Business Breakdowns
· Asif Jeevanjee, Matt Reustle
[00:00:00] S1: One lesson is that, while generally acquisitions have a bad rap, Compass has shown that, executed well and within a coherent strategy, they can create a tremendous amount of value. And whilst acquisitions have served Compass well, they've also been willing to do something else, which is to shrink to grow. And that's been particularly true under the excellent leadership of Dominic Blakemore. There are food service sectors where Compass has elected not to play. There are some where they're quietly retreating. And counterintuitively, they've divested from operations in entire countries, including some large population ones. There they judge the risk was too high, the opportunity not so attractive, or the capital required to get to scale just simply too large. Instead, they've redeployed those resources into doubling down where they're already strong, and where they see a big runway. One way to think about this is Compass are opting to play games they know they can win. And this goes against the grain of so many companies that by nature are expansionist. I think shrinking to grow is a high density signal of quality amongst the noise, and well worth looking out for in other companies and other industries. [00:00:00] S0: I love that. One of my favorite themes from the US railroads and their incredible performance dating back to the early 2000s and for a decade plus thereafter. I love that theme and think it's laid out very interestingly here. Asif, thank you very much for joining us on Breakdowns today. [00:00:00] S1: It's been great to be here. Thank you Matt.