The Exit Plan: Mergers and Acquisitions for Creative Entrepreneurs Barnaby Cook

Tim Drake, a semi-retired agency owner, shares his journey of building and selling his agency for £20 million. He discusses the various pivots his agency went through, from graphic design to websites to mobile-first business. Tim emphasizes the importance of finding the right business partner and maintaining a ruthless focus on building and selling. He explains the earn-out structure of the deal and how they exceeded expectations. Tim also highlights the significance of culture, agility, and a deep understanding of running a business in achieving success. He encourages agency owners to consider different approaches to achieve their financial goals.
Takeaways
Pivoting and adapting to new technologies and market demands is crucial for the success of an agency. Finding the right business partner who complements your skills and shares your vision is essential. Maintaining a ruthless focus on building and selling can lead to significant financial success. Culture, agility, and a deep understanding of running a business are key factors in achieving success in the agency industry. Connect with Tim on LinkedIn: https://www.linkedin.com/in/tim-drake-6b41569/
Connect with Barnaby on LinkedIn: https://www.linkedin.com/in/barnabycook/
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George Hughes, founder of Small Films, shares his experience of starting and acquiring businesses in the video production industry. He discusses the challenges of transitioning from working in the television industry to running his own company and the importance of understanding the objectives of clients. Hughes also talks about how he acquired Maia Films, an education specialist company, during its liquidation process. He explains the negotiation process, the assets he acquired, and the impact on his business. He concludes by reflecting on the lessons learned and the potential for future acquisitions.
Takeaways
Transitioning from working in a specific industry to running your own company requires understanding the objectives of clients and adapting to their needs. Acquiring a business during its liquidation process can be a strategic opportunity, but it requires careful negotiation and assessment of the assets and liabilities involved.  The acquisition of Maia Films has the potential to significantly increase Small Films' turnover and establish the company as a dominant player in the education content industry. Timing is crucial in business acquisitions, and acting quickly can help secure clients and maximize the benefits of the acquisition. Reflecting on the experience, being more aggressive and proactive in the acquisition process could have yielded even better results. Connect with George on LinkedIn: https://www.linkedin.com/in/georgemhughes/
Connect with Barnaby on LinkedIn: https://www.linkedin.com/in/barnabycook/
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Steve James Royal, co-founder of The Yard Creative, shares his journey of building and selling a design agency. The Yard Creative is an evidential design agency that focuses on bringing scientific thinking and research into the design process. Steve discusses the challenges and successes of implementing evidential design, including a case study with World Vision. He also talks about the growth of the business, the sale process, and the transition to working for a new owner. Steve shares insights on the importance of growing up as a business owner, the impact of COVID-19 on the earn-out, and his plans for the future.
Takeaways
Evidential design brings scientific thinking and research into the design process, allowing for more objective decision-making. Implementing evidential design can lead to successful projects and awards, as demonstrated by the case study with World Vision. Growing up as a business owner involves developing processes, understanding the financials, and taking a more strategic approach. Selling a business requires finding the right buyer who aligns with the company's values and long-term goals. The earn-out period can be affected by unforeseen events, such as the COVID-19 pandemic, but open communication and flexibility can help navigate challenges. Transitioning from a business owner to a non-executive role allows for more free time and the opportunity to pursue new ventures. Connect with James on LinkedIn: https://www.linkedin.com/in/steveroyle/
Connect with Barnaby on LinkedIn: https://www.linkedin.com/in/barnabycook/

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Arthur Petropoulos, the managing partner at Hillview Partners, discusses his work in mergers and acquisitions and capital advisory for middle market companies. He shares how he got into this line of work and the process of setting up and growing his own firm. Petropoulos explains the importance of building infrastructure and processes in businesses to reach the one million EBITDA mark, which is a key threshold for attracting buyers. He also highlights the factors that make a business attractive to acquirers, including fundamentals, access, capabilities, people, process, and product. Petropoulos shares his experience working with video production companies and the types of buyers in that industry. Arthur Petropoulos of Hill View Partners discusses the number of transactions his firm works on each year, the current state of the market, and the types of companies they typically deal with. He emphasizes the importance of consistent, profitable businesses that generate cash and provide real-world products and services. Petropoulos also explains the split between strategic buyers and private equity in the transactions he has worked on. He provides an overview of how private equity works, their objectives, and the success rate of private equity deals.
Takeaways
Mergers and acquisitions and capital advisory firms help companies sell themselves and secure capital. Building infrastructure and processes is crucial for businesses to reach the one million EBITDA mark and become attractive to buyers. The attractiveness of a business to acquirers is determined by fundamentals, access, capabilities, people, process, and product. Video production companies can be attractive to buyers, especially if they have specialized capabilities or access to specific industries. Hill View Partners typically closes around 10 to 12 deals a year, but is aiming to increase that number to 20 as the team grows. While flashy early-stage companies and mega deals may get attention, the majority of the market consists of consistent, profitable businesses that generate cash and provide real-world products and services. Private equity firms typically look for businesses they can buy, improve, and sell within a 5 to 9 year timeframe, aiming for a return of around 20%. The split between strategic buyers and private equity in transactions is roughly 40% each, with the remaining 20% being family offices and search funds. Private equity deals have become more institutionalized and professionalized over the years, with a focus on consistent returns rather than high-risk, high-reward strategies. Connect with Arthur on LinkedIn: https://www.linkedin.com/in/arthur-petropoulos/
Watch his YouTube Channel here: https://www.youtube.com/@HillViewPartners
Connect with Barnaby on LinkedIn: https://www.linkedin.com/in/barnabycook/
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Alex Price, founder of 93 Digital, shares his journey of building and selling his digital agency. He started freelancing in web design at a young age and eventually grew his agency to a team of 35. The agency focused on WordPress and B2B tech clients, and later expanded into digital marketing services. Alex decided to sell the agency when it was in a position of strength and had attracted interest from potential buyers. The acquisition process involved finding the right cultural fit and structuring the deal. After the sale, Alex stayed with the business for a period of time before deciding to move on and explore new opportunities.  

Starting a digital agency at a young age can lead to significant growth and success. Focusing on a niche market, such as WordPress or B2B tech, can help differentiate an agency and attract clients. Selling an agency requires careful consideration of cultural fit and deal structure. Integration after an acquisition can be challenging and time-consuming. Reflecting on the experience of selling an agency can provide valuable insights for future endeavors. Connect with Alex on LinkedIn: https://www.linkedin.com/in/alxprce/
Connect with Barnaby on LinkedIn: https://www.linkedin.com/in/barnabycook/
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Richard Neve, Executive Creative Director at Cognito, shares his professional journey and the acquisition of his agency by Cognito. Cognito is a global agency focused on financial services and financial technology. Richard started as a journalist and later moved into public relations in the financial services industry. In 2017, Cognito acquired Richard's agency in the Netherlands, and in 2022, they acquired a minority stake in a German agency, which Richard now manages. Shortly after the acquisition, the seller sadly passed away, and Richard talks about what happened in the days and weeks following. The future plans for Cognito include expanding their footprint in other countries through similar acquisitions.  


Takeaways Cognito is a global agency focused on financial services and financial technology. Richard Neve's agency in the Netherlands was acquired by Cognito in 2017. Cognito later acquired a minority stake in a German agency, which Richard now manages. The future plans for Cognito include expanding their footprint in other countries through similar acquisitions.
 
Get in touch with Richard Neve: https://www.linkedin.com/in/richardneve/
 
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