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In conversation with the CEO series with Ruby Sheera & Mark Brooks-Wadham

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Ruby Sheera

November 8th, 2022

In conversation with the CEO series with Ruby Sheera & Mark Brooks-Wadham

In conversation with the CEO series, returns with the interview of Mark Brooks-Wadham, the former founder and CEO of Charterhouse Group. Mark is an experienced technology entrepreneur and CEO. He is well-versed in working with private companies as well as private equity. He's driven growth both organically and inorganically and has recently transitioned from a CEO into a Non-Executive Director serving on his own company that he started.

Having sold Charterhouse to August Equity in 2018; we are here to talk to Mark about some of his experiences and learning.

Watch the interview here, or read the transcription below:

Ruby

Hey, everybody. I'm here today with Mark, and Mark and I are going to be talking about some of his experiences. Mark is an experienced technical entrepreneur and a CEO. Previously, he's been well versed in working with private companies as well as private equity. He's driven growth both organically and inorganically, and he's had extensive experience and has recently transitioned from a CEO into a non-executive director serving on his own company that he started.

And we're here today to talk to him about some of his experience and learning. So there's two particular companies which are quite interesting. And what I'd like to start off with is I'd like to start off by asking Mark if you could provide us a little more insight into those two experiences.

Mark

Morning, Ruby, and thanks for thanks for inviting me on I guess 2 really different experiences, actually, Ruby. I set the first business up - London Office Systems when I was 22 so I guess I had a sort of natural entrepreneurial sort of bent towards my, my thinking and I set that up kind of mid to late eighties and it was a really kind of a booming time.

And I think the backdrop to that really created how we drove and ran the business and that was predominately around voice telecoms and print, and we grew that really strongly. So, age 22 by 25 we had about a hundred people in the business. We had locations in six locations in the Western locations out in Hertfordshire. And to be honest, I thought I was probably the next Lord Hanson.

And then I got a kind of a, a big reality shock, you know, when the early nineties hit and you know, we built the business without really thinking too strongly about cash flow because it had kind of come really easily for us so I then went through about two years of really trying to sort the business out from what was just pure growth into something that was sustainable and manageable and actually had a kind of a potential going forward.

And that was a huge learning curve and really kind of instilled a lot of disciplines and I would say the first four years of the business were hugely enjoyable and was a real rollercoaster. The last two years were actually very painful, very difficult but in terms of the learning curve, absolutely huge and probably very formative for what I then went on to do.

Ruby

Or what happened with that business. Did you sell it? We wanted to provide a bit more context.

Mark

Yeah. So, I did sell the stretch in the late eighties. I thought I would be retired at sort of 28, 20, 1929 and you know, obviously off into the sunset we did sell it and I did sell it in 92. But the fact that I then sent charts section house up in 93 probably tells you that we didn't quite, you know, ascertain the funds that we thought we might for the business, but we sold it successfully.

But you know, it was it was a dramatic learning curve and actually as I say was, was really what instilled in me a lot of disciplines moving forward.

Ruby

Now tell me a little bit about Charterhouse because that's, that's also you obviously enjoyed the experience, got some great learnings from it, and then didn't take much time off but three so straight into the next venture could you give a context as to what was your vision when you started and where you are now and how that sort of jibes.

Mark

Yeah. So, I think that the biggest change is I took a very different approach when I said Chantale. So, I think when we had the previous business, we had kind of big overdrafts and funding and it was really kind of, you know, fuel the expansion of relatively easy financing. It sometimes was very different. I came into it with a very different perspective, and I actually grew the company right up to the point of sale with August completely organically and all our working capital and cash flow.

So, for that sort of 25 years that I had the business before we joined forces with August, there were no loans, no overdrafts, no debt in the business. So that was probably the biggest change and it was all about at that point, making sure that the systems that we didn't have sinister, heavy, right in the first business with the right systems, we had the right processes and we spent a lot more time developing people and the business was growing in a much more conservative way, very much around, you know, coincided of the industry moving later into things like cyber.

But it was a very conservatively run business, organically grown, really concentrate eating on our customer experience, concentrating on that proposition, ensuring it was relevant at all times for our customer base and place so those I guess we could see two biggest differences in building the two businesses, really.

Ruby

And at the point you decided to go out and seek investment what was the rationale behind it? What was your what was your desire behind doing?

Mark

So, I think it's a really interesting question. Because up until a couple of years before we started to work with Auguste, I hadn't really thought about selling the business and, you know, I was really enjoying the business. We growing. It's a lot at 20 million. We had a really good client base, had a very, very loyal kind of group of people working with us.

But we started to get quite a lot of offers coming in and approaches from both trade and private equity. I spent about a year working out whether I wanted to kind of go down to the trade sale route or go down to private equity, and a fairly quickly came to the conclusion that it was a lot left for us to do with Sheldon Adelson.

From a personal perspective, you know, I'd invested so the heart and soul into the business and I couldn't see myself moving on. But equally, you know, the chance a house now needed to step up and really accelerate its growth forward and being really conservative and growing a really strong, great business but probably held it back a little bit because we could probably grown it slightly quicker had we been perhaps more adventurous, you know, earlier on.

