GRC Pulse
2025 is going to be challenging.
GRC Pulse tells you:
what the accountancy auditors can’t tell you
what the competition won’t tell you, and
what the PE teams daren’t tell you.
Confidential, factual, accurate, and truly independent - the ‘top-two-inches’ highlights weekly the financial impact of events in your market and markets that impact yours. We cover your market, sure, but also all the related and neighbouring ones too. We’ve done it for decades, and done it for blue chips, founders, HMG, and innumerable due diligence projects.
You get the unvarnished truth.
Sure, it’s not free. If it was ‘you would be the product’, and we don’t do that - we’re truly independent. We want you to be as well informed as any investor, acquirer, regulator, or predator in the market - better in reality; and economics isn’t cheap.
Subscribe now and you can get the multi-user rate, however. Do it today and we’ll send you some recent back-issues so you can get up to speed.
2025 is going to be challenging.
GRC Pulse tells you:
what the accountancy auditors can’t tell you
what the competition won’t tell you, and
what the PE teams daren’t tell you.
Confidential, factual, accurate, and truly independent - the ‘top-two-inches’ highlights weekly the financial impact of events in your market and markets that impact yours. We cover your market, sure, but also all the related and neighbouring ones too. We’ve done it for decades, and done it for blue chips, founders, HMG, and innumerable due diligence projects.
You get the unvarnished truth.
Sure, it’s not free. If it was ‘you would be the product’, and we don’t do that - we’re truly independent. We want you to be as well informed as any investor, acquirer, regulator, or predator in the market - better in reality; and economics isn’t cheap.
Subscribe now and you can get the multi-user rate, however. Do it today and we’ll send you some recent back-issues so you can get up to speed.
2025 is going to be challenging.
GRC Pulse tells you:
what the accountancy auditors can’t tell you
what the competition won’t tell you, and
what the PE teams daren’t tell you.
Confidential, factual, accurate, and truly independent - the ‘top-two-inches’ highlights weekly the financial impact of events in your market and markets that impact yours. We cover your market, sure, but also all the related and neighbouring ones too. We’ve done it for decades, and done it for blue chips, founders, HMG, and innumerable due diligence projects.
You get the unvarnished truth.
Sure, it’s not free. If it was ‘you would be the product’, and we don’t do that - we’re truly independent. We want you to be as well informed as any investor, acquirer, regulator, or predator in the market - better in reality; and economics isn’t cheap.
Subscribe now and you can get the multi-user rate, however. Do it today and we’ll send you some recent back-issues so you can get up to speed.
A sample of recent coverage
Following the Science
Scientists say the world is made up of protons, neutrons, and electrons. Data scientists agree, but they add you mustn’t forget the morons too. There’s such a lot of talk around AI currently, that it’s easy to forget that it needs big data to really fly, and big data always has big problems. The issue as ever, and fire security and food safety teams know this better than most, is that within big data there’s always a lot of rubbish data. CheckIT below is one team wrestling with precisely this issue. AI may well help accelerate accuracy here, but this is one sector where ‘intelligence’ is actually a reality, not just a badge for more-of-the-same in management system development.
Once upon a time, there was a team in safety services based near Towcester who found a rich seam of clients by following the sales of fridges to the food service and other retail sectors. Following the fridge sales team and bolting on basic safety management systems took the business to several million in sales and soon far outstripped the white box shifters. So with Internet of Things (IoT) technology making lots of the equipment in retail sectors especially ‘intelligent’ to some degree now, the link between those and safety management systems is a rich seam of development once again. Technology teams are looking at it hard; advisory ones should be too.
CheckIT is a workflow technology team that knows compliance processes. They have a significant amount of business in the food compliance sector, but it is their focus on bridging three issues that is worth watching. Adding some low-code/no-code tools to the mix is intriguing also as in mid-market clienteles these are finding some real traction now. Taking IoT sensor data, marrying it to automated workflows, and capping it all with AI interpretive treatments of the outcomes is powerful. Adding a 93% SaaS business model to the mix and some chunky mid-market reference clients is promising too. A £12m international business, the impact in GRC services is currently c £1.5m in effect. Growing at 16.5% and investing £4-6m pa on an already £21m investment push means it needs watching. As ever the seed and VC teams are actually disappointed with the rates of adoption in GRC technology; 16% growth is way below what they expect, but patience here is being rewarded.
Insurers more than dabbling
PIB insurance group’s strategy is focused on EU expansion, adding Portugal and Romania to their list of ten EU countries in play now. Within this strategy the use of risk management consulting and advisory services is very much secondary, but still key to their added value propositions in their main business line - account exec led sales of speciality insurances. In a commoditising market, sustaining premiums here is hard and regulatory support is a key component.
At group level a focus on data science (and a nod to AI) leads with middle and back office systems integration to the fore, and is key to their acquisition integration operations. Summarising their prospecting strategy as finding teams that are ‘famous for something’ is neat. That boils down to a lower than usual client acquisition cost, letting Account Execs focus on selling that 'fame', and building back office systems that enhance rather than constrain that is the challenge. It explains why they stand off from what others call ‘quote-and-bind’ systems, in effect automating as much of the sales process as possible.
Backed by the Apax and Carlyle private equity giants, they can expert to sustain c20 acquisitions pa while also having close scrutiny of internal operational technologies. Sustaining a 30%+ (ebitda) profitability in this sector is impressive, however, and for a £463m business generating £132m 'profit' while carrying a £1.4bn debt load it is more aspirational than real when net operating cashflows are running at only 12.5% of sales. The appetite for ‘running hot’ is clear and reshuffling the debts earlier this year has refreshed the war chest, although a £50m budget for internal systems suggests they see major operational headaches in the short and medium term.
In amongst such heady high finance it seems churlish to focus on £5.5m in health & safety advisory services, but it is worth noting that this started as the Sigerson acquisition and Bailey Garner’s H&S division has been added now. Growing 32% represents only a partial integration of two £4m teams, but the makings of a £10m player deeply integrated into the insurance procurement process is notable in the market. Profitability has been modest in the safety team hitherto, and it remains to be seen if they know how to deliver the group 30% targets in this business model. Another division acquiring YouatWork, an employee benefits team, takes their regulatory consulting operations north of £10m overall, and this was an ambitious team with an investment history of over £10.5m focused very much on benefits technology.
While there is no clear evidence that differential country risks are applied to any material degree for overseas acquisitions (all within the EU), the median deal multiples are around the x10.4-10.9 profit multiples. It is notable that they will tackle deals of £1-2m as readily as ones of £25-50m, however, and ‘anchor’ acquisitions in new territories will attract premiums where initial multiples can be over 20+.
So with ARAG and DAS back in form too this means…
★★★★★
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