Bill Canady: Welcome everyone. It's Bill Canady with a thousand days CEO. Today we are honored to have Christophe Piron European CEO, CFO, and M&A leader As a CEO of Bihr Christophe helped turn the company from a French market leader into a European powerhouse, doubling revenue 220 million Euros and quadrupling operating profits. He led acquisitions across the United Kingdom, Belgium, Germany, unified the business under one management and technology platform, ultimately negotiating Bihr sale to Arrowhead Engineered Products. That's where I came in. That's where we got to know each other He went to Ecostal Group, raising $100 million there, and completing three cross-border acquisitions as part of its expansion from Belgium into a pan-European renewable energies platform. Today he is founder and CEO of Canbelis. And serves as interim CFO of E V S broadcast equipment. How you doing?
Christophe Piron: I'm very well. Yourself, Bill.
Bill Canady: Well, listen, it's fantastic for you to be here. You have sat in so many different roles. you've been the CEO, CFO, you've led integrations, you've done it around the world. You know, talk to us a little bit about what that looks and feels like and the challenges that you've had to deal with.
Christophe Piron: It's true. Actually, I've worked from origination to execution integration on 23 deals for a total of 2.3 billion. And I can tell you there is no deal which are equivalent to the other. And strangely enough, I think that the smallest one were the more the most difficult in integration terms.
Bill Canady: I find that same thing. The smaller is harder. You got to
Christophe Piron: Of course.
Bill Canady: do your piece and their piece.
Christophe Piron: and their piece and when you the acquisition is done you don't have the size the management size to integrate on the acquisition part so actually now when I see businesses willing to acquire small companies I tend to be reluctant and and tell them, you know what, you're probably underestimating the fact that there is no middle management enough in small companies in order to to lead the the integration, and that makes it bloody complex. And that actually was true. The biggest one, okay, fine. The ticket was much more much bigger, but in the end, much easier to put in the company.
Bill Canady: That is so true. You know, it's funny. I I'll go do a small deal. We like buying products and things. You you know about that. And and so the person you're gonna buy it from, we'll just say the guy. So you meet his attorney, it's his divorce attorney. You meet his accountant, it's the guy that does his taxes. So no one has any deal experience. And you wind up finding that you have to close their books for them in many cases. You have to show them the deal piece, and then some of their advisors want to prove their worth and they actually can kill deals, right? Instead of getting
Christophe Piron: Absolutely.
Bill Canady: through it and and and being kind of good partners, it's hard. How do you handle it?
Christophe Piron: Well, I actually you made a very good point. I mean, many times the advisors are a pain, an additional hurdle to the success, and getting personal relationship with the buyer or the seller is absolutely essential. First, to really understand what drives them, what drives the sale, what drives the acquisition, what drives the reason. And once you Understand them, I mean the negotiation becomes much easier because sometimes you know the advisor are are focusing on on stuff which are absolutely not important to the to the principles. And they are they are making it's just a additional Urdos and a number of times where I said, if we want this deal to continue, you know what, you and I. We will go outside together. We will have a good a good dinner. We will have an afternoon together, and we will try to understand what blocks. And it takes no more than two hours, most of the time, to unlock the deal. And then you have a handshake, and then we go back to our advisors to tell them, okay, this is what we want, and that's it. And it works perfectly.
Bill Canady: It's so well said. You know, the the issue, it's just factual, is a lack of trust. You don't know them, they don't know you. They feel like you may be taking advantage of them. But you know, the honest piece is this may be the one deal they do in their whole career. And we can't afford to have our reputation sullied by doing anything than then right down the middle of the road. But they don't know that about us. And so taking that time to get to know them, taking that time, they can see inviting them in, helping them talk to other people we've done deals with can really make a big difference in that.
Christophe Piron: So that that's to me it's essential. And and also, you know, sometimes you see people blocking on on certain aspects of the deal, which you simply don't get. And then by just discussing, by just understanding their their needs, sometimes you propose something a bit different which is absolutely neutral to you. I mean it's no better, no worse than the other proposition, and it's done. And that's really and that also creates the the trust to continue to work together afterwards. And to me that's that's absolutely essential.
Bill Canady: I really agree with that. you need the owners and the key to leadership. You like to for them to stay forever. It's not always the case. When do you find that as an acquirer, it's important to start imposing one system? You know, you get them integrated into your platform, one culture, one operating cadence, right? When, when should you do it and when should you lose leave the business alone?
Christophe Piron: When the companies I I worked for were really willing to acquire a business which is totally equivalent, you know, same thing somewhere else or same thing, same place, then it makes sense because suddenly, you know, you will see your working capital more clearly, so your inventories, all your stuffs, and it's become much easier to manage and to drive synergies. That's number one. when did I leave it alone? When you know it's a diversification type of business. Let them run, let them go, let them develop, give them the means to grow, but don't force you know a system which is not probably applicable to the to the way they work. And try to understand them, try to get to get the best out of it, but let them grow. I'd like to talk about a failure I had. It's a company we acquired in in Germany, sizable. I mean sizable, everything's relative, but still 40 40 million business. Okay. X outstanding contact with the CEO, outstanding. And very, very, very nice guy. And we worked together for a year, and he was actually blocking the integration while it had to be so. And at some point after a year, we go for dinner together and said, You know, Christophe, I'm tired, I'd like to leave. it doesn't work. I said, I agree, it doesn't work. Our teams do not, you know, talk together, it doesn't work well. But Very nice conversation, nothing. I mean, we got along well as human beings. So we agreed he would leave. And then I asked him, but what happened? You were so motivated during the deal. And he told me, you know, Christophe, when I was CEO of that company, I didn't have cash. And I didn't realize that. At the moment I would sell, I had this type of amount of money on my bank account, and now my life is changed. And frankly speaking, waking up in the morning to do what I used to do in the past doesn't make any sense and I cannot motivate myself. And I thought that that was very honest from him. And that's something I'm checking all the time now when we're acquiring a company. Is does it change the life of the person? And is this person ready to continue under those new circumstances? And and that person in particular, he said, you know, I simply want to sail now. I want to go on an island, sail, and I will be happy. And that's respectable. I mean, the guy has worked a lot, he does the stuff, and he go and he apologized himself. He said, I truly apologize. I didn't expect to feel that way. And I think he was really sincere. But that's to me that was an eye-opener to okay, pay attention to what's next for that person, what does he plan to do with the cash he got? How how will he react? How do we prepare succession? Because that may come in any case. So but that's to us was a failure because we we struggled afterwards to find the number two and to ensure the succession of that of that business.
