Having completed a Management Buy-Out, a £20m fundraise and four acquisitions all in just under 13 months, RGCF Partner and Head of Corporate Finance, Carl Swansbury, along with CF Director Rhiannon Nightingale reflect with Andy Gough and Michael Hall, CEO and CFO of eQuality Solutions (“eQS”), on the journey they have been on and their advice to other businesses and leadership teams looking to embark on their own scale up strategy.
Michael, for those who aren’t familiar with eQS, please can you tell us a little more about the business and its history?
We are a multidisciplined provider that supports organisations primarily across enterprise, education and government, with their Diversity, Equity and Inclusion agenda. This means everything from organisational audits, designing and delivery of assessments through to training programmes to ensure that an organisation’s goals are met when it comes to DE&I.
The Group was formed on the back of a MBO that Andy and I led and completed in December 2020. Prior to that, the original businesses that were part of that buyout had been operating for between 8 and 15 years and have an incredibly strong heritage in disability services, focusing on the disabled students allowances market, supporting students primarily with cognitive learning disabilities.
Concurrently to the MBO, we secured £20m of funding from Shard Credit Partners and executed our first acquisition which brought into the Group an additional business operating in the DSA market, Amano Technologies. Subsequently we have made three further acquisitions, two of which are leading DE&I consultancy and training businesses, and two of the longest established businesses in the UK in those markets. Our fourth acquisition complements both the DSA and DEI markets, providing psychological assessments into higher education and the workplace.
Having brought together these businesses each with strong heritage in DEI and disability, we now have around 100 members of staff, spread across four locations across the UK.
Andy, since we last spoke on ‘Behind the Transaction’ not only has eQuality Solutions made 4 acquisitions, but it has also seen a transformational growth in the Group’s mission and purpose – can you tell us a little about that purpose that’s so integral to everything that eQS does?
Our purpose all started with a vision to be a ‘good business that does good’, and that is still with us today. Breaking that down: what we mean by being a ‘good business’ is one that makes money and is profitable because if you don’t have that, then you can’t do a lot. For us though, we get just as passionate about the second half of that statement, and for us a business that ‘does good’ is about unlocking barriers and helping people achieve their best, whatever that looks like. My personal mission is to make the world more inclusive and that’s driven from my own lived experience of disability, having two children who have both physical and hidden disabilities, which has given me a real view of areas where the world falls short of being fully inclusive.
I think having this real understanding of who we are as a business, what we want to achieve and with a big focus on why we do it, has been fundamental in being able to execute our Buy and Build strategy at such a pace. It makes it so much easier when talking to founders of businesses we are looking to partner with, when we can bring them on that journey and reassure them of why we want them as part of the eQS family.
Over time we have been able to broaden our purpose as we have diversified into both education and workplace with the acquisitions of The Educational Guidance Service, EW Group and Challenge Consultancy in 2021, enabling us to focus on unlocking barriers to education, employment, and life.
Michael, 4 acquisitions in under 12 months is quite a feat, can you tell us about the process you have gone through to identify / ultimately acquire each of the 4 businesses, and what you think about when really understanding the value that an acquisition could bring to the Group?
Initially, we knew that before engaging with targets, we had to understand what an ideal acquisition would look like. We spent time with RGCF discussing our strategy and understanding what we were really looking for, and importantly being challenged in our thinking. Once we understood what was suitable for our strategy, we needed to start engaging with targets and again RGCF supported us with a full market research exercise to identify businesses which we wanted to reach out to.
When assessing these opportunities, we always ask ourselves, is there a solid purpose and mission that this business has and that is aligned with our own? We are all about making a difference in the world, and for us that needs to exist in a business we are looking to acquire in order for us to consider joining forces.
Of course, there are many businesses that have purpose and that alone isn’t all that we look for. It is also important that we ensure that the organisations we were talking to are of a size and scale that are suitable for us and that the founders are committed to progressing our discussions. This validation process has been a significant amount of work which RGCF supported us with very well.
In each of the acquisitions we have made, there have been founders and a team who are brilliant at what they do. More often than not however, they have been constrained by capacity amongst the team which has historically been a real limiting factor for their business. When we look to make acquisitions as such, whilst many would think of synergies and removing cost, we are all about investment in the team, resource and bringing some of our capabilities to the table, such as in IT, Development or Sales & Marketing.
Our strategy is buy and build, not buy and take away, and what we really focus on is empowering the teams that we bring into our group and giving them the resources they need to really excel and take what they do to the next level.
Andy, looking back at the last 12 months and the businesses you have brought into the Group, clearly the fun (and hard work!) doesn’t stop at completion of the transaction, in many ways that’s when it starts. Is there anything you would share with someone looking to make one or more acquisitions when it comes to how best to execute an acquisition and what you have learned from integrating these businesses and creating one vision, one culture and one organisation?
For me the fun bit really does start after completion! That said, the earlier that we can start building relationships with the broader team, the better – even pre-completion where possible. For me it goes back again to that purpose: understanding who we are as a business and being completely transparent about what our vision is with the team that we’re acquiring is such an important step in the whole integration process.
The biggest takeaway from all the acquisitions we’ve done so far and why we’ve been able to make such good progress with integration so quickly, is all about culture and values. It’s fundamentally a ‘hearts and minds’ discussion in the first instance and aligning the culture and values of both organisations as they come together. We keep that purpose front and centre, and for us it really helps people buy into the whole journey, especially at what is a really difficult time for some employees. We have to be conscious of the worries and concerns that the team will have.
We’ve also learned over time that each acquisition must be treated as a unique business as there isn’t a one-size-fits-all approach for acquisitions. Whilst we have guidelines and plans for our future acquisitions, we know that these are only the start point, and that successfully integrating a business into our Group takes a flexible approach broadly centred around four strategic drivers: organic growth, data driven solutions, people and culture and M&A.
And finally, Michael, looking forward, what’s next for you both and Team eQS?
After we executed our MBO in December 2020, we embarked on a three-year growth plan. We are currently about 18 months ahead of where we expected to be on that plan and as such we are very much turning to the next phase of growth and mapping out what that looks like.
At the root of our purpose is legacy, and that’s what the next five years is about for us: building on the legacy we have and ensuring that we execute on the shared vision. We feel that we have a responsibility to the founders and teams we have partnered with, to execute on our vision and to grow our business by 3 to 4 times over the next 5 years, which is something that every member of our Group has bought into and will allow us to maximise the impact of the work we do.