So, I decided to absolutely pursue the private equity route. As I say, we had a number of approaches from private equity, and we nailed and we kind of boil it down to about three different PE houses. Then we got down to two and we were talking to in great detail and during that whole kind of process, we, we, we appointed BDO as advisors, Paul Russell, who running kind of the M&A side of BDO in tech, so we were working closely with Paul in the process and then narrowed it down and chose August.

And you know, it was it's a very interesting process. When you build something, you feel it's part of you and you're really excited to kind of move on to the next phase. But equally you want to make sure it's the right route forward and having spoken to a lot of people felt that, you know, August were absolutely right.

P House first it spent a lot of time with Nikki. Tell a mike. But all through the process we did a lot of kind of portfolio referencing from other businesses that they'd acquired which came back really, really strongly. They were very proven in the buy and build arena and that was really important to us what we wanted to do with the next stage of child house growth.

And I felt you know, they also had really pertinent experience to us at that stage. We really started to build out the cyber business. They had very strong cyber credentials. So, it felt like a really really good fit. Ruby And we transacted right at the back of 2018 beginning of 2019 with August.

Now there's probably a number of entrepreneurs, business owners and founders in a similar situation to you now and this you know the economic climate is changing quite dramatically and if they're sitting there thinking about making that decision, you know jumping in and working with private equity, there's a lot of nervousness that goes on, you know, about loss of control and your own role in your role changing and what PE would bring could you just talk through what some of those concerns were and what the reality has been because you've now been in for a couple of years, are you well and truly past the honeymoon period, but be good to just get a perspective?

Yeah, I think being completely open about it however much you think you understand about moving into the P world from a kind of an older marriage perspective, you probably don't know that much and your kind of you do your homework, you do your research. And I think the one thing you can absolutely get right and do is ensure that the individuals and the PE house you got to work with are a good fit for you.

You can't, you can't gain a lot of insight and experience into working PE to actually do it. You know, you can read up on it, you can talk to people, but you've got to get into the practical aspects of it to really feel it and taste it. But I would say you got to make sure the people that you're going to get, you know, into a working relationship with a people that you want to work with every day.

And it's intense. You know, if you haven't been in that environment before, nothing quite prepares you for it and you kind of think you've been working at a certain speed. And I remember Paul Russell gave me a very good line when we were actually transacting with with August. He said, what we're going to now find is that, you know, as we work towards completing the transaction, you'll be standing under a waterfall.

You can't turn off. And that's what it's going to feel like. But you get through that and then you kind of delighted and then you move into the next stage, which is reality. And all of a sudden, you've got a new partner and actually not just a partner, you've got a new owner. And it can be daunting. And I think that's were finding the right chairman to come and work with a house and, you know, the assets being acquired by the House is really, really important.

So would I encourage people to move into the P world if they were not a founder I absolutely would, providing they're realistic about what they want to do with the business and if they've got the right plans for the business. I think that's really important. You can't go into it not knowing, you know, what the outcome should look like and what the objective is.

And we work very closely with all of us about what that look like, which can be a lot of comfort could I say that we were on the same page and, you know, Nikki and Mike were very supportive and insightful, so I, I would be very positive about it. But I go in kind of eyes wide open that you're working with the right team, the right people.

Ruby

They touched on the chairman being quite important to a chair, just be politically correct on this occasion. Is the chairman.

Mark

Sorry? Absolutely right.

Ruby

What I was going to say was, you know, there's a lot of people a lot of CEOs I know who are in the situation that we've just described that you're making that transition. Owen, a fan founder, bringing in new investment. And then this whole concept of a chair and there's a school of thought of what the chairman is?

It's just going to take a certain number of equity off the table and add no value. And there's another school of thought which is actually the chair is absolutely critical, both from a fund perspective and from the asset perspective. Can you talk about your own personal experience of having the chair, who that chair was and what they brought to the party? 

Mark

Yeah, it's a really interesting dynamic because when you when you've built and run your own business, you kind of sit there and perceive that you know your business better than anybody else. So why do you need a chair and you know, going through the process with August, I fully understood it was it was it was part of the structure that you'd have a chair there.

And the agreement that I had with August was I would look for the chair and then I would put the chair to August to make sure that they were happy with that. And that gave me some comfort, actually, I'd be very involved in the process and finding the right person. And I probably interview ten or a dozen different chairs and then I met Peter Manning, who is a chair at Charterhouse, and I was I was very lucky to meet Peter and almost immediately you know, I realized for the first time he was somebody that I could really hugely learn from for me, I was probably sceptical at the start.

As I moved through the process and started working with the chair, I found it incredibly valuable and I would really stress to anybody that's looking to make that transition that that chair role is imperative both for the asset and the people so they can get it right it's fundamentally, hugely value adding. And it was for us as a business, and it certainly has been for me personally as well with Peter.