Bill Canady: You know, that is so insightful. And every founder led comp or every private company, I should say, that I have bought, the culture before was they were frugal and so they led a certain life, even though they had this massive asset, everything was tied up in it. And so their life was pretty normal. Now all of a sudden they're made wealthy, wealthy beyond their wildest dreams. It was a small company, it was very, very profitable, and we paid 112 million dollars for the business. So how do you plan for that? What do you do? What do you look for?
Christophe Piron: first now I try to avoid that situation and and make sure that there is a very strong number two.
Bill Canady: That's the key.
Christophe Piron: so that's because you cannot control it. You know, some people are just workaholics and they will continue anyway, but not everyone is like that. And and
Bill Canady: Not everyone's there. And sometimes the workaholics, you don't mind if they kind of retire anyway. You you need to get the company into your culture.
Christophe Piron: That that that's that's true because you you you tend to have a problem to take the control on those companies. The point is make sure you have a strong number two, or make sure within the company already, or make sure that it wouldn't be too difficult to find someone who can lead that business quickly. and pass the baton, you know, in in a very friendly way with the with the existing owner. To me that's essential. But if I have a little doubt about this, the possibility to have a number two inside or outside the company, then I don't do the deal.
Bill Canady: Mm-hmm. in most private equity businesses, we like buying priv founder-led companies. There's a lot we can do with them in professionalizing them and putting them into our system. But I count today on a hundred percent of the people leaving. and I look very carefully at that number two. What is the capability? So we'll spend time. With the founder for all the obvious reasons, but we'll spend an unusually amount of time with whoever we think their successor is, getting them a good contract where they feel comfortable, getting them into our culture. What do you do about the other pieces of it though? what do you do about like the systems and and the back office stuff? Because Most of the deals we do, we depend on the synergies, in other words, the cost out or the go faster pieces.
Christophe Piron: Mm-hmm.
Bill Canady: How do you push that in?
Christophe Piron: First, the first thing I try to do is making sure the companies we acquire, the the actually the sellers are reinvesting in our business. So one level above. Why do I prefer that over earnout? It's simply because they will be the first actors for synergies, you know.
Bill Canady: Mm-hmm.
Christophe Piron: I really tend to bring them up front. Otherwise, it will always be a discussion. yes, but if you implement this, it will it will be a burden for us, it will we will have additional costs. So I don't want that because my earnote won't be good, because this and that. So the first thing is bring them a level higher a level higher in the in the org so that we have them fully aligned with the the value creation for the group and not for themselves. So that's number one. And we tend to do that, with the the key people. So not only the the CEO and the seller. But the key people, so everyone within the acquired organization, so that they're not thinking about their own piece, but they're thinking about the group. If you have that, it becomes much more easy to have the people. Thinking about okay, what really makes sense, you know. And if they find that putting an air an ERP, putting the stock, the inventory together, sharing the client's list, you know, doing normal integration type of things, everything becomes easier. Because you're just aligning the incentives of everyone
Bill Canady: Mm-hmm.
Christophe Piron: who is in the organization to the inter to the organization's interests. And to me, that's really something I push. And if we do that, you know, we think together. I'm not the type of person who thinks, okay, we need to take the holding or the group's ERP system at all costs because we we have already done that. I prefer having you know people thinking all over the the place about what truly makes sense for the group. And if there is a better tool at the acquired company, let's use that. if it's better somewhere else, let's you let's use it. But so that they are all thinking not about protecting their own kingdom, but really thinking about the interest of the new group.
Bill Canady: Earnout is another language for saying you're gonna get sued, right? Because
Christophe Piron: Yes.
Bill Canady: you you you put it in and then if you wanna integrate the businesses, which we typically have to if we're gonna be successful, they're gonna yeah, it's not gonna go as well. They're gonna injure their earn out because the resources are are diverted. Is there one place you tend to focus more than other are there there's certain levers you pull that you feel you can count on to produce results?
Christophe Piron: depends on the type of business. But in general, I will start with finance to make sure that I have the good dashboard and the facts and figures to be able to manage the company, not on
Bill Canady: Mm-hmm.
Christophe Piron: feelings, but on on hard facts. So I would
Bill Canady: Mm-hmm.
Christophe Piron: certainly start by that by that. And depending on the type of of businesses, but I would say I've done 80% of my career in in wholesale. So there operations, inventories, you know, all those stuff where it's it's thin margins. So being extremely efficient there truly make the difference. And and often in working capital, there's a hell of a lot of money to to bring back quick to the shareholders. That that's most often where if you're really fast. in in in slimming the working capital, I know you're a big fan of the of the eighty twenty, but but that that's really it it's making sure that you you spend your time on the most important clients that you stop with slow slow turning assets this type of things and there is a hell of a lot of money to to be brought back to the to the shareholders and super quickly in the end it's a matter of a few months so that's where I
Bill Canady: I agree. The two things that flow through the quickest is pricing. you can look at your pricing and get it correct, you can drive growth and and profitability. And the second one is you've got stacks of cash sitting on those shelves and all those warehouses no one's looking at. How do you get those out? How do you monetize though? Because not only do you get the money for it, you also don't have to continue to carry the cost of maybe you don't need that warehouse anymore. some of this inventory ages out, either becomes unusable or the market just moves on to it.
Christophe Piron: That's a good thing.
Bill Canady: Is there something else that you really pay a lot of attention to that that you find is is pretty important?
Christophe Piron: Obviously culture, I tend to you know test it before the deal because there I mean changing culture is something extremely complex.
Bill Canady: Yeah.
Christophe Piron: when we work together, by the way, that's a good that that was one of the tricks, and that was one also one of the reasons why I left, by the way.
Bill Canady: working for me was miserable. That's why most
Christophe Piron: We used to work for a family business where
Bill Canady: Yeah.
Christophe Piron: the time horizon is extremely long. So I was leading that company, leading Bihr, for four or five years, I think, with time horizons, which are obviously much longer than what Arrowhead had, because owned by a private equity owner. And the choices to be made were naturally totally different. And the reason why I left, not because I disagreed with Duch those choices, but I found it extremely difficult to explain to a team where you told them this is where the north is. And obviously the north is not at the same place when you have a shorter time horizon, right? I simply thought, well, you know what? I might not be the right guy to to to lead. We with such a a quick change of time horizon. It was nothing more, nothing less than that. But I think that's very important. And that's part of, you know, the time horizon is also part of the of the culture, because that's the culture of the company, the speed at which at which it works, and what you you tend to focus on, the KPIs you're focusing on. And that's by nature not the same. And that was that was to me something I clearly pay attention to, but I would say it's even before the deal.
