Buyers and Builders
00:01:56 · Mikk, Andrea Allegrini
[00:01:56] S0: Okay. What about the founders, Marco and Michel... Michele? What was their background before starting this business? [00:02:03] S1: Okay. They both come from past experiences in logistics. Michele has a degree in economics, and Marco is an engineer. Michele used to work for a London based consultancy company, mainly oriented in giving consultancy for infrastructure, like, for example, railways and so on. While Marco has past experiences in company like DHL and HP. They met in the younger section of the Italian logistic association, and they started by... Because they they were both working for for Vodafone, you know, the TLC company. And so Lindbergh was founded as a spin off. They took together Vodafone, and they founded Lindbergh in 2006. [00:02:51] S0: Okay. So give us an overview of the current portfolio and also maybe the timeline when did you go public and the acquisitions and then we go all into detail on how you've done it all.
00:03:05 · Andrea Allegrini
[00:03:05] S1: Okay. So Lindbergh started to deliver logistics services in 2008. It was mainly logistics services aimed at collecting waste from service technician all over Italy from a specific industry, which is the forklift industry. And at the time, we faced a huge evolution in the waste regulation, and those technician were not able to to manage themselves. So they called us to find... As a traditional consultant to find some players all over the territory. But we understood that nobody was able to to do this service from Milan to Naples, and so we decided to to try to do this our... Ourselves. So we started delivering micro collection of waste services all over Italy into... In... It was November 2008. So we bought the first van, got the authorization, the licenses, and so on. And so from, I would say, 2008 to 2013, we increased in waste management by also approaching new customer and delivering more traditional waste management services. We started after... Right after in 2014 with distribution services in spare parts, always for the forklift... Mainly for the forklift industry. And by mixing the capability of collecting waste to the delivery itself, which is not a traditional delivery of spare parts, but it's made during the night delivering straight in the van of the service technician while he's sleeping at home. So it's a niche service aimed at increasing the productivity of all the service technician in elevator industry, forklift industry, IT and so on. And so we started like this to deliver this very unique service and gave us also the opportunity to to build an experience in France for the same big customers like Jungheinrich, Toyota, Linde, so mainly forklift players, huge forklift players, multinational companies. And we went public in 2021, December 2021, mainly with the aim to build a pan European logistic company in the spare parts distribution. So with the will to take the complex business model we built in Italy over the years and implement it in other countries like France, like Germany, where the... Our customers have a much bigger network of service technician. While in Italy, as you know, we have smaller companies, more fragmented industry.
00:05:58 · Andrea Allegrini, Mikk
And so we went public to raise money for this kind of internationalization, but we ended up in selling the French business in late twenty twenty four for many reasons, mainly to reduce the risk due to the fact of staying there. In France, Lindbergh was not making any margins. We had a very aggressive competitor. And in the meantime, we realized that HVAC could be our the main driver of our future growth. And so we ended up in selling the company in December 2024 to focus our energy and capital in the HVAC opportunity in Italy. And here we are after a couple of years by we bought, as you said, 13 companies. And to date, HVAC is the biggest business unit of the group. [00:06:51] S0: Okay. Excellent. Now before talking about acquisitions, Amor Dzok, maybe shortly about the period of expanding to France, building a business there. I was what you guys are doing great is you're writing those annual letters. So I was going through this. And I think it was the 2021 or 2022 version where you guys shared that the opportunity is great, but one of the one of the tailwinds is the language part, the French language. So what else was the the bottleneck when it comes to expanding to a new country? Because there there are many guys listening there just operating in The US market, but at the same time, there are Europeans. And European, you know, there are so many different countries' regulations. So what... What's maybe some of the lessons and what do you experience when it comes to expanding to a foreign country? One being the language issue. What else?
00:07:46 · Andrea Allegrini
[00:07:46] S1: Now there, our main difficulties was the financial situation of our company. We first started as minority shareholder in France. And after a couple of years, the company was losing like 2,000,000 over a turnover of EUR 9,000,000. So we must change quickly, and so we decided to take over the majority of the company and to move in Italy all the strategic functions, so sales, administration, operations, and customer service. Basically, in France, we just had a couple of people in the warehouse and all the network of subcontractors doing the last mile delivery. And it was very complex mainly due to the fact of not being there. I I like to be close to my to my customer and to my colleague. And so that was difficulty number number one. But I think that the main lesson was... We have a couple of lesson we learned in the last year. So the first is that what has worked here maybe is not working in another country for many reason, not because the country is better or worse, but mainly because we have different approaches, different sensitivity even among our customers. And the second is to focus, so to choose which opportunity is better for a long term creation of value. And staying there, there, we had a huge business because logistics was 2x the logistic business we have here in Italy in terms of size, but we did no margin. And not having a protected business for us, it was really dangerous because despite delivering during the night, it was a pure logistic services, so no protection at all. While in Italy, built a really protected business. And so staying there was too risky, and we had a very aggressive competitor. And so losing the first customer, which was doing onethree of the turnover, was a way too dangerous to fall again in a very bad financial situation. And so we decided in a very pragmatic way to concentrate our business, energy and capital in more promising opportunities like, at the end of the day, the HVAC in Italy.
00:10:17 · Mikk, Andrea Allegrini
[00:10:17] S0: So it has been like a true evolution. So I'm trying to understand, how was the moment then? What did you see in the HVAC that made you realize that could be the next great chapter of the company when it comes to moving forward? [00:10:30] S1: Okay. The choice was made after a dinner with Mikkael. I can remember it very, very well because we used to talk with our customer number one in France, and we felt that he was talking with the... Our competitor. And so Mikkael said that I don't want to rely on one single customer. Lindbergh cannot rely on one single customer for the future. So sell... Let's sell France. And we decided it. It was, I think, July 2024. And in November, the deal was closed. We we sold to our main competitor, to the aggressive one. And... Because they they wanted to to make Lindbergh fall by taking the first customer of the group. And so, again, with a lot of pragmatism, we said, okay, let's give away the company no matter if we don't cash in the money we invested in the last years, but let's focus on HVAC. So we are not... We learn also not to be jealous of what we build. [00:11:39] S0: Okay. For for someone who has never studied the Italian HVAC market, Why is it such a attractive hunting ground, if we can say that? What what makes it so attractive for you? And and... Yeah. Give us an overview a bit, please.
00:11:39 · Mikk, Andrea Allegrini
[00:11:39] S0: Okay. For for someone who has never studied the Italian HVAC market, Why is it such a attractive hunting ground, if we can say that? What what makes it so attractive for you? And and... Yeah. Give us an overview a bit, please. [00:11:56] S1: Fragmentation is may... I think the the the main the main characteristics of this business. It's a business of EUR 12,000,000,000. I'm talking about installation and maintenance services, so no production and no distribution, with roughly 12,000 capital companies. So the average size is really, really small, plus more than 50,001 person companies. We call them artisan. And so this is point number one. Point number two is the... I think it's something that all the European companies are facing is the generational succession issue. So these companies are not finding someone or an industrial player willing to take over the company to grant continuity mainly when the salary is 60, 65, 70 years old. So he's really willing to to find a good... A permanent home for the people he he has worked with in the last decades. And so those two factors are a really good mix that bring us lots of opportunities in this in this sense, in terms of business, but also on the financial side. So good price and very good payment conditions.