Ruby

OK, thank you. Another question, and this is a bit of a personal question, again, an experience which I think is a lot of people out there that be interested in understanding what it was like. You've transitioned from a CEO quite actively involved CEO into non-executive director and a new CEO has come in situ. How was that experience?

Mark

Difficult. I think, you know, it would be I, I got approached by Peter a year or so ago, about 18 months ago. So now ask him to commit for another few years to the business, to the first. I thought I absolutely would and then I kind of thought about it at that stage of being at the helm of the business for 28 years.

And to be fair, you know, it was probably time for me to start to look at other things. And Peter, Peter was the one that suggested to me, why don't you look at it career? I think he'd be very well suited to that chair of a business coming in from an older manager perspective. Into an environment with all that you kind of gone through and understood it.

So I think initially it was very difficult to answer your question really. And I think, you know, you you're so used to looking through a certain lens and all I've done for 30 odd years was run businesses and you have to step back and indeed if you've got a great CEO you know, he's doing a really great job for us.

But yeah, you have to start to look through a different lens among plaid now that I'm kind of going down that route and changing 100%. Yeah, yeah, absolutely. But yeah, it was, it was, it was difficult mentally making that transition at the time.

Ruby

But now during that time you so August invested when it was 20.

Mark

Really beginning 2019.

Ruby

2019. So you had the wonderful COVID experience as well still as CEO at the time and you, you went through a number of acquisitions yeah. I think what be really interesting is if you wouldn't mind sharing some of those experiences just before we transitioned into the non-exec role because you were very active would you and could you just expand a bit more on what that experience was like.

Mark

Yeah, I think that was a game changing period for us in terms of the acquisitions that we brought into the business. And it was, it was critical that we found businesses that had reminded us in a number of different ways. Katy propositioned technology, but culture people and I really enjoyed that whole process. So, I think where I was able to to add a lot of value were how important it was to them.

Probably one of the biggest decisions they were going to make in their lives or the team's lives in leading those different acquisitions that we made. And I was able to be brutally honest and say to them, you know, this is going to be a really difficult process. You know, you're going to go through a lot of heartache. And trust me, I've never been through one acquisition.

We're at the ninth or the 11th. We haven't had a problem. You know, there's always something thrown up and you can get through it, but there's always something to get through. I think they were quite surprised how honest I was. And rather than just sitting there saying, this is going to be great, and become part of the group and have you in, I was really, really kind of, you know, open with them about how difficult the process can be at times.

But actually, you've got to keep it. Our goal is at the end of it. But, you know, we'll get through this together and it will be really good relationships with all the founders of the businesses that we acquired. Is a process I really, really enjoyed and made a huge difference to us as a business.

Ruby

How many acquisitions that you lead and folded?

Mark

We did five acquisitions in about 18 months, and it was very interesting because the first two acquisitions that we did, one happened in January, one happened in February, and then we went into lockdown in March. So, we literally hit the buffers with lockdown. Having just done these two acquisitions, one of which was up in Liverpool. So very difficult to get then get up there.

And I think it was a real the real testament to August as well. That, you know, we've gone through this in a really great first year with identified some good acquisitions. You know, we executed those acquisitions and all of a sudden, we went straight with lockdown. But the first two and it really, I think, brought the team together and I think, you know, not only work together, but it really, you know, bought the group of us together in terms of, you know, having to deal with everything that was put in front of us.

It was a great learning curve. And I think a real testament to all of us as well.

Ruby

That's quite interesting. Quite an interesting story because, you know, you go from looking at the final sort of period of your journey with Charterhouse. You know, here's a business. You've grown for ages. You go through a transition with August, you then leave the acquisitions have COVID, which is a once in a lifetime experience. Hopefully for most of us.

You then sort of make that transition from CEO to now non-executive and I hope you'll be looking for other non-exec roles and looking to expand your experience to share them with other people. That's quite an interesting journey you've been through there, Mark.

Mark

Yeah, and I guess some of the takeaways that that really make me smile, Ruby are, you know, when you look at the acquisition side, when people tell you that integration is easy when they tell you that cross-sell is easy, it's not till you go through these things that you really appreciate the kind of the intricacies involved with them.

And I think it's I guess for us to puzzler passionate now about going on to the next stage is, is having built a business, having sold a business having grown that business and then all the things that go along with it, you know, from the debt raise, changing Exco, you know, processes, systems, all the things that you would imagine and having to make some pretty difficult decisions.

And, you know, I guess one of things we didn't we do business with a lot of people have been very loyal to you. Are they you know, often are really great when you build a business from zero to 20 million but nobody might not be great we go from 20 to 60 million so you got to make difficult decisions and you know I think the journey that I've been through, you know, I'm really looking forward to using that to help, you know, other businesses that are coming out of the old manage environment into the world really well.

Ruby

Thank you. Thank you very much for sharing your experience with us. I'm sure there'll be somebody somewhere listening to this that we are very appreciative of some of those words with the mark sort of. Thank you very much for your time.

Mark

Thanks. We really appreciate it. Thanks.

 

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