Bill Canady: So a really insightful point is when you go through a transition from a privately held business, the culture changes dramatically. Speed changes, what we look at changes, how we treat those things changes. And you know, besides a very few people at the top, no one else in that business made that decision to go with it. And And they don't all want to make that journey. So keeping that team together, keeping those people together and showing them what's in it for them and why this is good, speed changes dramatically.
Christophe Piron: Speed speed changes. Yeah, exactly. That's the time horizon
Bill Canady: So hence the name of the thousand days. And it takes a while, you know, to get systems in, get the people stabilized, allow integrations to happen. That doesn't happen overnight. about 70% of the CEOs who come in for this, they don't make it. And And so it's this ability to build a team, understand what your partners and the board and your LPs want and keep that team together.
Christophe Piron: yes.
Bill Canady: How have you, how have you made that work through your career? I mean, you've had an extraordinary amount of success.
Christophe Piron: Well, as I said, when you are in a situation where the entire team is already structured around that time horizon, you know, for the moment I have the shortest possible time time horizon. it's simply adapting to that, and I think the style, the level of decisions, the The dynamics you simply need
Bill Canady: Mm-hmm.
Christophe Piron: to adapt. You know, you're working for a a a privately owned but really private, private, a family or so owned company, about the next crisis. It won't change. What's important to them is most of the time, will my son, my grandson, and so on be able to live on the on the dividends, as you said. So There is a crisis, they don't care, they will still do the investment, right? Because that's important to
Bill Canady: Long long as they're not going to injure their family materially, they're they're
Christophe Piron: No, that's the key. That's the key.
Bill Canady: they'll they'll go with it. it is critical. On the opposite side of that, it also allows complacency to come in, it allows it to be a little more comfortable, you don't run
Christophe Piron: Absolutely.
Bill Canady: it as lean. And that's why private equity loves buying those companies because there's a lot of fat in there that you can trim out that the business will be leaner, it'll grow faster. It'll push into areas that normally it wouldn't do.
Christophe Piron: it's actually easier to be a CEO coming from outside the company when the the P has just both. Why? Because He will be the the the person giving the tempo, you know, the new tempo. And you can adapt. I mean, if your employer is a PE, okay, you will go. You have this seven years or five years horizon. You go full speed. There's no discussion. I mean, you know that anyway you're fully supported by the PE investor, and that's his expectations. And you simply I think as a CEO, your professional manager, you simply have to adapt to your employer. Your employer is the shoulder, right?
Bill Canady: Absolutely. That's a it's simple. Your
Christophe Piron: So
Bill Canady: boss is one company, one one person, whoever you're reporting to there.
Christophe Piron: Exactly. you just focus on that and you know the levers and you execute the levers. It's as simple as that. And and and it's
Bill Canady: Absolutely. Yeah.
Christophe Piron: even more true on the on the stock market.
Bill Canady: So when you're going through this and you're building these companies up and you've bought a lot and put them together, what's the earliest signs of your buy and build strategy and your platform? It's really becoming a collection of companies versus a a truly integrated system. How how do you how do you notice that? What do you do about it, if anything?
Christophe Piron: I can talk about a couple of them. The first one, I became CEO and there was already two, three companies within it. With clearly, I mean they were clearly working separately to a point
Bill Canady: Mm-hmm.
Christophe Piron: that they were competing each other.
Bill Canady: Mm-hmm.
Christophe Piron: Right? I mean, one company was discounting to clients of the other while they were in the same group? Literally, yeah. I mean
Bill Canady: I see that. That's so true.
Christophe Piron: it was it was just unbelievable. You just looked at a list of clients and then you see, why did why did you come here? I guess because our sister company is making good money with them. Do you realize that you're actually jeopardizing their own business? And and cannibalizing that business and and at what cost? It's lower margins. We are just killing the killing on food. So you stop, you stop by that. You stop. Okay, fine. Suddenly the margins come up. You haven't done anything but just prevent them from working together. Then it's organization, it's one clear leadership, you know. cross-border, cross-entities. Once this is done, you can make the decision about the system. To me. organization good governance within the group management governance so that you have full alignment and then you can deliver I would say roll out the system the processes and so on and it's just faster to to put in to set up to put in place
Bill Canady: Interesting. You're talking about companies competing against others. They don't always have to be it can be just different divisions and as the parent organization, it's all the same ledger. Right. And so we wanna win and we wanna win successfully. When you buy competitors in the same field, they're used to trying to kill each other and now they're they're brothers or families in arms about doing it.
Christophe Piron: you gave the example of competitors. That that's can you imagine? They've been trained for years to beat the others. Why would they stop?
Bill Canady: Yeah, absolutely.
Christophe Piron: Why would they stop? It it's in the DNA. So it's a hell of a lot of work. You have to start by the organization, by one boss, one staff, so that they're all looking at the same sun, you know.
Bill Canady: When you were at Ecostal, you pursued a kind of a seven to eightfold growth ambition and you did pretty quickly three acquisitions. Did you experience any of these issues there?
Christophe Piron: it was quite interesting because we had to raise a lot of money in in parallel. Yeah, a lot again, relative to the size of the company, everything is relative. it was fast, it was reasonably fast. because we were it was really a buy and build, but on non-competing entities, and
Bill Canady: Mm-hmm.
Christophe Piron: since all Entities of the group saw the interest of becoming bigger for purchase. I mean, we entered into an overcapacity business, right? I mean, the solar panels is it's over capacity worldwide, so you see the the prices going down very quickly. So the purchasing capacity, the purchasing power of the group was super attractive for everyone. So that was extremely easy to put all those guys together. I mean, there were sizable businesses, but they all said, you know, we are not sizable enough to to survive to to this worldwide overcapacity, so we need to to grow, grow fast. In in eighteen months the prices were divided by three. So you'd better sell fast.
Bill Canady: Yeah, butter sell fast, if you
Christophe Piron: so
Bill Canady: if you only had a thousand days today to go build a company for a premium X, what would you standardize that first hundred days? What are you gonna focus on to make this the best outcome possible?
