June 5, 2025 • 26 mins
In this episode of Business Buying Strategies, Jonathan talks with John, a long-time acquaintance and experienced professional in mergers and acquisitions.
John shares his journey of acquiring six businesses with a combined annual revenue of 6 million pounds, detailing the various strategies and tactics he employed, including using the cash reserves of the acquired businesses to fund their purchases.
He emphasises the importance of accountability, transparency, and understanding the financial aspects of a business to ensure successful acquisitions. John also highlights the value of a deal fee and the benefits of deferring most of the consideration payments.
Key moments
00:49 Meet John Hood: A Successful Business Buyer
02:36 John's Journey: From Consultancy to Business Ownership
03:08 The Importance of Accountability in Business
04:23 Exploring John's Business Ventures
06:00 Using Business Assets to Fund Acquisitions
09:41 Negotiation Tactics and Strategies
12:20 Case Studies: Successful Business Acquisitions
19:49 The Deal Fee: Paying Yourself First
21:47 Consolidation and Future Plans
24:42 Final Thoughts and Advice
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If you are looking for a lawyer in the UK to help you get the deal over the line, then use my own lawyer, John Andrews. You can phone his office at (0345) 2412494 or email him at johnandrews.deallawyer@jmw.co.uk.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:29):
Hi, this is Jonathan Jay, and welcometo Business Buying Strategies,
the number one podcast for peopleinterested in buying a business
without risking any of their own cash.
Now, every week I interview peoplefrom the world of mergers and
acquisitions, specifically peoplewho've been on my mastermind program
who've gone out and bought businesses.
(00:49):
So I want you to meet John Hood now.
John was a guest at my Deal MakersLive event in January, two days of
Exceptional Deal Makers in a roomwith a hundred people answering your
questions about business buying.
Now at this live event, John told us allabout his six businesses with 6 million
(01:11):
of annual revenue, and he says it'sall my fault if he hadn't read my book.
Listen to the podcast,watch the YouTube channel.
He never would have done it.
It's a great interviewand I hope you enjoy it.
We've known each other a number of years.
Yep.
Go back a while.
We do.
And you actually said when youwere putting the microphone on over
(01:33):
there, you said it's your fault.
Which was an interesting wayof, what's my fault, John?
It's your fault that I've got acurrent buy and bill with a sort
of 6 million pound revenue and.
Five independently ownedentities, completely your fault.
And I definitely wouldn't havepatented without you a fact.
So even though I've been in the mand a space for longer than I care
to tell you all, but a long time, youknow, 30 years or so, and I'm pretty
(01:56):
experienced in buying and selling stuff,either myself or helping other people.
And I have known Jonathan A. Long time.
But that's sort of unconnected.
'cause we go back to hisMarketing Guild days and so on.
But when I, which was thebusiness I referenced earlier,
that was the acquisition fromthe capital group and the, yeah.
So yeah.
So tell us about these five.
So, so I didn't realizethe other number though.
So it's 6 million.
(02:17):
Yeah.
Okay.
Yeah.
Six, 6 million.
So there's six.
Six companies.
One one's been organically grown.
One, one was purchased out of apre-pack, not our original business.
One was a partnership that we purchasedthrough an SPV and the others were.
A sale.
Purchase agreements.
Basically a share purchase, sorry.
So yeah, share purchase agreement.
So, okay.
Brief story is in 2019 I was doing someconsultancy work for a couple of clients
(02:42):
of mine in, in their business, which theybought 'cause they thought it was a good
idea, but they didn't really know how to.
Structure it.
I ended up to come a long storyshort take buying it from them
or taking it over from them.
And so I had a business, whichwas the first one I'd had for a
number of years because I deservedbought and sold a few in the past.
And I think being around Jonathanand then ultimately joining his inner
(03:04):
circle to sort of fast forward ita little, made me more accountable.
So in any of Jonathan's training,you know, mastermind is probably
the best example where hemakes people very accountable.
You know, what are yougonna do in the next.
When you come back here nextmonth, you all gonna be the same
or you know, you gotta check.
And that we all need that in life.
You know, we all need accountabilityand we all need to have reference
(03:25):
points 'cause it makes us better.
Okay.
Can I, can I just interjectwith an example of your personal
accountability that you, thepressure that you put on yourself?
Yeah.
Which is by the nexttime I see you guys Yeah.
I will have completed on this business.
Absolutely.
Yeah.
'cause you don't want to come along and.
And not have done it.
No.
I think it's disrespectful to thepeers that you're working with or the
(03:46):
cohort you are in or whatever, and I'vebeen preaching that for so long that I
could hardly do it myself, but I didn'tnecessarily think through when I thought,
yeah, I'll buy another business by thetime we all meet again, or I'll get
to heads of terms on one or whatever.
I don't mean it wasn't thoughtthrough in terms of I could see I had
the deal flow and everything else.
What I mean is I didn't necessarilyrealize the animal that I might
(04:07):
build as a consequence of constantlybeing nagged backed to do it by
Jonathan, which is a good thing.
They're nice.
I wouldn't necessarily use the wordnag, but No, sorry, sorry, sorry.
Yeah.
I'm sorry.
I mean, professionallyencouraged peer pressure.
That's, sorry.
Yeah.
Yeah.
So, so, you know, that's, but that's beengood and it's, it's been interesting.
It's been a good journey and we'rehalfway through it, so I'm not sure
if we even said at the start, whatdo the, what do these businesses do?
(04:29):
So construction sector, mainly B2C,some trade stuff, but it's primarily,
think of it as home improvement.
So garage door company roofreplacement company, got one
traditional window and door business.
Well, so we've also got an aluminumfabricator traditional business.
So it's across that sector and we arelooking at all sorts of other areas.
(04:50):
To add in, to get themix across the group.
And, you know, it's, we are fairlyagnostic about what the company
is, as long as it's in the, in thatsector, in that sits in the area.
Okay.
So, so tell us about, just pick one ofthem and tell us about that one, one that
has some interesting assets took, I've gotterrible memory, so I've made some notes.
So, so in 2021, we bought the second one.
(05:12):
Having, as I said, having got abusiness and then deciding to go
off and do a bit of a buy and build.
Which I have done them before inother sectors, but not nowhere
near as aggressively as this.
And not using all the same tacticsthat I might have heard before, but
Jonathan reinforces so strongly,which made me certainly better
at it for sure, personally.
