Sam Turner·January 18, 2024

4 Acquisitions In, Holdco Builder's Goal is £150m | Sam Turner Interview

Sam Turner, a former 20-plus-year corporate finance and strategy executive in the UK, left corporate life to build Advant, a holding company acquiring mechanical and electrical (M&E, including HVAC) businesses, and returns to the podcast 18 months after his first appearance to give an update. Since then he closed a third and fourth acquisition (bringing proforma revenue to roughly £22-23m), weathered a serious crisis in his first acquired business — caught between fixed-price long-term contracts and a spike in material inflation, then hit again by a housing slowdown from rising interest rates — which forced him to raise additional equity from investors to shore up liquidity. He credits not integrating his portfolio companies, but keeping them diversified across M&E sub-sectors under one platform, with letting strong performers offset the struggling one. He has significantly expanded his ambition, extending his original 5-year, £20m exit goal to a 10-year plan targeting £150m in revenue and a roughly £50m+ valued stake, built around a three-pillar 'platform' model of cross-company collaboration, shared management expertise, and group-level services like marketing and tech-enabled business development. The episode is heavy on strategic and personal reflection — on resilience, being intentional about who leads acquired businesses, delayed gratification, and his philanthropic goal of sustainably improving 30,000 lives in a community in Thailand — rather than a blow-by-blow of a single new deal.

Deal facts

multiple: buying at 3 to 3.5x, targeting exit multiple of 5.7-6x (originally) / 7-8x (updated 10-year plan)
sde ebitda: Proforma EBIT ~£1.4m on first 3 businesses (15-15.5m revenue); with 4th acquisition, proforma revenue £22-23m and EBITDA just under 9%, ~£1.9-2m
revenue: Proforma £15-15.5m revenue (3 businesses, year ended June); £22-23m proforma with 4th acquisition added (~£7m more revenue)
financing structure: Raised additional equity from existing investors mid-crisis to shore up liquidity; 4th acquisition partly financed by giving the seller shares in the holding group (equity swap/paper) rather than pure cash
notes: Advant is a UK mechanical & electrical (M&E, including HVAC) holding company (holdco) buying and building via acquisition. This is Sam Turner's SECOND appearance on the podcast (first interview ~July 2022/2023, referenced as 'a year and a half ago'). At time of first interview: 2 acquisitions done, 3rd about to close, original goal was £20m enterprise value exit via £60m revenue at 10% margins in 5 years. Update: 3rd and 4th acquisitions closed (4th closed the day before this recording, both took longer than expected due to slow sellers). Vision now revised to a 10-year horizon (to 2033) targeting £150m revenue, ~11% EBITDA margin (~£16.5m EBITDA), valued at 7-8x, i.e. an enterprise value goal of roughly £50m+ for his own stake (previously ~£20m). Vision statement: 'to be the UK's favorite platform for independent mechanical and electrical businesses delivering more than £150 million a year in revenue within a 10 year time frame.'

Why this business

Turner spent 20+ years in corporate finance/strategy roles (including time at a PE-owned company) and 15 years living abroad, but became disenchanted with corporate politics, travel, and lack of control over his own destiny. He considered real estate but rejected it because it lacked the dynamism and people-development aspect he wanted. He took courses from UK business-buying educators (Carl Allen, Jonathan Jay, Jeremy Harbour) and chose to build a holding company (Advant) acquiring mechanical & electrical (M&E)/HVAC businesses in the UK — a large, non-cyclical, tech-underpenetrated blue-collar industry — because it let him combine his financial/PE background with hands-on work developing people and businesses. He deliberately stays within the M&E umbrella (rather than diversifying across unrelated industries) because sub-sector variety within one large industry gives him risk diversification while still allowing shared 'platform' benefits (cross-selling, management expertise, group services) across the portfolio.

What's working

Diversification across sub-sectors within the same broad industry (M&E) without integrating the businesses: when one portfolio company was badly hurt by inflation and a housing slowdown, another performed strongly, and the two roughly offset each other at the group level
Cross-selling/lead-sharing between portfolio companies is emerging and expected to accelerate non-linearly as more businesses join the platform (one incoming acquisition began referring work to an existing portfolio company before the deal even closed)
A 'platform' model built on three pillars: collaborative initiatives (cross-sell, joint purchasing, knowledge sharing), an internal 'Advant framework' (loosely based on EOS) bringing management expertise (vision/values, management accounts, scorecards, documented processes, common tech stack) to typically undermanaged owner-operator businesses, and group-level shared services (marketing, LinkedIn-driven business development, HR, fleet management) that individual $5-7m businesses can't justify building themselves
Using technology/AI as a competitive differentiator in a blue-collar industry where most competitors (often engineer-led owners) are far behind on modern go-to-market and business-development practices
Structuring a recent acquisition with equity/shares in the group as part of consideration for a seller who is staying on and aligned in values, rather than an all-cash deal
Building an advisory board of four non-executive advisers (met twice so far, roughly quarterly) that pushed back on his plans and forced more rigorous strategic thinking
Personal resilience practices during the crisis: routines, regular exercise, and gratitude/perspective ('your reality is somebody else's dream') to manage stress

What's hard

The first acquisition has struggled badly: it had long-term fixed-price contracts just as material cost inflation hit 15-20% (versus a historical norm of under 3%), crushing already-thin margins, and was then further hurt as rising interest rates slowed new-build housing demand and developers squeezed subcontractor pricing — a 'perfect storm'
Had to raise additional equity from existing investors mid-crisis because the group didn't have enough liquidity, almost entirely due to the struggling first acquisition
Both the 3rd and 4th acquisitions took significantly longer to close than planned (the 4th took about two months longer, mostly due to slow seller responsiveness while the seller was busy running a thriving business)
Realized in hindsight he was too opportunistic about who runs acquired businesses (sometimes the owner stays, sometimes a #2 is promoted) rather than being intentional; struggled to get traction changing the mindset of one owner-operator who wasn't aligned with the group's way of working, and changing an owner's established thinking proved very difficult
Most small M&E businesses (including the one he bought) are owned by engineering-minded operators who lack any intentional, technology-enabled approach to business development and instead rely purely on relationships and word of mouth, making revenue unpredictable
Extended his original 5-year exit horizon to 10 years, and moved from thinking about a single exit to a multi-stage capital-raising approach (potentially selling a minority stake to PE at ~£3-4m EBITDA, then further tranches), reflecting how much his thinking on end-state strategy had to evolve

Notable quotes

There's my argument again for diversification is still it doesn't have to be integrated to be diversified and I think actually probably the opposite is true that the less integrated you are the probably the more diversified you are.

You need to be able to withstand the pressure in order to create that diamond... your reality regardless of how bad your reality is your reality is somebody else's dream.

It's quite difficult to get change with people if they're not that way thinking, to try to change their way of thinking is very difficult.

Don't give up what you really want for what you want now.