Christophe Piron: I think I had that discussion no later than today with with someone who has become CEO and asked my my opinion. I said, first take your 100 days to to get you know a grip on the on the figures. And then when you're building your strategy, you know, when there is a tsunami, you have two things to do. Either you take your surfboard and you surf the tsunami. you're playing the big boy and you try to hit it in front. And you know what? Hitting it in front, it never works, right? You die. So I I I
Bill Canady: That's a great analogy.
Christophe Piron: And I said, you know what? Look at the mega trends. Look at the mega trends within your business and adapt your business. And that's an example for Bihr. We grew it, you told it with double the size. We had plenty of failures. Obviously, when you run a business, there are things that work well and others that do not. But one stuff that worked well was rider gear. Ride of Gear was a two, three million business when I entered and a 40 million three years and a half afterwards. Why? Because the the the the mega trends were in Europe. electric driving, electric mobility, that was safety. You know, the EU who doesn't stop putting regulations in all sense in order to protect everyone from whatever they do. So that was obvious. You know, it's looking at a few megatrends, and then you select what you do and you focus on really being excellent on this and stop. what you're not good at or not brilliant at. So that you free up capital in order to be able to invest in businesses where you will take your surfboard, you know, because you know that whatever you do, you will always have a regulation that will come up and it that will help you. You know? can be an additional protection system that they want to to put in. I don't know. In some countries they're not they're obliged to to ride with gloves, with stuff, but it's not the case everywhere. It was not the case everywhere in Europe. And the only thing that happened is adding those regulations everywhere. And for us it was additional markets. And we were ready because we had the goods. Right? So I take that example, but it it's true for any business. Really think about okay, where will we be helped from really the long term perspective? Focus and be excellent on that. Stop what you're not excellent at, or where you you see it's gonna be it's gonna be tough because the market is going down declining like hell. You sell it, you free up capital and you invest where you're supposed to be good at and you invest to be better at what what goes in the right direction.
Bill Canady: I agree. So how do you decide what to stop doing? What customers, products, markets, initiatives? How do you prevent these things from just adding complexity instead of profitability?
Christophe Piron: first the trends. I mean, if the past the history, historical figures, if you see that it goes down like this, and in the end, you see the more difficult it is, the more time people will focus on that.
Bill Canady: Mm-hmm.
Christophe Piron: So basically, the more expensive it becomes as well. The management, if you have a division that doesn't go well, everyone is trying to sale to save to save that division. So the full attention is put on that.
Bill Canady: Mm-hmm.
Christophe Piron: In the end, the people are not working on something where we could easily grab money, where we can easily create value, you know.
Bill Canady: Mm-hmm.
Christophe Piron: and you see it. You see the trends, you see people are working, spending way too much time for something which is not value creative, and and increasingly more time. when I became CEO of one of the company, the first thing I did was putting one of the of the subsidiary bankrupt. And the previous CEO, told we're really, really struggling with that market, we are not succeeding, and my predecessor was already succeeding. And then, you know, if it's been two generations of CEO not able to fix the business, I don't see why I would be able. So the first thing I did was liquidate liquidate that company, and again, it it did it didn't bring a cent. But the management attention was refocused on what created value suddenly, and that helped to grow the rest of the business. And that was just fantastic. So for me, looking at backwards, see whether you know we put the right level of attention. And then, same stuff, looking at the potential, you know, of some businesses. By looking at a market. How to deliver a market the way we used to deliver it and just comparing it to competition and to see okay, how are they working? Does it work better? Does it does it work less well? What are our key differentiators? How can we make sure our differentiators are valuable for the client? Because the number of companies where I worked said, wow, that's our key differentiator. And I said, okay, what's the value for the client? Don't know. I said, so it's not a differentiator.
Bill Canady: It's not a differentiator. They just like it. They find it interesting. Customer may not.
Christophe Piron: But you you're different, that's true, but it has no value in that differentiation. So why do we do you do it? You know, and that's the type of things where I try to have a view because that's not easy. I mean, you also make mistakes and and that's normal.
Bill Canady: looking back, what is is there one integration decision that you've made that if you had to do it over again, you probably wouldn't do it?
Christophe Piron: stuff when I when I look back I thought my god why did I do that? We were actually
Bill Canady: What was I thinking?
Christophe Piron: competing with with with another another player, a great company as well, and we were both in buy-and-build mode. So it was really
Bill Canady: Mm-hmm.
Christophe Piron: most of the time, it was the first one on a target, right? It was really a race,
Bill Canady: Mm-hmm.
Christophe Piron: a rat race. And they got one of the company I really wanted to have. And we were on on it at the same time because we were it was it was an auction and at some point I said stop that's in my eyes that was too much, but still my ego was touched. And then I was too fast on the second on the next one. Because I absolutely wanted to have it, because the other and and I would say that's my key learning. you'd better not make a bad deal than miss a good one.
Bill Canady: Boy, there's words wisdom there. I the most money I've ever made is from the deals I didn't do because I would have lost
Christophe Piron: I didn't do.
Bill Canady: so much. And it's hard. I mean, so I try to keep myself somehow separated enough so I can not get emotionally involved. Because when I get emotionally involved, particularly if you're the person in charge, you you it's hard. and you can lose sight of what the goal is because we're competitive and we want to win. Okay, so you've accomplished all these great things. What's coming next for you, Christoph? What where where are you taking all this?
Christophe Piron: It's good question. I like what I'm doing for the moment because the first time honestly that I'm working at executive level on a listed company. So I mean there is learning everywhere. So what I would like to really do is you know lead another another group, another group wherever it is, by the way, I'm quite mobile. and it's make sure that we can grow it again, but I would say on a more on a less shaky way, I had mistakes as well. Quite a lot, by the way. And by the way, I think that only the people who do nothing do not make mistakes. Just growing growing a business, turning one around. I'm looking for companies for myself as well, you know, smaller size, and then I'm hesitating, shall I do it or not? Might be too small, you know, because I also think that I run a company from a hundred million to half a billion of a billion. That's the size where where I used to to work. I'm wondering. Person, you know, to work for smaller, smaller groups. It's not the same business because you hardly have management. You really have to do the stuff by yourself. And I'm attracted by that. But I'm not sure it's the same skill, so I'm still careful. So for the moment, I'm I'm discovering the the listed company executive mode. That's very interesting, and then we will see what I can bring to the to the market.