(05:33):
So we bought a business aluminum exextrusion business that manufactures
products for half a million quid in 2021or just over, and we paid a half a million
quid for it, but we deferred 200,000 ofit in round figures over three years.
And the 300,000 came out of thebank of the business that had been
established for 35 years I think.
(05:54):
And the owners had obviouslybuilt up a nice cash reserve.
'cause they like to look atit, you know, as people do.
Okay.
Let me interject there.
So this is a completely new conceptthat we haven't talked about at all
hasn't, I don't think it's come upat all today, which is using the
cash in the bank of the business thatyou're buying to fund the acquisition.
Which the first time you hear it, itsounds like the craziest, you know,
that just sounds like a mind blowingthat, how would that ever work?
(06:16):
So John, could you go into abit more detail about that?
So, although most SME ownersdon't understand this, once
you do, it's a lot simpler.
So assets are assets, whether they'recash machines or anything else.
So whatever's in the bankis an asset of the business.
If it's a limited company, it doesn'tmatter whether the owner thinks it's
his money, he's gotta get that moneyout at some level in some way and
(06:39):
attract a tax charge at that point.
So.
Cash of course, is different to profit.
So if you've got cash in the bank,that might have nothing to do with
the performance of the business.
It may just be reserves thathave built up over time.
So obviously it's an assessmentyou do and it's a conversation
you have to have in a certain way,which I think on your mastermind
(07:00):
courses you explain it very well.
And as long as that's had at theearly stages and not hidden, you
know, 'cause it's not a con, it'sjust part of the transaction.
It usually works pretty well for people'cause they realize they can release that
money or they can sell their business,including the value in that cash, but
pay the minimum amount of tax as well.
Yeah.
Because we've got obviouslybusiness disposal relief.
(07:22):
Relief.
Yeah.
Which, which allows, you know, 10% ofthe first million, used to be 10 million.
Those are good old days, but nowyou're still only a million now.
Yeah.
But it allows you to utilizethat cash and give it to the.
Give it to the seller andfor them to therefore pay
the lowest rate of tax on it.
It is pretty, you know, can't getlower than 10%, but allows you to give
them something of completion, whichmeans that the balance can be, in
(07:45):
your case, deferred over three years.
Three years over, over three years.
So it's a great example of buyingthe business without having
to use any of your own money.
You're effectively using theirmoney, but there's a benefit to
them because they pay less tax.
They're actually.
Ahead, aren't they?
Yeah.
Yeah.
I think it's important with stuff likethat, they go off and get a bit of advice
and hopefully they've got an accountantthat's competent enough to understand it.
(08:08):
'cause not all accountants areso don't, but assuming they get
good advice, so you know, it'sperfectly, once they understand it.
It's fine.
It works quite well, but it's the sortof thing you have to bring up very early,
I think, because it can cause distrust.
Otherwise, I think people, Andrewwould've done the same thing.
They have the conversation early on,whether it's 300,000 or 30,000, it's,
they still think it's their money.
(08:28):
The most important thing with allof this is to be transparent is
not thinking that's hiding it.
You know, until the last minute.
And then, so coming outwith it is a good plan.
That is not a good, it's to say,right, this is how we propose to do it.
That gets you what you want andallows us to buy the business.
Yeah.
And let me explain to you whythis works and how this works.
(08:49):
So you sort of, without being patronizing,you are educating, aren't you?
You are educating the seller on a processthat they would never have thought of.
No.
Unless they've sold a businessbefore, which is unlikely.
Yeah.
And I think just adding to thatbriefly, I think practice is important.
So if you haven't bought abusiness, you know, just get the
letters out and get on with it andthen you can practice on people.
And that sounds slightly unkind, butall I mean is get better yourselves.
(09:12):
I dunno, anybody in life that ever gotany good at anything without practice
yet people expect to buy a businessin five minutes by watching a YouTube.
Yeah, by watching a video.
Yeah.
So not likely really.
I mean, there might be a one in10 million chance that you'll
land on the one person that knowsless than you, but it's unlikely.
Whereas if you practice and you knowroughly what you're going to say
and you keep it formalized and youuse Jonathan's guidelines and steps
(09:36):
and so on, you will make it easy.
'cause you'll alwaysknow more than they will.
And that's always a benefit.
Yeah.
So if I could just say the same thing,but in a different way, which is, if
you know more about buying a businessand the seller knows about selling
a business, you're gonna be okay.
But if you're doing the spaghetti.
You know, making it up as you go along.
And the seller knows more about sellinga business than you know about buying.
(09:56):
Well, you are gonna beoutmaneuvered in that negotiation.
You might end up buying somethingthat without really realizing
what you're doing, and you'renot gonna get any trust either.
'cause you need a lot of trust in thesethings, don't you, formally to go forward,
both parties need to trust each other.
And that's credibility, isn't it?
To start with
(10:32):
it's also pr, it's professionalism,it's doing it in a professional way.
So tell us about a a another one.
Pick another one.
Yeah.
So we bought out of.
Well, we were going to buy in aconventional sense business in the
Northwest that we did some diligence on.
So following on from what othershave said, I think, you know,
it's again, Andrew, get to theheads of terms really quick.
(10:54):
We did that.
We don't really get involvedin arguing about prices.
We certainly never give any offers out.
All we say to people is,how much do you want?
And by the way, you're not gonna get that.
So how much do you need?
Which is one of.
Johnson's key phrases and we shut upand listen and we pretty much move
quickly because the price doesn't matter.
I think your other people are gonna getup here and think maybe tomorrow, Phil.
He's very soon.
(11:15):
It's not really aboutat that stage the price.
It's about the viability of thebusiness and what it's worth to
you and what you end up paying for.
It is a whole different ball game.
You know, you start with the heads ofterms that gets everyone else out of the
market from there on in, you negotiate.
That's when the negotiationreally starts, isn't it?
(11:36):
At the point of the headsof terms being signed?
Yes.
That's a good way, which is whywhen people email it, they're
gonna get 98 people to tell 'emhow they would've written it.
Y years ago I saw this, it was anAmerican piece of research about
negotiation, and it was somethinglike 97% of email negotiations fail.
So if you think you can negotiate adeal by emailing backwards and forwards,
(11:58):
you, you can't, and it won't work.
You need to be sitting downwith someone face to face.
I mean, zoom's kind of okay,but if you're gonna talk about
money, talk about it face to face.
Yeah, I, I agree with that.
I mean, I've never negotiated anyamount of money in any transaction ever
without looking somebody in the eye.
