I would describe a typical Westbridge deal as a primary buyout alongside the management, with or from the original entrepreneurial founder, in a niche, high growth, UK based B2B business that is generating between £2 million and £5 million EBITDA.
We are highly selective when choosing the businesses we would like to work with. As such, we like to meet with many in order to identify those in which we would like to invest.
Most of the deals we are interested in are based outside London, unlike the majority of our investment team. So how do we ensure that we see the deal flow we need when most of our target opportunities are based and advised outside the capital?
Our approach has always been based on the ethos of ‘the power of presence’.
In simple terms, by being an evident part of the local deal scene by spending as much quality time in local markets as we can, something that historically, London only based private equity houses have struggled to do in regional markets.
As years of prior experience has shown and COVID has most recently reaffirmed, there is no substitute for regular face to face meetings with colleagues and contacts in the many local UK deal communities. As efficient and effective as Teams and Zoom calls are, all the recent time spent in lockdown has just underlined to many the intangible value of the physical meeting. The relationships that result from these continued and wide-ranging interactions help to build trust and understanding, provide regular progress updates on what and who each other has been seeing and transacting, spark ideas and introductions and most importantly generate deal flow. These relationships are further developed when as many local advisors as possible are involved through any resulting deal process, something which we are very focussed on at WestBridge.
This approach has always required discipline, dedication and commitment - not only in arranging the meetings but getting in the car or on a train (not always easy at 5am on a bleak winter’s morning) and spending significant time in the many different locations across the UK on a regular basis. It is often easy to let this slip particularly when busy transacting a deal elsewhere, but this is often when it is most necessary to keep it going as it will build the pipeline for the future.
Two significant recent factors will help us to develop and re-enforce our commitment to this ethos. The opening of our Manchester office in late 2019 was born out of this idea, providing a foundation for our presence across the North and access to the vibrant deal communities in Manchester, Leeds and Newcastle to name a few.
It also provides the team with a base to work from when applying our approach and when transacting local deals, in turn allowing more of our team to develop strong relationships with the local deal communities. Furthermore, the technology advances driven out of the COVID pandemic will enable more efficient working while on the move and allow us to spend even more time around the UK.
After 18 months of restrictions, I know that getting back out and about is something many of us are looking forward to.
WestBridge partners with management and typically invests between £10m-£25m in established, profitable and fast-growing UK SMEs with enterprise values of up to £50m. We are always keen to hear from ambitious management teams seeking acquisition funding, support for a management buyout or development capital. Our WestBridge value creation methodology seeks to partner with management to optimise business growth and outcomes for all shareholders. To hear more about our investment criteria or discuss the suitability of a company, do get in touch.