Bill Canady: Well, you sound you got lot of exciting times ahead of you. But I have no doubt someone with your background and experience and acumen is gonna do great at anything you touch. So this is it's wonderful having you today on the show. I can't thank you enough for Taking some time out and sharing your wisdom and your wins and losses.
Christophe Piron: Thank you, Bim. Bye.
Bill Canady: you bet. Bye-bye now.
Christophe Piron: I'm very well. Yourself, Bill.
Bill Canady: Well, listen, it's fantastic for you to be here. You have sat in so many different roles. you've been the CEO, CFO, you've led integrations, you've done it around the world. You know, talk to us a little bit about what that looks and feels like and the challenges that you've had to deal with.
Christophe Piron: It's true. Actually, I've worked from origination to execution integration on 23 deals for a total of 2.3 billion. And I can tell you there is no deal which are equivalent to the other. And strangely enough, I think that the smallest one were the more the most difficult in integration terms.
Bill Canady: I find that same thing. The smaller is harder. You got to
Christophe Piron: Of course.
Bill Canady: do your piece and their piece.
Christophe Piron: and their piece and when you the acquisition is done you don't have the size the management size to integrate on the acquisition part so actually now when I see businesses willing to acquire small companies I tend to be reluctant and and tell them, you know what, you're probably underestimating the fact that there is no middle management enough in small companies in order to to lead the the integration, and that makes it bloody complex. And that actually was true. The biggest one, okay, fine. The ticket was much more much bigger, but in the end, much easier to put in the company.
Bill Canady: That is so true. You know, it's funny. I I'll go do a small deal. We like buying products and things. You you know about that. And and so the person you're gonna buy it from, we'll just say the guy. So you meet his attorney, it's his divorce attorney. You meet his accountant, it's the guy that does his taxes. So no one has any deal experience. And you wind up finding that you have to close their books for them in many cases. You have to show them the deal piece, and then some of their advisors want to prove their worth and they actually can kill deals, right? Instead of getting
Christophe Piron: Absolutely.
Bill Canady: through it and and and being kind of good partners, it's hard. How do you handle it?
Christophe Piron: Well, I actually you made a very good point. I mean, many times the advisors are a pain, an additional hurdle to the success, and getting personal relationship with the buyer or the seller is absolutely essential. First, to really understand what drives them, what drives the sale, what drives the acquisition, what drives the reason. And once you Understand them, I mean the negotiation becomes much easier because sometimes you know the advisor are are focusing on on stuff which are absolutely not important to the to the principles. And they are they are making it's just a additional Urdos and a number of times where I said, if we want this deal to continue, you know what, you and I. We will go outside together. We will have a good a good dinner. We will have an afternoon together, and we will try to understand what blocks. And it takes no more than two hours, most of the time, to unlock the deal. And then you have a handshake, and then we go back to our advisors to tell them, okay, this is what we want, and that's it. And it works perfectly.
Bill Canady: It's so well said. You know, the the issue, it's just factual, is a lack of trust. You don't know them, they don't know you. They feel like you may be taking advantage of them. But you know, the honest piece is this may be the one deal they do in their whole career. And we can't afford to have our reputation sullied by doing anything than then right down the middle of the road. But they don't know that about us. And so taking that time to get to know them, taking that time, they can see inviting them in, helping them talk to other people we've done deals with can really make a big difference in that.
Christophe Piron: So that that's to me it's essential. And and also, you know, sometimes you see people blocking on on certain aspects of the deal, which you simply don't get. And then by just discussing, by just understanding their their needs, sometimes you propose something a bit different which is absolutely neutral to you. I mean it's no better, no worse than the other proposition, and it's done. And that's really and that also creates the the trust to continue to work together afterwards. And to me that's that's absolutely essential.
Bill Canady: I really agree with that. you need the owners and the key to leadership. You like to for them to stay forever. It's not always the case. When do you find that as an acquirer, it's important to start imposing one system? You know, you get them integrated into your platform, one culture, one operating cadence, right? When, when should you do it and when should you lose leave the business alone?
Christophe Piron: When the companies I I worked for were really willing to acquire a business which is totally equivalent, you know, same thing somewhere else or same thing, same place, then it makes sense because suddenly, you know, you will see your working capital more clearly, so your inventories, all your stuffs, and it's become much easier to manage and to drive synergies. That's number one. when did I leave it alone? When you know it's a diversification type of business. Let them run, let them go, let them develop, give them the means to grow, but don't force you know a system which is not probably applicable to the to the way they work. And try to understand them, try to get to get the best out of it, but let them grow. I'd like to talk about a failure I had. It's a company we acquired in in Germany, sizable. I mean sizable, everything's relative, but still 40 40 million business. Okay. X outstanding contact with the CEO, outstanding. And very, very, very nice guy. And we worked together for a year, and he was actually blocking the integration while it had to be so. And at some point after a year, we go for dinner together and said, You know, Christophe, I'm tired, I'd like to leave. it doesn't work. I said, I agree, it doesn't work. Our teams do not, you know, talk together, it doesn't work well. But Very nice conversation, nothing. I mean, we got along well as human beings. So we agreed he would leave. And then I asked him, but what happened? You were so motivated during the deal. And he told me, you know, Christophe, when I was CEO of that company, I didn't have cash. And I didn't realize that. At the moment I would sell, I had this type of amount of money on my bank account, and now my life is changed. And frankly speaking, waking up in the morning to do what I used to do in the past doesn't make any sense and I cannot motivate myself. And I thought that that was very honest from him. And that's something I'm checking all the time now when we're acquiring a company. Is does it change the life of the person? And is this person ready to continue under those new circumstances? And and that person in particular, he said, you know, I simply want to sail now. I want to go on an island, sail, and I will be happy. And that's respectable. I mean, the guy has worked a lot, he does the stuff, and he go and he apologized himself. He said, I truly apologize. I didn't expect to feel that way. And I think he was really sincere. But that's to me that was an eye-opener to okay, pay attention to what's next for that person, what does he plan to do with the cash he got? How how will he react? How do we prepare succession? Because that may come in any case. So but that's to us was a failure because we we struggled afterwards to find the number two and to ensure the succession of that of that business.
Bill Canady: You know, that is so insightful. And every founder led comp or every private company, I should say, that I have bought, the culture before was they were frugal and so they led a certain life, even though they had this massive asset, everything was tied up in it. And so their life was pretty normal. Now all of a sudden they're made wealthy, wealthy beyond their wildest dreams. It was a small company, it was very, very profitable, and we paid 112 million dollars for the business. So how do you plan for that? What do you do? What do you look for?