You've got to be clear about that.
'cause that's theintegrity in it, isn't it?
(12:20):
So, yeah, zoom's fine for introductionsand stuff, but yeah, key is we, so
we did this with these heads of termsof this particular business and we
unearthed a load of nonsense and falseaccounting and all sorts of other things.
Luckily, early on.
So this, you know, that have beenvalued by one of our infamous business
brokers, I think they're called by,you know, for 350,000 or something.
(12:42):
And it was worth probablyminus a hundred thousand.
So we said to the owners,this isn't gonna work.
I mean, this isn't for everyone,as Jonathan said, this isn't
gonna work, but we will help you.
And I think we help them bybasically taking the business
over by pre packing it.
So that is, we got a, a, an administratorin, tame administrator in inverted
comm who, who went through the process.
(13:04):
Of us acquiring the assets andwe paid a nominal sum of money.
You know, you don't getany warranties with that.
You, you are buying somethingunknown, but it's cheap.
You know, it's like going andtalked about his penny deal or,
but the key thing is you've gotan infrastructure to pop it into.
Yeah.
Because if you haven't, then.
Yeah, it's a lot of work.
It's an awful lot of work.
And this wasn't completely broken.
(13:25):
It was just being badly managed andclearly financially badly managed as well.
And back to the earlier point aboutit's so important to have your finances
in order and to understand finance ifyou're gonna buy and sell businesses.
So we took it over.
We did pay a deferred consideration,not a lot of money, but over four to
six months because you can still dothat even with distressed businesses.
Oh, is that with the ip?
(13:46):
Yeah, it is interesting.
'cause most people think you can't.
They think that because the IPwill tell you that you can't.
Yeah, the insolvency practitionerwill tell you that you've gotta,
you've gotta pay all the money.
You want all the money and,uh, best and final offer.
And you've got to, if we acceptyour offer, you need to, yeah, we
need to complete it in 48 hours.
And yes, you would have to complete in 48hours, but people don't seem to realize,
I mean, we had an, i we in that group,we had the IP come along to the group.
(14:08):
Yeah.
The, they're actually, they'revery open to that, to a payment.
Over, over time.
There's a few, so.
Caveats to it.
Yeah.
And they have to take thebest offer, don't they?
And that could necessarily be aslightly premium price to somebody
else's offer, but paid over alonger period of time, for example.
So there's more than one wayto do everything isn't there?
But I think we did that.
We took it over, sort of transformedit, got rid of all the rot and
(14:28):
the people that owned it who were.
Pretty, you know, we weren't doinga very good job, shall we say,
and, and put the management staff.
And as Jonathan says, we had the structurebuilding by then to take that on because
prior to that, we'd just taken on anothercompany, not a million miles from it.
So we had some of the crossmanagement skills and things
to be able to put in place.
So, so yeah.
So that, that was a sort of, that wasa 20,000 pound investment, but we paid
(14:50):
it over six months to give you context.
And that business this year willgenerate revenues of three quarters
of a million and maybe a EBIT of.
60 to 80.
They're not, these are not highmargin enterprises in this space.
You know, it's single digit.
So you, so actuallyyou've gotta have scale.
Yeah.
To turn some decent numbers at the bottom.
(15:11):
Absolutely.
Yeah.
Yeah.
And also because the single digit,because success and failure are
close, you know, you can be 3% thewrong way, or 3% the right way.
Success and failure canbe, you know, that serious.
So yeah, we did that one.
And I think the other one to.
Point out to you is where webought a business for, so I should
get the numbers right for, yeah,two 35 million pound a year.
(15:36):
These are all between 750 and1.2 billion pounds of revenue.
These businesses I'm talking about, whichis where you get your five or 6 million.
So that one was uh, yeah, 2 35.
We paid 155,000 poundson completion to the two.
Former owners as they are now.
And I think at that moment in time therewas 175 grand in the bank or something.
(15:59):
So we did have to put a little bitof money in for working capital.
'cause obviously we do a workingcapital assessment, but where did
that little bit of money come from?
From, from the group's resources,not from me, if that's what you mean.
Yeah, so, so for, yeah, from thegroup's resources and profits that
already coming to the bottom line.
Okay.
And the first one I described to you,the half, you know, that is a pretty
profitable business historically, andit throws quite a lot of cash off.
(16:22):
And we pay about a third ofthe monthly profits in deferred
consideration, and we try to keep that.
That's actually a good,that's a good ratio.
Yeah.
So you've got a little bit ofheadroom if things take a dip.
Yeah.
Yeah.
But this one was just thing, becauseone of the many things that when you're
in these forums and you're working withpeople that are in the same kind of
game of buying and selling businesses,you, you learn from each other.
(16:43):
So a lot of, there's been a lotof talk recently hasn't there in
your inner circles about deferredconsiderations and the timing of them?
Yes.
I think you've said more than once.
If I look back now, I would've delayedthese to six months instead of monthly.
Yeah.
And things of that nature.
So taking that on board, on thisone, we, the deferred element of it,
which was one, uh, which was 80,000.
(17:04):
120,000. That's right.
Over three years.
We did that every six months, which isjust as well because we are finding now.
Some accounting problems and had we hadthe same issue with one of the others in
the past, we would've already been due topay the first month or twos consideration.
So we're in that six month periodnow where we're going to be able
(17:26):
to make a very strong case to go tosome sort of mediation, as you say,
to write that off because we can seesome accruals and things that were in.
So, so, so the benefit.
To you, the buyer is not just acashflow benefit or a capital benefit.
The benefit to you, the buyer ofhaving control over a chunk of the
(17:47):
money owed to the owner is that ifyou have in your sale and purchase
agreement a right of offset, you don'thave to go and make warranty claims.
You can actually offset thatamount that's owed against
any claim that you might make.
As long as it's justi, you know it'sgotta be a real claim, which means
that you've still got the control.
The worst thing you could dowhen buying a business is give
(18:08):
all the money to the owner.
They will never be seen ever again.
Six month handover.
Oh, nope.
They're on a world cruise.
He won't.
You'll be seeing those guys again soon.
And yeah, people do disappear.
They just vanish.
Yeah.
The phone number changesand of they've gone forever.
Yeah.
So, so that, that's a another example.
So the only other one I think probablyto give you the picture is when we
bought the, the garage door businessfrom a pair of partners or a, a couple
(18:32):
of guys who were in partnership for.
35 years tired, you know, motivatedsellers couldn't wait to get out.
