Pemba Business Services Dinner

I would like to extend my heartfelt thanks to Pemba Capital Partners for hosting the Business Services Dinner 2024 at the iconic Quay restaurant in Sydney. It was an honour to participate as a panellist alongside such accomplished leaders in the Australian business services ecosystem. The evening offered a unique opportunity to exchange ideas on critical topics, including when to consider an exit, the benefits of international growth, and the building blocks of a champion business.

Below, I’ve summarized some of the key points I shared during the evening’s thought-provoking Q&A session.

Insights from the Q&A Session

Pierre, in your experience in working with people-based businesses, what are some of the key criteria for success?

B2B services businesses are fundamentally people- and IP-based, so creating intangible and asset-light value is critical. At SCD, we have created a methodology to evaluate such businesses through the "4Ps":

• Purpose: Alignment across clients, stakeholders, and shareholders on the value proposition, strategy, and benefits.
• People: Building a business that doesn’t depend on individuals, even great ones.
• Process: Discipline around internal processes and intellectual property.
• Performance: Scalability through measurable and balanced metrics.

Ultimately, the human factor—culture, values, people—is at the heart of these dimensions and critical for M&A success.

Pierre, how important is international growth for Australian businesses?

International growth should be approached strategically. Achieve a critical mass in Australia first (ideally $100M+ in revenue) unless your market size is a limitation. For an exit, targeting specific geographies (for example ANZ) can optimize valuation through market premiums.

Often, deals involving global buyers generate better outcomes due to their geographical specific interests. So pragmatically, ensure your international operations align with the responsibilities of decision-makers at large buyers.

Pierre, you have decades of experience in finding international buyers like Capgemini and IBM for Australian businesses. What do these buyers typically look for?

Key attributes buyers seek include:

• Growth, Growth, Growth: Sustainable top-line growth, market share, and synergies. Demonstrate confidence by maintaining or initiating growth projects.
• People: Reasonable, adaptable, and collaborative individuals who can manage change effectively.
• Low Risk/High Trust: Be prepared but not overly perfect, as showing areas for improvement fosters collaboration and mitigates perceived risks. Strategic buyers want a clear “why” and “how” for the deal.

What advice would you give to a founder wanting to build a champion Australian services company?

Surround yourself with the right people—aligned shareholders, loyal staff, value-added advisers, and demanding clients. Be bold, think big, and stay disciplined. Invest in emotional intelligence (EQ) over IQ and prioritize attitude over aptitude. Most importantly, enjoy the journey!

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Thank you once again to Pemba Capital Partners for a fantastic evening of insights and connections.