Buyers and Builders
00:18:29 · Mikk, Andrea Allegrini
[00:18:29] S0: So I was doing a bit of research, and I found that Lindbergh is mixing heating, AC, maintenance and water treatment in the same region. Is there a clear strategy behind this? Why are doing this? [00:18:43] S1: Yes. I think that buying a little of everything is good, first of all, in terms of risk reduction. Again, not to be too much exposed to external factors and fiscal interventions by from the government. And also in the possibility to upsell and cross sell, so to take, for example, specific business that are held by a single company of the group and try to propose those businesses to the customer of the other companies of the group. But we find very powerful also the activity of sharing engineers among these companies to cope with the, what we call, a seasonal gap. Because if you have on the same territory, a company doing AC system and heating maintenance services, in both cases, the high season are complementary. So in high season, you can take technician working for a company low season and send him to work for the other company of the group, basically, by raising additional turnover with little additional operational costs. And this is really powerful, and this is working. So we are already doing this.
00:18:43 · Andrea Allegrini, Mikk
[00:18:43] S1: Yes. I think that buying a little of everything is good, first of all, in terms of risk reduction. Again, not to be too much exposed to external factors and fiscal interventions by from the government. And also in the possibility to upsell and cross sell, so to take, for example, specific business that are held by a single company of the group and try to propose those businesses to the customer of the other companies of the group. But we find very powerful also the activity of sharing engineers among these companies to cope with the, what we call, a seasonal gap. Because if you have on the same territory, a company doing AC system and heating maintenance services, in both cases, the high season are complementary. So in high season, you can take technician working for a company low season and send him to work for the other company of the group, basically, by raising additional turnover with little additional operational costs. And this is really powerful, and this is working. So we are already doing this. [00:19:59] S0: Now you have done like 13 acquisitions in HVAC sector. How much... How is your sourcing process? Are now these days deals coming to you because there are a lot of sellers knowing that you are you are this player who are buying this type of businesses, or how how does it work... Your process work? Or do you need to do outreach? Or how how is it work?
00:19:59 · Mikk, Andrea Allegrini
[00:19:59] S0: Now you have done like 13 acquisitions in HVAC sector. How much... How is your sourcing process? Are now these days deals coming to you because there are a lot of sellers knowing that you are you are this player who are buying this type of businesses, or how how does it work... Your process work? Or do you need to do outreach? Or how how is it work? [00:20:21] S1: To date, it's basically word-of-mouth because, you know, those seller mainly when they are part of the same brand. They used to meet, for example, in events or conferences. So they talk they talk about Lindbergh. And so Lindbergh is somehow well known in these situations. And most of the deals came by word-of-mouth, which is really good because it's... It gives us also sort of standing so the seller can trust us because he has experience of a friend of that's already sold to us. So it's really good in this sense. Now I think that we are quite mature, so we need to keep this flywheel because it's important on one end. But on the other hand, we need to become a little more proactive because we want to exploit all the potential synergies that we can find at the local level in terms of operations and business. And so we are now making a proactive research of companies we want to build where we need them.
00:20:21 · Andrea Allegrini, Mikk
[00:20:21] S1: To date, it's basically word-of-mouth because, you know, those seller mainly when they are part of the same brand. They used to meet, for example, in events or conferences. So they talk they talk about Lindbergh. And so Lindbergh is somehow well known in these situations. And most of the deals came by word-of-mouth, which is really good because it's... It gives us also sort of standing so the seller can trust us because he has experience of a friend of that's already sold to us. So it's really good in this sense. Now I think that we are quite mature, so we need to keep this flywheel because it's important on one end. But on the other hand, we need to become a little more proactive because we want to exploit all the potential synergies that we can find at the local level in terms of operations and business. And so we are now making a proactive research of companies we want to build where we need them. [00:21:33] S0: Now when it comes to the acquisitions you've done so far, you mentioned smallest has been like 300,000, the largest one eight million. So it's a pretty large gap. So moving forward, do you see you still keep acquiring those small tiny tiny businesses with revenue less than 1,000,000? Or it's... It works for you because you can integrate them so well?
00:21:33 · Mikk, Andrea Allegrini
[00:21:33] S0: Now when it comes to the acquisitions you've done so far, you mentioned smallest has been like 300,000, the largest one eight million. So it's a pretty large gap. So moving forward, do you see you still keep acquiring those small tiny tiny businesses with revenue less than 1,000,000? Or it's... It works for you because you can integrate them so well? [00:21:54] S1: We like them a lot actually because they come at a low price and they gave e e... Above all, when you already have a company on the same territory, you can exploit lots of synergies. For example, we did an acquisition last year on the Adriatic Side of Italy. It was it's called Salvucci, and he was the local competitor of a company that we already had. And it was a company doing 1,000,000 turnover. So we bought it at a good price, and the integration was 100% managed by the local manager. So for us, it was maybe one of the best deal ever closed. So we merged them. We closed our house. We closed the offices of the company. We bought. We... And and now we basically are monopolist in that city. And this is a good strategy. So to go on building this local monopolist, maybe staying away from big cities like Milan or Rome, where you have high competition, price issues, while Italy is made of lots of little cities where you have lots of customary, mainly residential business in HVAC. And so if we are able to build these local little local monopolies, our strategy is it means it's working.
00:21:54 · Andrea Allegrini, Mikk
[00:21:54] S1: We like them a lot actually because they come at a low price and they gave e e... Above all, when you already have a company on the same territory, you can exploit lots of synergies. For example, we did an acquisition last year on the Adriatic Side of Italy. It was it's called Salvucci, and he was the local competitor of a company that we already had. And it was a company doing 1,000,000 turnover. So we bought it at a good price, and the integration was 100% managed by the local manager. So for us, it was maybe one of the best deal ever closed. So we merged them. We closed our house. We closed the offices of the company. We bought. We... And and now we basically are monopolist in that city. And this is a good strategy. So to go on building this local monopolist, maybe staying away from big cities like Milan or Rome, where you have high competition, price issues, while Italy is made of lots of little cities where you have lots of customary, mainly residential business in HVAC. And so if we are able to build these local little local monopolies, our strategy is it means it's working. [00:23:22] S0: When it comes to capital allocation and more specifically deal structures, you've done so many. Maybe you can summarize like what has been the acquisition multiple, the average one and how does the you said there is no earn out for the sellers. So can you share more of of of the deal structures?