My Guests
After graduating from business school in 2008, Jay Davis & Jason Pananos acquired Vector Disease Control, a company that they grew from ~$7M to ~$50M in revenue in 7 years through successfully executing on 14 bolt-on acquisitions. They were able to grow the business by a 43% compounded annual growth rate before selling to a public company.
Jay & Jason are also co-founders of The Nashton Company, a holding company focused on making long-term investments in private, recurring revenue service businesses.
In addition to their investing activities, both Jay & Jason are Lecturers at Harvard Business School, where they both earned their MBAs in 2008.
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From $7M to $50M via 14 Acquisitions: A Consolidation Success Story With Jay Davis & Jason Pananos – In The Trenches
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Questions Asked
Introduction
- Please share with us the arcs of your respective careers, including your acquisition of Vector Disease Control
- Can you share with us the realities of starting your search in 2008, during the great financial crisis?
- How large was your company upon acquisition, and how large was it at exit? What were the major drivers of that growth?
- What was the original investment thesis going in? How deliberate or clear was the inorganic growth thesis when you first acquired the company?
The Operator’s Perspective
- How did you know that you were “ready” to do your first acquisition? After acquiring your first bolt-on, how did you know that you were “ready” to acquire your second?
- What types of “enterprise controls” should prospective consolidators have in place within their own companies before they look to acquire others?
- Beyond sheer size, what specific benefits did you think inorganic growth would provide the company with? What was the “1+1=3” that you identified in your industry?
- What major lessons did you learn in your first acquisition that you then leveraged in subsequent acquisitions?
- How much change should one execute on early in their tenure as a CEO?
- How much easier was it to sell yourselves as buyers when you were viewed as a strategic versus when you were viewed as an entrepreneur looking to buy a business?
- How did you think about pacing your acquisition activity?
- How did you think about doing a large number of small deals, or a small number of large deals?
- How did you finance each of your bolt-on acquisitions?
- How much do you think you benefited from the ZIRP policies that were in place while you were rolling up your industry?
- What did you learn about working with bank lenders versus mezz lenders?
- How important is the platform company in a roll-up thesis?
- Please tell us a story that illustrates how hard the integration process is
- Generally, who actually performs all of the highly detailed, on-the-ground work required of any integration?
The Investor’s Perspective & Concluding Questions
- How do you think about investing in consolidation theses today?
- Do you invest in consolidation theses where a platform company hasn’t yet been identified? Why or why not?
- What have you learned about building and maintaining a healthy partnership?
- Do you follow any rituals, routines or habits that help you maintain your relationship as partners?
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