Christophe Piron: first now I try to avoid that situation and and make sure that there is a very strong number two.
Bill Canady: That's the key.
Christophe Piron: so that's because you cannot control it. You know, some people are just workaholics and they will continue anyway, but not everyone is like that. And and
Bill Canady: Not everyone's there. And sometimes the workaholics, you don't mind if they kind of retire anyway. You you need to get the company into your culture.
Christophe Piron: That that that's that's true because you you you tend to have a problem to take the control on those companies. The point is make sure you have a strong number two, or make sure within the company already, or make sure that it wouldn't be too difficult to find someone who can lead that business quickly. and pass the baton, you know, in in a very friendly way with the with the existing owner. To me that's essential. But if I have a little doubt about this, the possibility to have a number two inside or outside the company, then I don't do the deal.
Bill Canady: Mm-hmm. in most private equity businesses, we like buying priv founder-led companies. There's a lot we can do with them in professionalizing them and putting them into our system. But I count today on a hundred percent of the people leaving. and I look very carefully at that number two. What is the capability? So we'll spend time. With the founder for all the obvious reasons, but we'll spend an unusually amount of time with whoever we think their successor is, getting them a good contract where they feel comfortable, getting them into our culture. What do you do about the other pieces of it though? what do you do about like the systems and and the back office stuff? Because Most of the deals we do, we depend on the synergies, in other words, the cost out or the go faster pieces.
Christophe Piron: Mm-hmm.
Bill Canady: How do you push that in?
Christophe Piron: First, the first thing I try to do is making sure the companies we acquire, the the actually the sellers are reinvesting in our business. So one level above. Why do I prefer that over earnout? It's simply because they will be the first actors for synergies, you know.
Bill Canady: Mm-hmm.
Christophe Piron: I really tend to bring them up front. Otherwise, it will always be a discussion. yes, but if you implement this, it will it will be a burden for us, it will we will have additional costs. So I don't want that because my earnote won't be good, because this and that. So the first thing is bring them a level higher a level higher in the in the org so that we have them fully aligned with the the value creation for the group and not for themselves. So that's number one. And we tend to do that, with the the key people. So not only the the CEO and the seller. But the key people, so everyone within the acquired organization, so that they're not thinking about their own piece, but they're thinking about the group. If you have that, it becomes much more easy to have the people. Thinking about okay, what really makes sense, you know. And if they find that putting an air an ERP, putting the stock, the inventory together, sharing the client's list, you know, doing normal integration type of things, everything becomes easier. Because you're just aligning the incentives of everyone
Bill Canady: Mm-hmm.
Christophe Piron: who is in the organization to the inter to the organization's interests. And to me, that's really something I push. And if we do that, you know, we think together. I'm not the type of person who thinks, okay, we need to take the holding or the group's ERP system at all costs because we we have already done that. I prefer having you know people thinking all over the the place about what truly makes sense for the group. And if there is a better tool at the acquired company, let's use that. if it's better somewhere else, let's you let's use it. But so that they are all thinking not about protecting their own kingdom, but really thinking about the interest of the new group.
Bill Canady: Earnout is another language for saying you're gonna get sued, right? Because
Christophe Piron: Yes.
Bill Canady: you you you put it in and then if you wanna integrate the businesses, which we typically have to if we're gonna be successful, they're gonna yeah, it's not gonna go as well. They're gonna injure their earn out because the resources are are diverted. Is there one place you tend to focus more than other are there there's certain levers you pull that you feel you can count on to produce results?
Christophe Piron: depends on the type of business. But in general, I will start with finance to make sure that I have the good dashboard and the facts and figures to be able to manage the company, not on
Bill Canady: Mm-hmm.
Christophe Piron: feelings, but on on hard facts. So I would
Bill Canady: Mm-hmm.
Christophe Piron: certainly start by that by that. And depending on the type of of businesses, but I would say I've done 80% of my career in in wholesale. So there operations, inventories, you know, all those stuff where it's it's thin margins. So being extremely efficient there truly make the difference. And and often in working capital, there's a hell of a lot of money to to bring back quick to the shareholders. That that's most often where if you're really fast. in in in slimming the working capital, I know you're a big fan of the of the eighty twenty, but but that that's really it it's making sure that you you spend your time on the most important clients that you stop with slow slow turning assets this type of things and there is a hell of a lot of money to to be brought back to the to the shareholders and super quickly in the end it's a matter of a few months so that's where I
Bill Canady: I agree. The two things that flow through the quickest is pricing. you can look at your pricing and get it correct, you can drive growth and and profitability. And the second one is you've got stacks of cash sitting on those shelves and all those warehouses no one's looking at. How do you get those out? How do you monetize though? Because not only do you get the money for it, you also don't have to continue to carry the cost of maybe you don't need that warehouse anymore. some of this inventory ages out, either becomes unusable or the market just moves on to it.
Christophe Piron: That's a good thing.
Bill Canady: Is there something else that you really pay a lot of attention to that that you find is is pretty important?
Christophe Piron: Obviously culture, I tend to you know test it before the deal because there I mean changing culture is something extremely complex.
Bill Canady: Yeah.
Christophe Piron: when we work together, by the way, that's a good that that was one of the tricks, and that was one also one of the reasons why I left, by the way.
Bill Canady: working for me was miserable. That's why most
Christophe Piron: We used to work for a family business where
Bill Canady: Yeah.
Christophe Piron: the time horizon is extremely long. So I was leading that company, leading Bihr, for four or five years, I think, with time horizons, which are obviously much longer than what Arrowhead had, because owned by a private equity owner. And the choices to be made were naturally totally different. And the reason why I left, not because I disagreed with Duch those choices, but I found it extremely difficult to explain to a team where you told them this is where the north is. And obviously the north is not at the same place when you have a shorter time horizon, right? I simply thought, well, you know what? I might not be the right guy to to to lead. We with such a a quick change of time horizon. It was nothing more, nothing less than that. But I think that's very important. And that's part of, you know, the time horizon is also part of the of the culture, because that's the culture of the company, the speed at which at which it works, and what you you tend to focus on, the KPIs you're focusing on. And that's by nature not the same. And that was that was to me something I clearly pay attention to, but I would say it's even before the deal.
