One searcher’s thirst for returns: 2 Olympic pools' worth of drinking water & 40% EBITDA

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Eminem or BIG?

Outside-in, a searcher’s experience sounds a lot like Eminem’s in “Lose Yourself”:

One shot. One deal. The payoff of a lifetime. 

What if you want to keep rolling (up) after the first deal? As we learnt at a recent Entrepreneurship Through Acquisition (ETA) conference, search fund investors and serial acquirers are not natural bedfellows, especially when repeat equity injections are involved. 

For HoldCos, the challenge is different and best summarised by Notorious B.I.G. in “Mo’ Money, Mo Problems”:

Can you have it both ways: attractive searcher economics (25% equity etc.) and a rollup strategy? 

You bet!

Enter Water Direct, a British provider of planned and emergency water services. The business was acquired by Adam Johnson, a London Business School MBA in March 2022, more than two years into the search process. Adam’s vehicle, Soris Acquisition, was backed by the Who’s Who of the ETA community including Ethos Partners, Miramar, Istria, Cabiedes & Partners - and of course Will Thorndike!  

Adam bought the original business for £16M, followed by three bolt-ons in 2023, which cost another £10M.

As things stand, this searcher is on track to achieve an 8-figure exit for himself. 

In this article, we reveal:

• The Water Direct business model including pre & post acquisition performance

• Acquisition metrics and structure

• Cap table and illustrative investor / searcher returns

What does Water Direct actually do?

Established in 1996, Water Direct supplies drinking water to two types of customers: water utilities (think of all the spillages and droughts!) and offsite users, such as concert venues and construction sites. All told, its c.600 clients benefit from the UK's largest dedicated fleet of water tankers and an extensive network of storage sites. 

Water Direct’s storage capacity exceeds 4 million litres (or 1 million gallons) of drinking water: nearly two Olympic-sized swimming pools!

Previously Water Direct was owned by the Heathcote family whose business interest span farm management, renewable energy and recycling. 

Water Direct’s pre-acquisition economics

At first glance, Water Direct may not seem like an obvious target for a searcher: neither growing nor recurring. 

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