Our friends at K three or who are one ofmany brokers had valued it at something
like 750,000 or something, you know, soobviously we all immediately half, or half
and half gain any of those valuations.
(18:53):
But you know, it wasn't worth 20% of that.
But they were motivated.
And when we asked for thedetails from the brokers, we were
actually told that we weren't asuitable company to acquire them.
And that was because at that point wehadn't filed our group accounts with
a stronger balance sheet 'cause wewere still putting the structure in.
(19:15):
So they had decided along with the, thevendor that, you know, we weren't a good
fit, so we called the vendor directly.
And it wasn't actually the vendorthat decided we weren't a great fit.
It was the broker, I won't mentionagain, sorry, but the broker.
So we did a deal directly and wemanaged to secure that with an
SPV for 125,000 with 25,000 down,again, coming out of the group.
(19:41):
A hundred grand over 18months separately to the two
partners, two a half grand each.
And in each of these cases,the thing I forgot to say.
It, it's a real point for methat I make sure that I take
a deal fee out every time.
Good point.
I don't think we've mentionedthat often, maybe once today.
Yeah.
You explain to everyonewhat a deal fee is.
So Alison, so when you acquire abusiness with an SPV, with a structure
(20:05):
or even the first one, however you aredoing it, obviously the, you own that
business at that point, and there'sa temptation I think when you buy a
business or even when you grow one.
Um, to always put off the day when yourealize responsibly, realize assets in it.
And people that have had businessa long time in here will be nodding
now 'cause it's, oh yeah, I'll take adividend next year or I'll take more.
(20:28):
So one of the, one of the things I setin stone when I agreed to kind of get
into this journey, one of the things thatJonathan talks about quite a lot is a
deal fee, which is the minute that youhave the keys to the door and the bank
account take a consideration now, andeven I even put 'em in the heads of terms,
so it goes to my consultancy business.
So there's no, again,it's not hiding anything.
We even tell the targets that we're gonnatake it even though it's nothing to do
(20:51):
with them because we have nothing to hide.
We have no agenda.
And you know, these are not massivesums of money and they don't put the
business in any distress, but it'salways very nice to take a few thousand
pounds for my time and everything else.
So, so, so if I could put it anotherway, it's pay yourself first.
Yeah.
Where most business owners paythemselves last and they pay
(21:12):
everyone else and there's a littlebit left in and that's theirs.
But pay yourself first because you've beenthe person who's smart enough to go and
find the deal, negotiate the deal, put thedeal together, nurse it over the line, you
know that was three months of your life.
Then why should you notbe compensated for that?
Every private equity deal hasa deal fee wrapped into it.
It's part of the financing.
(21:33):
Yeah, because the general partnerswant to get out a fee for doing
exactly the things I've just said.
You know, originating the deal,looking at different deals, putting
the deal together, get paid first.
Yeah, I think that is really important.
So yeah, so, so we're, we're at that stagenow where we are consolidating a bit.
We do have a bit of deal flow andwe have one more to go to heads
(21:53):
of terms in February or March.
Not quite, I think it'll probably be Marchnow, which will take us then annualized
up to seven to 8 million next year.
But as I say, it's not ahigh margin operation, so.
Our target is to get to a million poundsof ebit, which I think is the absolute
minimum for choices in the marketplace.
Whether it be, yeah, you know, eequity investment, MBO, whatever, all
(22:17):
of those things require a bottom lineof about a million quids, a kind of a
magic number, just a absolute clarity.
Mm-hmm.
I think you said it, but I wannamake sure I heard it right.
Is that all of these deals that you'vejust described to create this group?
Yeah.
How much did you have to writeas a personal check into any
of these businesses or intothe group or No, nothing.
(22:39):
Zero.
Nothing.
Absolutely nothing.
Definitely nothing.
Yeah.
Seriously, nothing.
Well, I, I think it iswhat I've got it here.
It's with the one that hasn't completedyet, it's, uh, acquisition considerations
of about 1.25 million, uh, deferconsiderations, well, sorry, payments to.
The vendors of about seven 50 roundfigures and the balance is all taken
(23:03):
outta the businesses that were acquired.
So am I adding those two numbers together?
So there's about 2 million intotal consideration, or one is no.
One involves, includes the other.
Sorry.
Yes.
Yeah.
One includes the other.
It's not very clear.
But the key to it is if you strikethe deals correctly and you find
profitable businesses initially, yes.
You know, that's the key thing.
They will have cash in them.
It will be what I call lazy cash.
(23:23):
I've seen it all my life where peoplebuild up cash balances as if it's some
kind of, you know, token of success.
It's not, you need to makethe cash work for you.
So when you find those businesses,and it could be a small business with
cash in, it's all relative, isn't it?
It's a hundred.
The construction sector, a million poundbusiness is tiny, but in some sectors,
a million pound business is huge.
(23:45):
But the key is if you've got 50grand in the bank, which you might
find a small business with, you candefinitely use that as part, so.
So is that your, sounds to melike that's your go-to strategy?
Yeah.
Pretty bad.
I mean, I don't object to paying, butthe main driver really is to defer
as much as possible, not necessarilyfor cash reasons or whatever, because
(24:05):
it's a cash positive business.
It's to make sure that you unearthall the nonsense so you don't overpay.
Yeah, you don't.
That's, that's another benefit ofdeferment is that you don't overpay.
Never can you, can I just give everyonea, when you've got group of a certain
size, do a complete refinance of all thatdeferred, pay off the owners and turn
it into some bank debt, but at the sametime release further cash for growth.
(24:26):
Yeah.
And I think that's a fa, you know,that's one of the phases we're at now
is looking at finance before we need it,looking at finance to pay off deferred.
Um.
And get the business sort of debtfree in terms of all over the
place and into one core element.
Yeah.
Top tip for everyone.
Anything that springs to mind.
There's several aren't there, but tryto be succinct, I suppose, as I said to
(24:47):
somebody earlier on, choose a sector.
You know, I'm fairly sector agnostic.
I've been in several of them.
But choose a sector that youunderstand, then understand it better.
Then understand the multiples in itwithout getting too, you know, Jonathan
has a very good explanation of allthat on his mastermind courses where,
(25:07):
you know, these, these are seasonedmultiples you can work towards.
So it, I mean, it doesn't necessarilymatter along your journey of 2, 3,
4, 5, 10 businesses, if you pay abit too much for one or a little bit
lesser in a, as long as none of themultiples that you end up paying and.
