Why you’re getting this: this is the Arbor Permanent Owners Newsletter, a monthly email which shares our journey of building Australia’s first permanent capital holding company for lower-mid market SMEs. I send this to interesting people I've met and friends I want to stay in touch with. Zero pressure to stick around - just click unsubscribe if you don’t want to get it (don’t worry, I won’t be notified).
Last month, Mikk Markus who writes the PrivateEquityGuy newsletter (57k followers on Twitter) published a piece about us.
The article he shared about us was a bit different to this typical programming of interviewing holdco and ETA builders about M&A, deal making and private markets investing.
It wasn't about sourcing, or financing, or diligence, or closing the stuff everyone in M&A loves to talk about. It was about the part almost nobody does: what happens after the deal is done.
Mikk had interviewed my co-founder Simon - the theme of the whole piece was a single idea:
M&A is the easy part. The real work starts after closing.
Simon has bought and operated three founder-led, SMEs (<$50m of revenue). His view is that small businesses are messy, fragile, emotional systems and that the job in year one isn't to charge in and prove how clever you are.
It's to stabilise the thing before you try to scale it. As he put it: "Get into the mess. Understand the business as it actually works."
Traditional private equity and asset managers typically shy away from complete buy-outs of founder-led businesses at this size.
SMEs are typically not “corporatised”, meaning a lot of weight is carried by the founder.
For a buyer this carries greater risk - but if you’re equipped with inhouse capability to manage it (like we are), problems are solvable.
So when Simon and I size up a business, one of his first questions is whether its success is embedded anywhere beyond the founder. Because a company that only works because one person is a force of nature is far more fragile than it looks.
The revenue exists, the margins are stable, the customers are loyal - and the day the founder walks out the door, you find out how much of it was really just them.
It's the first test we apply to every business we look at.
And if we're being honest, it's a test we have to be willing to apply to ourselves.
Which brings me to today.
CEO appointment - Marcus Colman
I’m delighted to share that Marcus Colman is joining the APO team as CEO of East West Engineering.
At Arbor Permanent Owners we talk a lot about how crucial lived experience is when operating an SME. We believe there are three components to it:
Top tier professional training in the formative years. The rigour and discipline that only comes from cutting your teeth somewhere serious.
Leadership and capital allocation experience. Knowing how to lead people through change, and where to put the next dollar to work.
And owning and growing an SME. The lived experience that teaches you the "founder's mindset" - the single-minded growth and the resilience needed to grow an SME over many years.
Marcus has all three.
He cut his teeth at BAE Systems Australia, where as Chief of Staff to the Managing Director he ran the strategic turnaround of a 400-person advanced manufacturing division and managed an investment portfolio across AI/ML, energy tech and aerospace. Most recently he was CEO of Innovaero, Australia's leading SME aerospace business, where he took the company from a founder-led business to setting it up for an IPO on the ASX.
Marcus holds a Master of Engineering (Adelaide), a Master of Strategic Studies (ANU), and a Bachelor of Commerce (Sydney). His track record in scaling industrial SMEs and executing M&A aligns directly with APO's owner-operator model.
When we bought East West from Ron King, we made him a promise: that we'd steward and build on what he spent four decades creating.
You don't keep a promise like that with a board seat and a quarterly dashboard.
A business built to outlast its founder has to outlast its new owners too.
Please join me in welcoming Marcus to East West Engineering and the Arbor Permanent Owners team.
From the left, Declan Sheridan, me, Glen Richards, Rowan Grant, Simon Plummer and Marcus Colman
About Arbor Permanent Owners
Arbor Permanent Owners is a holding company that acquires and invests in exceptional, private businesses, deliberately built for long-term success. Our goal is to be the long-term custodian and permanent home of Great Australian Small and Medium Enterprises (SMEs).
We are actively looking for businesses with the following characteristics:
Business Model: B2B industrials: manufacturing and products
Business Size: $2 to $8 Million of EBITDA
Business Profile: Sticky B2B customer base
Business HQ: Australia
We are backed by a tightly-held group of co-investors, collectively on a mission to preserve the legacy of Great Australian SMEs.
Whether you’re a business owner interested in working with us, or an intermediary with a deal to share, I’d love to hear from you. Please email us at [email protected]
PS: We’ve got the financial capacity and bandwidth to do a $50m transaction today. If you phone us with a general description of your business and the sort of transaction you’re seeking, we can tell you immediately whether we have an interest. And if we do, we will swiftly proceed to an offer.
My number is 0432646634.
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