Bill Canady: So a really insightful point is when you go through a transition from a privately held business, the culture changes dramatically. Speed changes, what we look at changes, how we treat those things changes. And you know, besides a very few people at the top, no one else in that business made that decision to go with it. And And they don't all want to make that journey. So keeping that team together, keeping those people together and showing them what's in it for them and why this is good, speed changes dramatically.
Christophe Piron: Speed speed changes. Yeah, exactly. That's the time horizon
Bill Canady: So hence the name of the thousand days. And it takes a while, you know, to get systems in, get the people stabilized, allow integrations to happen. That doesn't happen overnight. about 70% of the CEOs who come in for this, they don't make it. And And so it's this ability to build a team, understand what your partners and the board and your LPs want and keep that team together.
Christophe Piron: yes.
Bill Canady: How have you, how have you made that work through your career? I mean, you've had an extraordinary amount of success.
Christophe Piron: Well, as I said, when you are in a situation where the entire team is already structured around that time horizon, you know, for the moment I have the shortest possible time time horizon. it's simply adapting to that, and I think the style, the level of decisions, the The dynamics you simply need
Bill Canady: Mm-hmm.
Christophe Piron: to adapt. You know, you're working for a a a privately owned but really private, private, a family or so owned company, about the next crisis. It won't change. What's important to them is most of the time, will my son, my grandson, and so on be able to live on the on the dividends, as you said. So There is a crisis, they don't care, they will still do the investment, right? Because that's important to
Bill Canady: Long long as they're not going to injure their family materially, they're they're
Christophe Piron: No, that's the key. That's the key.
Bill Canady: they'll they'll go with it. it is critical. On the opposite side of that, it also allows complacency to come in, it allows it to be a little more comfortable, you don't run
Christophe Piron: Absolutely.
Bill Canady: it as lean. And that's why private equity loves buying those companies because there's a lot of fat in there that you can trim out that the business will be leaner, it'll grow faster. It'll push into areas that normally it wouldn't do.
Christophe Piron: it's actually easier to be a CEO coming from outside the company when the the P has just both. Why? Because He will be the the the person giving the tempo, you know, the new tempo. And you can adapt. I mean, if your employer is a PE, okay, you will go. You have this seven years or five years horizon. You go full speed. There's no discussion. I mean, you know that anyway you're fully supported by the PE investor, and that's his expectations. And you simply I think as a CEO, your professional manager, you simply have to adapt to your employer. Your employer is the shoulder, right?
Bill Canady: Absolutely. That's a it's simple. Your
Christophe Piron: So
Bill Canady: boss is one company, one one person, whoever you're reporting to there.
Christophe Piron: Exactly. you just focus on that and you know the levers and you execute the levers. It's as simple as that. And and and it's
Bill Canady: Absolutely. Yeah.
Christophe Piron: even more true on the on the stock market.
Bill Canady: So when you're going through this and you're building these companies up and you've bought a lot and put them together, what's the earliest signs of your buy and build strategy and your platform? It's really becoming a collection of companies versus a a truly integrated system. How how do you how do you notice that? What do you do about it, if anything?
Christophe Piron: I can talk about a couple of them. The first one, I became CEO and there was already two, three companies within it. With clearly, I mean they were clearly working separately to a point
Bill Canady: Mm-hmm.
Christophe Piron: that they were competing each other.
Bill Canady: Mm-hmm.
Christophe Piron: Right? I mean, one company was discounting to clients of the other while they were in the same group? Literally, yeah. I mean
Bill Canady: I see that. That's so true.
Christophe Piron: it was it was just unbelievable. You just looked at a list of clients and then you see, why did why did you come here? I guess because our sister company is making good money with them. Do you realize that you're actually jeopardizing their own business? And and cannibalizing that business and and at what cost? It's lower margins. We are just killing the killing on food. So you stop, you stop by that. You stop. Okay, fine. Suddenly the margins come up. You haven't done anything but just prevent them from working together. Then it's organization, it's one clear leadership, you know. cross-border, cross-entities. Once this is done, you can make the decision about the system. To me. organization good governance within the group management governance so that you have full alignment and then you can deliver I would say roll out the system the processes and so on and it's just faster to to put in to set up to put in place
Bill Canady: Interesting. You're talking about companies competing against others. They don't always have to be it can be just different divisions and as the parent organization, it's all the same ledger. Right. And so we wanna win and we wanna win successfully. When you buy competitors in the same field, they're used to trying to kill each other and now they're they're brothers or families in arms about doing it.
Christophe Piron: you gave the example of competitors. That that's can you imagine? They've been trained for years to beat the others. Why would they stop?
Bill Canady: Yeah, absolutely.
Christophe Piron: Why would they stop? It it's in the DNA. So it's a hell of a lot of work. You have to start by the organization, by one boss, one staff, so that they're all looking at the same sun, you know.
Bill Canady: When you were at Ecostal, you pursued a kind of a seven to eightfold growth ambition and you did pretty quickly three acquisitions. Did you experience any of these issues there?
Christophe Piron: it was quite interesting because we had to raise a lot of money in in parallel. Yeah, a lot again, relative to the size of the company, everything is relative. it was fast, it was reasonably fast. because we were it was really a buy and build, but on non-competing entities, and
Bill Canady: Mm-hmm.
Christophe Piron: since all Entities of the group saw the interest of becoming bigger for purchase. I mean, we entered into an overcapacity business, right? I mean, the solar panels is it's over capacity worldwide, so you see the the prices going down very quickly. So the purchasing capacity, the purchasing power of the group was super attractive for everyone. So that was extremely easy to put all those guys together. I mean, there were sizable businesses, but they all said, you know, we are not sizable enough to to survive to to this worldwide overcapacity, so we need to to grow, grow fast. In in eighteen months the prices were divided by three. So you'd better sell fast.
Bill Canady: Yeah, butter sell fast, if you
Christophe Piron: so
Bill Canady: if you only had a thousand days today to go build a company for a premium X, what would you standardize that first hundred days? What are you gonna focus on to make this the best outcome possible?
Christophe Piron: I think I had that discussion no later than today with with someone who has become CEO and asked my my opinion. I said, first take your 100 days to to get you know a grip on the on the figures. And then when you're building your strategy, you know, when there is a tsunami, you have two things to do. Either you take your surfboard and you surf the tsunami. you're playing the big boy and you try to hit it in front. And you know what? Hitting it in front, it never works, right? You die. So I I I
Bill Canady: That's a great analogy.
