- RollUpEurope
- Posts
- RDCP: Britain’s most audacious SME serial acquirer?
RDCP: Britain’s most audacious SME serial acquirer?
Shunned by investors, these 2 founders went on to acquire 40+ businesses
Alex Prokofjev
September 10, 2024
Disclaimer: the information contained in the article was sourced from public filings. The views are our own and do not represent investment advice.
It is quite possible that you have never heard of RD Capital Partners, or RDCP - a sprawling, quirky conglomerate of British SMEs drawn from verticals such as food wholesale, care homes, engineering, and niche manufacturing. Founded in 2015 by the husband/wife duo of Sameer Rizvi and Iryna Dubylovska, by its own account RDCP has completed:
44 investments that are consolidated into 12 portfolio companies, generating, on an annual basis, a combined $225M of revenue and $31M of EBITDA.
This, by December 2023 and with 0 outside equity.
Source: RDCP
Iryna’s and Sameer’s ambition clearly does not stop here. They aspire to “build the largest private company in the UK... A 21st century British version of Warren Buffett's Berkshire Hathaway”.
Sameer and Iryna
The more we researched RDCP, the more we got excited at what we discovered. We had not seen a programmatic acquirer like this before: smart, persistent, aggressive. Not institutionally backed.
In this article, we break down RDCP’s:
Origin story
Investment and structuring playbooks that have allowed it to take control of several £50M+ revenue businesses with minimal equity
Investment track record based on 3 case studies drawn from 3 industries: Pexion, SOS Wholesale and RDCP Care
Before we dive in… If you are eyeing SME acquisitions in the UK & Ireland, join us for the UK Serial Acquirers Summit in London on 17 October.
We are running an early bird sale for the first 20 tickets. Operators, founders, investors, lenders and brokers/investment bankers please get General Admission tickets. Everyone else, please get a Vendor ticket. Thank you!
But first: what’s the point of this article?
In 2015, when RDCP was founded, Iryna was 25 and Sameer was 23. What they may have lacked in experienced, funding or connections (as first generation immigrants into the UK), they have more than made up for in chutzpah.
Even though RDCP ostensibly hunts simple, steady businesses that would not be out of place in Lifco’s or Berkshire Hathaway’s portfolio, the real story is somewhat different from the image it has been cultivating.
As we detail below, some of RDCP’s investments have worked out, and some haven’t. At this point, the $500M enterprise value estimate is probably ambitious.
Source: RDCP
Make no mistake: this variability in performance does not diminish our respect for Iryna and Sameer. Occasional setbacks have done little to diminish RDCP’s thirst for acquisitions, backed by high street lenders such as Barclays, Investec and AIB.
There isn’t a deep pocketed family office backing RDCP, nor an adventurous VC. RDCP is literally a bootstrapped HoldCo!
RDCP’s origins - and its care home investment thesis
Iryna and Sameer had met in 2014 whilst working at a bank in London. Having witnessed frenetic levels of PE activity in the UK care home space, they decided to have a go themselves. The original plan was to raise a fund. The plan flopped: they returned empty-handed from a fundraising trip to Dubai.
Undeterred, the duo put their savings together, borrowed some money - and acquired a nursing home. Thus was born RDCP Care with the vision to “become a leading elderly and specialist care provider in the UK”.
RDCP’s St Nicholas care home in Powys, Wales
In 2019, Sameer and Iryna decided to have another go at raising at fund, this time with much more investor demand. In the end, they allegedly walked away, for this reason:
Being the founders of a £100M business that was built from scratch is significantly more impressive than being the fund managers of a £100M fund. The first option leaves us with total control and the ability to build much greater wealth. Whilst with the second option, we would always be overshadowed by mega-funds and consistently “boxed-in” and compartmentalized into the category of an “emerging fund manager
Meanwhile, the care home portfolio kept growing. In 2023, it reached £12M in run-rate revenue across 8 care homes.
On the one hand, with but a few hundred beds, RDCP Care remains a minnow in a market of 300,000. The reason it hasn’t acquired more is allegedly due to tainted deal flow: “either grossly overvalued or ensnared with CQC [the UK’s healthcare regulator] issues”.
On the other hand, the business is bankable to the point of supporting £11.5M in debt from Barclays priced at 2.3% above the benchmark (as at December 2022).
Once again: Sameer and Iryna own 100%.
Emboldened by this success, RDCP began to spread its wings. It has used the care business as a proto-depository, collecting management fees from firms lile Killingley and Chilango, and upstreaming cash to HoldCo entities like RDCP Group Limited and RD Capital Partners.