With the UK-based diversified investment holding company MBH Corporation (MBHCF) publicizing its interest to acquire extremely capable small and medium-sized enterprises (SMEs) in the UAE, MBH CEO Mr. Callum Laing offered exclusive insights into how SMEs in the country could benefit from the move.
The MBCF Delegation led by Mr. Laing will be in Dubai and Abu Dhabi from the 7th of March to meet small business owners who are aiming to scale along with family offices and smaller funds who would like more exposure to this exciting and fast-growing asset class.
How can UAE companies be part of the MBH Group? What is the procedure/ steps involved?
MBH is looking for profitable, owner-operated businesses where the owner is looking to scale their business, not exit. We have an initial introductory call before introducing the company to some companies in the group so they can hear from existing business owners. We then begin the due diligence process, on both sides, and if all is good we move to legals and completion.
What is the total time taken from the discussion to the Onboarding Stage?
That very much depends on how ‘ready’ the company is in terms of getting all its due diligence materials together. Our quickest was 10 weeks from initial call to completion, but 3-6 months is pretty normal.
Does the SME lose control of its ownership by being part of MBH?
The owner keeps full operational control of their business, hiring, brand, culture, it all stays the same. However, they swap their private shares, for shares in MBH and therefore they are now a part-owners of a worldwide group of small companies. Combined the SME owners make up the majority shareholders of the PLC and so always have ultimate control. Each company comes in on a ‘perpetual earn in’ model, meaning the more profits they contribute to the holding company, the more stock they have the opportunity to own.
What are the advantages of being part of the MBH Group?
Companies join for a number of different reasons. Sometimes it is because they know they can win much bigger contracts if they are part of a bigger group. Other times, they are looking to reward, or incentivize their staff with actual stock options and sometimes they have just reached a stage where they want to grow through acquisition and it is easier to do that by leveraging off all the MBH resources.
What do you mean by the Agglomeration Model?
The Agglomeration model differs from most ‘roll ups’ in that we do not try and impose management ‘best practice’ on the companies in the group. We bring companies in that have proven success record and we leave them alone to get on with it. Because of that entrepreneur-friendly approach, we often get more than 1,000 applications a year from companies wishing to join and it has allowed us to grow to 28 companies in the group in a little over 3 years.
Are there any specific vertical industries that you are focusing on within the SME sector in the UAE?
We have 8 industry verticals in the group so far (Health, Education, Construction, Engineering, F&B, Property, Transport & Leisure), so those are obvious ones. However, if we find a good company that doesn’t fit into any of those categories we would be open to creating a new vertical just for them. We do have a strong ESG (Environmental, Social & Governance) focus, so would tend to avoid companies that don’t fit into that.