You know, you can end up at the figureany which way you like, but in the
end it will be a multiple, you know,it's about what, it is always going
(25:28):
to be a multiple it's, but when you'veactually got to that point where you've
got 2, 3, 4, 5, 6, 10 of them, thenas long as the aggregate multiple.
That you've paid along the wayremains below the next level.
When you've got those 5, 6, 7, 8, 9, 10,um, you are home and dry, aren't you?
That's need to find a buyer or anMBO or whatever you choose to do.
(25:51):
It's probably easier than people think.
That part, I think it's thefirst one's the hardest.
First one's always the hardest.
Let's give John Hood a applause.
Thank you very much, John.
Hi, this is Jonathan Jay, and welcometo Business Buying Strategies,
the number one podcast for peopleinterested in buying a business
without risking any of their own cash.
Now, every week I interview peoplefrom the world of mergers and
acquisitions, specifically peoplewho've been on my mastermind program
who've gone out and bought businesses.
(00:49):
So I want you to meet John Hood now.
John was a guest at my Deal MakersLive event in January, two days of
Exceptional Deal Makers in a roomwith a hundred people answering your
questions about business buying.
Now at this live event, John told us allabout his six businesses with 6 million
(01:11):
of annual revenue, and he says it'sall my fault if he hadn't read my book.
Listen to the podcast,watch the YouTube channel.
He never would have done it.
It's a great interviewand I hope you enjoy it.
We've known each other a number of years.
Yep.
Go back a while.
We do.
And you actually said when youwere putting the microphone on over
(01:33):
there, you said it's your fault.
Which was an interesting wayof, what's my fault, John?
It's your fault that I've got acurrent buy and bill with a sort
of 6 million pound revenue and.
Five independently ownedentities, completely your fault.
And I definitely wouldn't havepatented without you a fact.
So even though I've been in the mand a space for longer than I care
to tell you all, but a long time, youknow, 30 years or so, and I'm pretty
(01:56):
experienced in buying and selling stuff,either myself or helping other people.
And I have known Jonathan A. Long time.
But that's sort of unconnected.
'cause we go back to hisMarketing Guild days and so on.
But when I, which was thebusiness I referenced earlier,
that was the acquisition fromthe capital group and the, yeah.
So yeah.
So tell us about these five.
So, so I didn't realizethe other number though.
So it's 6 million.
(02:17):
Yeah.
Okay.
Yeah.
Six, 6 million.
So there's six.
Six companies.
One one's been organically grown.
One, one was purchased out of apre-pack, not our original business.
One was a partnership that we purchasedthrough an SPV and the others were.
A sale.
Purchase agreements.
Basically a share purchase, sorry.
So yeah, share purchase agreement.
So, okay.
Brief story is in 2019 I was doing someconsultancy work for a couple of clients
(02:42):
of mine in, in their business, which theybought 'cause they thought it was a good
idea, but they didn't really know how to.
Structure it.
I ended up to come a long storyshort take buying it from them
or taking it over from them.
And so I had a business, whichwas the first one I'd had for a
number of years because I deservedbought and sold a few in the past.
And I think being around Jonathanand then ultimately joining his inner
(03:04):
circle to sort of fast forward ita little, made me more accountable.
So in any of Jonathan's training,you know, mastermind is probably
the best example where hemakes people very accountable.
You know, what are yougonna do in the next.
When you come back here nextmonth, you all gonna be the same
or you know, you gotta check.
And that we all need that in life.
You know, we all need accountabilityand we all need to have reference
(03:25):
points 'cause it makes us better.
Okay.
Can I, can I just interjectwith an example of your personal
accountability that you, thepressure that you put on yourself?
Yeah.
Which is by the nexttime I see you guys Yeah.
I will have completed on this business.
Absolutely.
Yeah.
'cause you don't want to come along and.
And not have done it.
No.
I think it's disrespectful to thepeers that you're working with or the
(03:46):
cohort you are in or whatever, and I'vebeen preaching that for so long that I
could hardly do it myself, but I didn'tnecessarily think through when I thought,
yeah, I'll buy another business by thetime we all meet again, or I'll get
to heads of terms on one or whatever.
I don't mean it wasn't thoughtthrough in terms of I could see I had
the deal flow and everything else.
What I mean is I didn't necessarilyrealize the animal that I might
(04:07):
build as a consequence of constantlybeing nagged backed to do it by
Jonathan, which is a good thing.
They're nice.
I wouldn't necessarily use the wordnag, but No, sorry, sorry, sorry.
Yeah.
I'm sorry.
I mean, professionallyencouraged peer pressure.
That's, sorry.
Yeah.
Yeah.
So, so, you know, that's, but that's beengood and it's, it's been interesting.
It's been a good journey and we'rehalfway through it, so I'm not sure
if we even said at the start, whatdo the, what do these businesses do?
(04:29):
So construction sector, mainly B2C,some trade stuff, but it's primarily,
think of it as home improvement.
So garage door company roofreplacement company, got one
traditional window and door business.
Well, so we've also got an aluminumfabricator traditional business.
So it's across that sector and we arelooking at all sorts of other areas.
(04:50):
To add in, to get themix across the group.
And, you know, it's, we are fairlyagnostic about what the company
is, as long as it's in the, in thatsector, in that sits in the area.
Okay.
So, so tell us about, just pick one ofthem and tell us about that one, one that
has some interesting assets took, I've gotterrible memory, so I've made some notes.
So, so in 2021, we bought the second one.
(05:12):
Having, as I said, having got abusiness and then deciding to go
off and do a bit of a buy and build.
Which I have done them before inother sectors, but not nowhere
near as aggressively as this.
And not using all the same tacticsthat I might have heard before, but
Jonathan reinforces so strongly,which made me certainly better
at it for sure, personally.
(05:33):
So we bought a business aluminum exextrusion business that manufactures
products for half a million quid in 2021or just over, and we paid a half a million
quid for it, but we deferred 200,000 ofit in round figures over three years.
And the 300,000 came out of thebank of the business that had been
established for 35 years I think.
(05:54):
And the owners had obviouslybuilt up a nice cash reserve.
'cause they like to look atit, you know, as people do.
Okay.
Let me interject there.
So this is a completely new conceptthat we haven't talked about at all
hasn't, I don't think it's come upat all today, which is using the
cash in the bank of the business thatyou're buying to fund the acquisition.
Which the first time you hear it, itsounds like the craziest, you know,
that just sounds like a mind blowingthat, how would that ever work?
