Entrepreneur Dez Derry had always self-funded his digital marketing agency mmadigital until deciding that he needed more firepower if he was to meet his growth ambitions.
He founded the business 10 years ago as a digital marketing agency for UK law firms.
The services offered included website design, online video content production and running digital marketing campaigns on behalf of solicitors on their own brands.
In 2017 he pivoted that business model into a customer acquisition business using tech and that’s when the growth really took off.
Explaining the business model he told TechBlast’s latest Going 4 Growth roundtable: “What we do now is we own our own assets, we own our own websites and we advertise aggressively across the UK on Google and social media platforms.
“We generate inquiries to our brands, qualify them in a contact centre based in West Didsbury and distribute them through a portal to law firms around the UK.
“In terms of the number of staff we’re got between 75-80. Our turnover is on a run rate of £20m. The ambition a few years ago was to hit £30m by 2025. That’s been accelerated because of the investment from Rockpool, which was one of the reasons why I wanted to get on the private equity route.
“They’ve given us funding for M&A so we’ve got a number of conversations in the pipeline. If one of them drops, that’s a £10m turnover business. I’m hoping that if we can get that over the line by the end of 2023 I’ll have achieved my personal dream and goal of hitting £30m.”
Derry said it was the first time he’s raised investment and was warned against taking private equity by his close network of friends.
“I met a few corporate finance houses to get a feel of what the numbers would need to be to have any credibility to even have that conversation,” he said.
“In Q1 2020 we started the process through a corporate finance house and met loads of people. At the end of it we ended up with three offers, a couple from PE and one from a trade buyer.
“The reason I went with Rockpool was purely down to relationships. I met them in Q1 and during the negotiations I really sort of gelled with the partner.
“The numbers were broadly the same so I went with my gut. It was more about ‘could these people add value?’
“Everyone I spoke to about PE said ‘don’t do it, don’t do it’ but having come through the other side I can say that, right now, it’s been the best thing that I’ve ever done.
“Don’t always believe third hand what people say about private equity. My experience today has been a really, really good one.”
The firms doubled turnover to £10m in 2020 and is set to smash its target of hitting £30m by 2025.
Derry said having Rockpool onboard had been vital in trying to make their first acquisition.
“During the deal process, at the back end of last year, Rockpool were already working with me before we’d completed to do some market mapping,” said Derry.
“I’ve never personally done an acquisition before so we have three potential ones at different stages. One is coming quite close to exchanging. It’s sub £5m turnover. It’s got 10 staff and we think that the platform would really enhance the earnings and the credibility of that business.
“We’re trying to go small first, get it right, integrate it, make sure we don’t make a dog’s dinner of it before we tackle a big one. The one that we’re looking at is £10m and a similar size to us.
“They’ve got offices that aren’t in Manchester so they’re out of the area. The one top tip I would give anyone, which is something I’ve learned in the last six months, is build out that top team like a CFO, COO, CTO, head of people etc.
“We didn’t have any of that but Rockpool have allowed me to invest in recruiting that talent.
“When we did our PE deal our management team was quite light and I really bore the brunt of it. It really takes its toll if you’re trying to run the business, raise money and do a deal.
“Now I’ve got this team of people and I’ve got Rockpool’s support goings into these negotiations to buy businesses. You’ve got the expertise around you and that’s really, really important.”
- Dez Derry has been chosen as TechBlast’s Star of the Week.
- If you’re interested in taking part in TechBlast’s Going 4 Growth roundtables email [email protected]