Stuart Holness was Non-executive Chair at Clear Review, which Mercia exited in July of this year. The exit of Clear Review was an 8x on Mercia’s managed funds. Find out more about Stuart, his role at Clear Review and the advice he offers in helping other NEDs during an exit process.
How do you typically decide which portfolio roles to take?
My background is mostly in technology or technology enabled businesses, so generally that’s my starting point. The size of the company isn’t really a factor as I have been involved in a wide range, businesses from 10 employees and early revenue, through to those with over £500m revenue and hundreds of staff. What’s more relevant are the challenges the company is facing and the thornier the issues the better. There is a real sense of satisfaction helping a team move from where they are today to a successful exit, whether that takes M&A, refinancing, or wholesale people and systems changes. None of these things are overly complex; yes, they may be hard work, but well-lead and motivated teams will generally always get there with support.
What has been your most interesting role to date?
Probably creating Prolabs. We had a marginally overlooked set of products within a large business that under closer scrutiny made exceptional levels of margin, had little serious competition and was ripe for acceleration. We spun out the handful of staff involved, creating a new stand-alone business from scratch inheriting some existing major contracts. Our ambition was to create the global leader in the segment competing with the major brands head on, such as Cisco and HP. We grew rapidly, acquired the major US competitor and sold out to private equity within 4 years. Very pleasing for all!
When you were at Clear Review, what initiatives did you work on which were particularly close to your heart?
I am a Non-executive Chairman. The founder Stuart Hearn was a natural CEO, though this was his first true CEO role. He had a good team around him and with only a few minor changes we built a great executive team to support him. The business was doing really well, and then Covid hit. We re-planned rapidly having identified that the products were even more important in a remote working economy and continued great growth, despite trimming our costs back ‘just in case’. For personal reasons the founder wanted to exit to achieve a greater work-life balance. We therefore accelerated an exit two years ahead of plan, and achieved a brilliant trade sale at an absolute top of market multiple; all testament to the hard work of the founding team.
What single piece of advice would you give to help other NEDs during an exit process?
Sorry, two pieces of advice! Firstly, during the exit process ensure continuous communication with the core management team and associated help (legal, finance, investors). We held daily reviews to stay on top of everything no matter how seemingly trivial at that point in time. Secondly don’t underestimate the plain hard work and a sense of ‘can-do calm’ for management who may never have been through his frankly odd process of selling their ‘baby’. They need reassurance and to know that whilst of course there will be bumps in the road, when properly prepared, these will always be insurmountable.