(06:16):
So John, could you go into abit more detail about that?
So, although most SME ownersdon't understand this, once
you do, it's a lot simpler.
So assets are assets, whether they'recash machines or anything else.
So whatever's in the bankis an asset of the business.
If it's a limited company, it doesn'tmatter whether the owner thinks it's
his money, he's gotta get that moneyout at some level in some way and
(06:39):
attract a tax charge at that point.
So.
Cash of course, is different to profit.
So if you've got cash in the bank,that might have nothing to do with
the performance of the business.
It may just be reserves thathave built up over time.
So obviously it's an assessmentyou do and it's a conversation
you have to have in a certain way,which I think on your mastermind
(07:00):
courses you explain it very well.
And as long as that's had at theearly stages and not hidden, you
know, 'cause it's not a con, it'sjust part of the transaction.
It usually works pretty well for people'cause they realize they can release that
money or they can sell their business,including the value in that cash, but
pay the minimum amount of tax as well.
Yeah.
Because we've got obviouslybusiness disposal relief.
(07:22):
Relief.
Yeah.
Which, which allows, you know, 10% ofthe first million, used to be 10 million.
Those are good old days, but nowyou're still only a million now.
Yeah.
But it allows you to utilizethat cash and give it to the.
Give it to the seller andfor them to therefore pay
the lowest rate of tax on it.
It is pretty, you know, can't getlower than 10%, but allows you to give
them something of completion, whichmeans that the balance can be, in
(07:45):
your case, deferred over three years.
Three years over, over three years.
So it's a great example of buyingthe business without having
to use any of your own money.
You're effectively using theirmoney, but there's a benefit to
them because they pay less tax.
They're actually.
Ahead, aren't they?
Yeah.
Yeah.
I think it's important with stuff likethat, they go off and get a bit of advice
and hopefully they've got an accountantthat's competent enough to understand it.
(08:08):
'cause not all accountants areso don't, but assuming they get
good advice, so you know, it'sperfectly, once they understand it.
It's fine.
It works quite well, but it's the sortof thing you have to bring up very early,
I think, because it can cause distrust.
Otherwise, I think people, Andrewwould've done the same thing.
They have the conversation early on,whether it's 300,000 or 30,000, it's,
they still think it's their money.
(08:28):
The most important thing with allof this is to be transparent is
not thinking that's hiding it.
You know, until the last minute.
And then, so coming outwith it is a good plan.
That is not a good, it's to say,right, this is how we propose to do it.
That gets you what you want andallows us to buy the business.
Yeah.
And let me explain to you whythis works and how this works.
(08:49):
So you sort of, without being patronizing,you are educating, aren't you?
You are educating the seller on a processthat they would never have thought of.
No.
Unless they've sold a businessbefore, which is unlikely.
Yeah.
And I think just adding to thatbriefly, I think practice is important.
So if you haven't bought abusiness, you know, just get the
letters out and get on with it andthen you can practice on people.
And that sounds slightly unkind, butall I mean is get better yourselves.
(09:12):
I dunno, anybody in life that ever gotany good at anything without practice
yet people expect to buy a businessin five minutes by watching a YouTube.
Yeah, by watching a video.
Yeah.
So not likely really.
I mean, there might be a one in10 million chance that you'll
land on the one person that knowsless than you, but it's unlikely.
Whereas if you practice and you knowroughly what you're going to say
and you keep it formalized and youuse Jonathan's guidelines and steps
(09:36):
and so on, you will make it easy.
'cause you'll alwaysknow more than they will.
And that's always a benefit.
Yeah.
So if I could just say the same thing,but in a different way, which is, if
you know more about buying a businessand the seller knows about selling
a business, you're gonna be okay.
But if you're doing the spaghetti.
You know, making it up as you go along.
And the seller knows more about sellinga business than you know about buying.
(09:56):
Well, you are gonna beoutmaneuvered in that negotiation.
You might end up buying somethingthat without really realizing
what you're doing, and you'renot gonna get any trust either.
'cause you need a lot of trust in thesethings, don't you, formally to go forward,
both parties need to trust each other.
And that's credibility, isn't it?
To start with
(10:32):
it's also pr, it's professionalism,it's doing it in a professional way.
So tell us about a a another one.
Pick another one.
Yeah.
So we bought out of.
Well, we were going to buy in aconventional sense business in the
Northwest that we did some diligence on.
So following on from what othershave said, I think, you know,
it's again, Andrew, get to theheads of terms really quick.
(10:54):
We did that.
We don't really get involvedin arguing about prices.
We certainly never give any offers out.
All we say to people is,how much do you want?
And by the way, you're not gonna get that.
So how much do you need?
Which is one of.
Johnson's key phrases and we shut upand listen and we pretty much move
quickly because the price doesn't matter.
I think your other people are gonna getup here and think maybe tomorrow, Phil.
He's very soon.
(11:15):
It's not really aboutat that stage the price.
It's about the viability of thebusiness and what it's worth to
you and what you end up paying for.
It is a whole different ball game.
You know, you start with the heads ofterms that gets everyone else out of the
market from there on in, you negotiate.
That's when the negotiationreally starts, isn't it?
(11:36):
At the point of the headsof terms being signed?
Yes.
That's a good way, which is whywhen people email it, they're
gonna get 98 people to tell 'emhow they would've written it.
Y years ago I saw this, it was anAmerican piece of research about
negotiation, and it was somethinglike 97% of email negotiations fail.
So if you think you can negotiate adeal by emailing backwards and forwards,
(11:58):
you, you can't, and it won't work.
You need to be sitting downwith someone face to face.
I mean, zoom's kind of okay,but if you're gonna talk about
money, talk about it face to face.
Yeah, I, I agree with that.
I mean, I've never negotiated anyamount of money in any transaction ever
without looking somebody in the eye.
You've got to be clear about that.
'cause that's theintegrity in it, isn't it?
(12:20):
So, yeah, zoom's fine for introductionsand stuff, but yeah, key is we, so
we did this with these heads of termsof this particular business and we
unearthed a load of nonsense and falseaccounting and all sorts of other things.
Luckily, early on.
So this, you know, that have beenvalued by one of our infamous business
brokers, I think they're called by,you know, for 350,000 or something.
(12:42):
And it was worth probablyminus a hundred thousand.
So we said to the owners,this isn't gonna work.
I mean, this isn't for everyone,as Jonathan said, this isn't
gonna work, but we will help you.