Christophe Piron: And I said, you know what? Look at the mega trends. Look at the mega trends within your business and adapt your business. And that's an example for Bihr. We grew it, you told it with double the size. We had plenty of failures. Obviously, when you run a business, there are things that work well and others that do not. But one stuff that worked well was rider gear. Ride of Gear was a two, three million business when I entered and a 40 million three years and a half afterwards. Why? Because the the the the mega trends were in Europe. electric driving, electric mobility, that was safety. You know, the EU who doesn't stop putting regulations in all sense in order to protect everyone from whatever they do. So that was obvious. You know, it's looking at a few megatrends, and then you select what you do and you focus on really being excellent on this and stop. what you're not good at or not brilliant at. So that you free up capital in order to be able to invest in businesses where you will take your surfboard, you know, because you know that whatever you do, you will always have a regulation that will come up and it that will help you. You know? can be an additional protection system that they want to to put in. I don't know. In some countries they're not they're obliged to to ride with gloves, with stuff, but it's not the case everywhere. It was not the case everywhere in Europe. And the only thing that happened is adding those regulations everywhere. And for us it was additional markets. And we were ready because we had the goods. Right? So I take that example, but it it's true for any business. Really think about okay, where will we be helped from really the long term perspective? Focus and be excellent on that. Stop what you're not excellent at, or where you you see it's gonna be it's gonna be tough because the market is going down declining like hell. You sell it, you free up capital and you invest where you're supposed to be good at and you invest to be better at what what goes in the right direction.
Bill Canady: I agree. So how do you decide what to stop doing? What customers, products, markets, initiatives? How do you prevent these things from just adding complexity instead of profitability?
Christophe Piron: first the trends. I mean, if the past the history, historical figures, if you see that it goes down like this, and in the end, you see the more difficult it is, the more time people will focus on that.
Bill Canady: Mm-hmm.
Christophe Piron: So basically, the more expensive it becomes as well. The management, if you have a division that doesn't go well, everyone is trying to sale to save to save that division. So the full attention is put on that.
Bill Canady: Mm-hmm.
Christophe Piron: In the end, the people are not working on something where we could easily grab money, where we can easily create value, you know.
Bill Canady: Mm-hmm.
Christophe Piron: and you see it. You see the trends, you see people are working, spending way too much time for something which is not value creative, and and increasingly more time. when I became CEO of one of the company, the first thing I did was putting one of the of the subsidiary bankrupt. And the previous CEO, told we're really, really struggling with that market, we are not succeeding, and my predecessor was already succeeding. And then, you know, if it's been two generations of CEO not able to fix the business, I don't see why I would be able. So the first thing I did was liquidate liquidate that company, and again, it it did it didn't bring a cent. But the management attention was refocused on what created value suddenly, and that helped to grow the rest of the business. And that was just fantastic. So for me, looking at backwards, see whether you know we put the right level of attention. And then, same stuff, looking at the potential, you know, of some businesses. By looking at a market. How to deliver a market the way we used to deliver it and just comparing it to competition and to see okay, how are they working? Does it work better? Does it does it work less well? What are our key differentiators? How can we make sure our differentiators are valuable for the client? Because the number of companies where I worked said, wow, that's our key differentiator. And I said, okay, what's the value for the client? Don't know. I said, so it's not a differentiator.
Bill Canady: It's not a differentiator. They just like it. They find it interesting. Customer may not.
Christophe Piron: But you you're different, that's true, but it has no value in that differentiation. So why do we do you do it? You know, and that's the type of things where I try to have a view because that's not easy. I mean, you also make mistakes and and that's normal.
Bill Canady: looking back, what is is there one integration decision that you've made that if you had to do it over again, you probably wouldn't do it?
Christophe Piron: stuff when I when I look back I thought my god why did I do that? We were actually
Bill Canady: What was I thinking?
Christophe Piron: competing with with with another another player, a great company as well, and we were both in buy-and-build mode. So it was really
Bill Canady: Mm-hmm.
Christophe Piron: most of the time, it was the first one on a target, right? It was really a race,
Bill Canady: Mm-hmm.
Christophe Piron: a rat race. And they got one of the company I really wanted to have. And we were on on it at the same time because we were it was it was an auction and at some point I said stop that's in my eyes that was too much, but still my ego was touched. And then I was too fast on the second on the next one. Because I absolutely wanted to have it, because the other and and I would say that's my key learning. you'd better not make a bad deal than miss a good one.
Bill Canady: Boy, there's words wisdom there. I the most money I've ever made is from the deals I didn't do because I would have lost
Christophe Piron: I didn't do.
Bill Canady: so much. And it's hard. I mean, so I try to keep myself somehow separated enough so I can not get emotionally involved. Because when I get emotionally involved, particularly if you're the person in charge, you you it's hard. and you can lose sight of what the goal is because we're competitive and we want to win. Okay, so you've accomplished all these great things. What's coming next for you, Christoph? What where where are you taking all this?
Christophe Piron: It's good question. I like what I'm doing for the moment because the first time honestly that I'm working at executive level on a listed company. So I mean there is learning everywhere. So what I would like to really do is you know lead another another group, another group wherever it is, by the way, I'm quite mobile. and it's make sure that we can grow it again, but I would say on a more on a less shaky way, I had mistakes as well. Quite a lot, by the way. And by the way, I think that only the people who do nothing do not make mistakes. Just growing growing a business, turning one around. I'm looking for companies for myself as well, you know, smaller size, and then I'm hesitating, shall I do it or not? Might be too small, you know, because I also think that I run a company from a hundred million to half a billion of a billion. That's the size where where I used to to work. I'm wondering. Person, you know, to work for smaller, smaller groups. It's not the same business because you hardly have management. You really have to do the stuff by yourself. And I'm attracted by that. But I'm not sure it's the same skill, so I'm still careful. So for the moment, I'm I'm discovering the the listed company executive mode. That's very interesting, and then we will see what I can bring to the to the market.
Bill Canady: Well, you sound you got lot of exciting times ahead of you. But I have no doubt someone with your background and experience and acumen is gonna do great at anything you touch. So this is it's wonderful having you today on the show. I can't thank you enough for Taking some time out and sharing your wisdom and your wins and losses.
Christophe Piron: Thank you, Bim. Bye.
Bill Canady: you bet. Bye-bye now.
