. Thank you, mark. Hey, thanks for listening. I'm your host business application MVP, mark Smith, otherwise known as the NZ365 guy. If there's a guest you'd like to see on the show, please message me on LinkedIn. If you want to be a supporter of the show, please check out buymeacoffeecom. Forward slash NZ365 guy. Stay safe out there and shoot for the stars.