And I think we help them bybasically taking the business
over by pre packing it.
So that is, we got a, a, an administratorin, tame administrator in inverted
comm who, who went through the process.
(13:04):
Of us acquiring the assets andwe paid a nominal sum of money.
You know, you don't getany warranties with that.
You, you are buying somethingunknown, but it's cheap.
You know, it's like going andtalked about his penny deal or,
but the key thing is you've gotan infrastructure to pop it into.
Yeah.
Because if you haven't, then.
Yeah, it's a lot of work.
It's an awful lot of work.
And this wasn't completely broken.
(13:25):
It was just being badly managed andclearly financially badly managed as well.
And back to the earlier point aboutit's so important to have your finances
in order and to understand finance ifyou're gonna buy and sell businesses.
So we took it over.
We did pay a deferred consideration,not a lot of money, but over four to
six months because you can still dothat even with distressed businesses.
Oh, is that with the ip?
(13:46):
Yeah, it is interesting.
'cause most people think you can't.
They think that because the IPwill tell you that you can't.
Yeah, the insolvency practitionerwill tell you that you've gotta,
you've gotta pay all the money.
You want all the money and,uh, best and final offer.
And you've got to, if we acceptyour offer, you need to, yeah, we
need to complete it in 48 hours.
And yes, you would have to complete in 48hours, but people don't seem to realize,
I mean, we had an, i we in that group,we had the IP come along to the group.
(14:08):
Yeah.
The, they're actually, they'revery open to that, to a payment.
Over, over time.
There's a few, so.
Caveats to it.
Yeah.
And they have to take thebest offer, don't they?
And that could necessarily be aslightly premium price to somebody
else's offer, but paid over alonger period of time, for example.
So there's more than one wayto do everything isn't there?
But I think we did that.
We took it over, sort of transformedit, got rid of all the rot and
(14:28):
the people that owned it who were.
Pretty, you know, we weren't doinga very good job, shall we say,
and, and put the management staff.
And as Jonathan says, we had the structurebuilding by then to take that on because
prior to that, we'd just taken on anothercompany, not a million miles from it.
So we had some of the crossmanagement skills and things
to be able to put in place.
So, so yeah.
So that, that was a sort of, that wasa 20,000 pound investment, but we paid
(14:50):
it over six months to give you context.
And that business this year willgenerate revenues of three quarters
of a million and maybe a EBIT of.
60 to 80.
They're not, these are not highmargin enterprises in this space.
You know, it's single digit.
So you, so actuallyyou've gotta have scale.
Yeah.
To turn some decent numbers at the bottom.
(15:11):
Absolutely.
Yeah.
Yeah.
And also because the single digit,because success and failure are
close, you know, you can be 3% thewrong way, or 3% the right way.
Success and failure canbe, you know, that serious.
So yeah, we did that one.
And I think the other one to.
Point out to you is where webought a business for, so I should
get the numbers right for, yeah,two 35 million pound a year.
(15:36):
These are all between 750 and1.2 billion pounds of revenue.
These businesses I'm talking about, whichis where you get your five or 6 million.
So that one was uh, yeah, 2 35.
We paid 155,000 poundson completion to the two.
Former owners as they are now.
And I think at that moment in time therewas 175 grand in the bank or something.
(15:59):
So we did have to put a little bitof money in for working capital.
'cause obviously we do a workingcapital assessment, but where did
that little bit of money come from?
From, from the group's resources,not from me, if that's what you mean.
Yeah, so, so for, yeah, from thegroup's resources and profits that
already coming to the bottom line.
Okay.
And the first one I described to you,the half, you know, that is a pretty
profitable business historically, andit throws quite a lot of cash off.
(16:22):
And we pay about a third ofthe monthly profits in deferred
consideration, and we try to keep that.
That's actually a good,that's a good ratio.
Yeah.
So you've got a little bit ofheadroom if things take a dip.
Yeah.
Yeah.
But this one was just thing, becauseone of the many things that when you're
in these forums and you're working withpeople that are in the same kind of
game of buying and selling businesses,you, you learn from each other.
(16:43):
So a lot of, there's been a lotof talk recently hasn't there in
your inner circles about deferredconsiderations and the timing of them?
Yes.
I think you've said more than once.
If I look back now, I would've delayedthese to six months instead of monthly.
Yeah.
And things of that nature.
So taking that on board, on thisone, we, the deferred element of it,
which was one, uh, which was 80,000.
(17:04):
120,000. That's right.
Over three years.
We did that every six months, which isjust as well because we are finding now.
Some accounting problems and had we hadthe same issue with one of the others in
the past, we would've already been due topay the first month or twos consideration.
So we're in that six month periodnow where we're going to be able
(17:26):
to make a very strong case to go tosome sort of mediation, as you say,
to write that off because we can seesome accruals and things that were in.
So, so, so the benefit.
To you, the buyer is not just acashflow benefit or a capital benefit.
The benefit to you, the buyer ofhaving control over a chunk of the
(17:47):
money owed to the owner is that ifyou have in your sale and purchase
agreement a right of offset, you don'thave to go and make warranty claims.
You can actually offset thatamount that's owed against
any claim that you might make.
As long as it's justi, you know it'sgotta be a real claim, which means
that you've still got the control.
The worst thing you could dowhen buying a business is give
(18:08):
all the money to the owner.
They will never be seen ever again.
Six month handover.
Oh, nope.
They're on a world cruise.
He won't.
You'll be seeing those guys again soon.
And yeah, people do disappear.
They just vanish.
Yeah.
The phone number changesand of they've gone forever.
Yeah.
So, so that, that's a another example.
So the only other one I think probablyto give you the picture is when we
bought the, the garage door businessfrom a pair of partners or a, a couple
(18:32):
of guys who were in partnership for.
35 years tired, you know, motivatedsellers couldn't wait to get out.
Our friends at K three or who are one ofmany brokers had valued it at something
like 750,000 or something, you know, soobviously we all immediately half, or half
and half gain any of those valuations.
(18:53):
But you know, it wasn't worth 20% of that.
But they were motivated.
And when we asked for thedetails from the brokers, we were
actually told that we weren't asuitable company to acquire them.
And that was because at that point wehadn't filed our group accounts with
a stronger balance sheet 'cause wewere still putting the structure in.
(19:15):
So they had decided along with the, thevendor that, you know, we weren't a good
fit, so we called the vendor directly.
And it wasn't actually the vendorthat decided we weren't a great fit.
It was the broker, I won't mentionagain, sorry, but the broker.
So we did a deal directly and wemanaged to secure that with an
SPV for 125,000 with 25,000 down,again, coming out of the group.
(19:41):
A hundred grand over 18months separately to the two
partners, two a half grand each.
And in each of these cases,the thing I forgot to say.
It, it's a real point for methat I make sure that I take
a deal fee out every time.
Good point.
I don't think we've mentionedthat often, maybe once today.
Yeah.
You explain to everyonewhat a deal fee is.
So Alison, so when you acquire abusiness with an SPV, with a structure
(20:05):
or even the first one, however you aredoing it, obviously the, you own that
business at that point, and there'sa temptation I think when you buy a
business or even when you grow one.
Um, to always put off the day when yourealize responsibly, realize assets in it.
And people that have had businessa long time in here will be nodding
now 'cause it's, oh yeah, I'll take adividend next year or I'll take more.
(20:28):
So one of the, one of the things I setin stone when I agreed to kind of get
into this journey, one of the things thatJonathan talks about quite a lot is a
deal fee, which is the minute that youhave the keys to the door and the bank
account take a consideration now, andeven I even put 'em in the heads of terms,
so it goes to my consultancy business.
So there's no, again,it's not hiding anything.
We even tell the targets that we're gonnatake it even though it's nothing to do
(20:51):
with them because we have nothing to hide.
We have no agenda.
And you know, these are not massivesums of money and they don't put the
business in any distress, but it'salways very nice to take a few thousand
pounds for my time and everything else.
So, so, so if I could put it anotherway, it's pay yourself first.
Yeah.
Where most business owners paythemselves last and they pay
(21:12):
everyone else and there's a littlebit left in and that's theirs.
But pay yourself first because you've beenthe person who's smart enough to go and
find the deal, negotiate the deal, put thedeal together, nurse it over the line, you
know that was three months of your life.
Then why should you notbe compensated for that?
Every private equity deal hasa deal fee wrapped into it.
It's part of the financing.
(21:33):
Yeah, because the general partnerswant to get out a fee for doing
exactly the things I've just said.
You know, originating the deal,looking at different deals, putting
the deal together, get paid first.
Yeah, I think that is really important.
So yeah, so, so we're, we're at that stagenow where we are consolidating a bit.
We do have a bit of deal flow andwe have one more to go to heads
(21:53):
of terms in February or March.
Not quite, I think it'll probably be Marchnow, which will take us then annualized
up to seven to 8 million next year.
But as I say, it's not ahigh margin operation, so.
Our target is to get to a million poundsof ebit, which I think is the absolute
minimum for choices in the marketplace.
Whether it be, yeah, you know, eequity investment, MBO, whatever, all
(22:17):
of those things require a bottom lineof about a million quids, a kind of a
magic number, just a absolute clarity.
Mm-hmm.
I think you said it, but I wannamake sure I heard it right.
Is that all of these deals that you'vejust described to create this group?
Yeah.
How much did you have to writeas a personal check into any
of these businesses or intothe group or No, nothing.
(22:39):
Zero.
Nothing.
Absolutely nothing.
Definitely nothing.
Yeah.
Seriously, nothing.
Well, I, I think it iswhat I've got it here.
It's with the one that hasn't completedyet, it's, uh, acquisition considerations
of about 1.25 million, uh, deferconsiderations, well, sorry, payments to.
The vendors of about seven 50 roundfigures and the balance is all taken
(23:03):
outta the businesses that were acquired.
So am I adding those two numbers together?
So there's about 2 million intotal consideration, or one is no.
One involves, includes the other.
Sorry.
Yes.
Yeah.
One includes the other.
It's not very clear.
But the key to it is if you strikethe deals correctly and you find
profitable businesses initially, yes.
You know, that's the key thing.
They will have cash in them.
It will be what I call lazy cash.
(23:23):
I've seen it all my life where peoplebuild up cash balances as if it's some
kind of, you know, token of success.
It's not, you need to makethe cash work for you.
So when you find those businesses,and it could be a small business with
cash in, it's all relative, isn't it?
It's a hundred.
The construction sector, a million poundbusiness is tiny, but in some sectors,
a million pound business is huge.
(23:45):
But the key is if you've got 50grand in the bank, which you might
find a small business with, you candefinitely use that as part, so.
So is that your, sounds to melike that's your go-to strategy?
Yeah.
Pretty bad.
I mean, I don't object to paying, butthe main driver really is to defer
as much as possible, not necessarilyfor cash reasons or whatever, because
(24:05):
it's a cash positive business.
It's to make sure that you unearthall the nonsense so you don't overpay.
Yeah, you don't.
That's, that's another benefit ofdeferment is that you don't overpay.
Never can you, can I just give everyonea, when you've got group of a certain
size, do a complete refinance of all thatdeferred, pay off the owners and turn
it into some bank debt, but at the sametime release further cash for growth.
(24:26):
Yeah.
And I think that's a fa, you know,that's one of the phases we're at now
is looking at finance before we need it,looking at finance to pay off deferred.
Um.
And get the business sort of debtfree in terms of all over the
place and into one core element.
Yeah.
Top tip for everyone.
Anything that springs to mind.
There's several aren't there, but tryto be succinct, I suppose, as I said to
(24:47):
somebody earlier on, choose a sector.
You know, I'm fairly sector agnostic.
I've been in several of them.
But choose a sector that youunderstand, then understand it better.
Then understand the multiples in itwithout getting too, you know, Jonathan
has a very good explanation of allthat on his mastermind courses where,
(25:07):
you know, these, these are seasonedmultiples you can work towards.
So it, I mean, it doesn't necessarilymatter along your journey of 2, 3,
4, 5, 10 businesses, if you pay abit too much for one or a little bit
lesser in a, as long as none of themultiples that you end up paying and.
You know, you can end up at the figureany which way you like, but in the
end it will be a multiple, you know,it's about what, it is always going
(25:28):
to be a multiple it's, but when you'veactually got to that point where you've
got 2, 3, 4, 5, 6, 10 of them, thenas long as the aggregate multiple.
That you've paid along the wayremains below the next level.
When you've got those 5, 6, 7, 8, 9, 10,um, you are home and dry, aren't you?
That's need to find a buyer or anMBO or whatever you choose to do.
(25:51):
It's probably easier than people think.
That part, I think it's thefirst one's the hardest.
First one's always the hardest.
Let's give John Hood a applause.
Thank you very much, John.
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