The Roll-Up Playbook: From Zero to $100M Revenue | Felix Jander Interview

0:00 My guest today is Felix Yander, co-founder of Arzipa, one of the Europe's most impressive recent buy and build success stories. founded back in 2021, so not so long ago. RZipa has completed 80 acquisitions, grown to more than 1,100 employees across 60 plus locations and scaled to over 100 million euros in annual revenue, becoming German's leading provider of occupational safety and occupational medicine services. It's great to have you with me today, Felix.

0:32 >> Yeah, thanks a lot for inviting me, Mick. >> It's July 2026, but back in 2024, the company partnered with Vartberg Pinkus, one of the world's largest private equity firms, and you rolled a significant portion of your equity and remain heavily involved in the business, meaning the Archipa story is far from over. Let's start from from the early days. Where did it all started? And very importantly, I would I would like you to bring out if you if you can share how did you finance all of this in the early days and where were you financially when you when you starting Aripa? That is the question I I get so often. So please share as much as you can.

1:14 >> Sure. I can tell you more about that. just just to make to make the facts correct, we we did like approximately a little bit over 40 acquisitions to date. Yeah. So 80 is a bit too many. I wish I wish I were 80. No, but 40 is a lot as well. and and yeah, no, back in 2020, I was I was pretty much just coming out of a startup that I joined previously. So, first I was at BCG, right, for a few years after studying business and and then it was at Contrao as it was named back in the days. It was a B2B travel startup where I started building up the sales team, the marketing team. It's nowadays named Navan and it's actually IPOed last year so quite recently. so and and and but for me Corona was kind of a turning point because COVID hit and and then business travel was kind of dead right.

2:02 So that was pretty sure no one was traveling and and so the company was also in difficult times and yeah so we had like a restructuring going on. So out of the 50 employees that I previously hired for my sales team, we had to get rid of more of most of them like I would say like of 40 45 people. So down to five to 10 people. And back in those days I figured look this this is going to be in tough times for for a few months the the the startup. And so I started looking into new business and together with a friend of mine Alex back then who I met at university in Zangan we started looking at different topics but we actually started with venture then search fund and then got into rollup. Yeah, we were not we were not wealthy at all, right? So, it was all self- financed this ideation period and we're living off our savings.

2:52 Yeah. That we had made up to date. >> Okay. And self- financed for for a year >> more or less. Yeah. >> Yeah. Okay. And also when doing a research I found you were using those unemployment benefits which you Yeah. Yeah, I mean I figured look in in Germany it's actually part of the federal unemployment program is that you can apply for such a thing that is like a a founders's aid so to say. Yeah, let's call it founders aid and you can apply for it which we did and then it's it's kind of the same money that you get but it's for a different reason so to say and that's what we did but it's basically unemployment benefits for founders.

3:33 >> Mhm. And let's get into this. How was the you mentioned okay you were looking at VC firms, tech startups, then search funds and then eventually rollups. So what was the process and the the thesis there? >> I mean Alex and I we were coming out of this venture bubble right so contra was VC financed I think by project a crandom some other some other larger larger funds I don't reckon and so so that was kind of where we where we came from. So obviously we started ideating also around that. But some at some point we figured like dude we actually are not so much into this like hyperrowth and product finding product market fit and also this kind of hiccup growth so to say. Yeah you hire a lot then then you size down again because of the burn rate and then you go again with the next funding round and so on. So we wanted to do something more profound something even more boring so to say. So we didn't go after something fancy right and that's how we got more involved with German middleand so SMB businesses and and especially search funds and back in the days I was talking a lot to Tubia Reeber who also was one of the first search funders in in Germany and and yeah then together we started looking more into smaller segments because we even figured with these two or three million EBTA companies there's there's it's a crowded space as well you have like small cap private equity funds family offices and the likes going into it and that's how we went into smaller segments and then started developing around okay let's consolidate something yeah and and build up a group of companies.

5:08 >> What are your thoughts of okay acquiring companies reaching out to people? Let's talk more about the the human side and what were you actually doing when it comes to sourcing writing those letters and overall the the sourcing phase of of you building this rollup. So when we first started we had like we had like a list of 60 niche segments like boring niche industries in German. So we had things from orthopedics to logopedics but yeah also to occupational medicine. So we were looking into different small niche segments and so the first let's say two weeks or three weeks was more like broader outreach. So we did some cold calls. Yeah. and and after narrowing down this long list of 60 segments to let's say three four five segments that we found specifically interesting then we got deeper into it and then we started outreaching specifically to associations in the in the in the market so so like you know there's like these SMB associations where we started reaching out to the presidents of these associations then we also started just cold calling owners of businesses so we get some some kind of feeling for financials how they think about valuations and we also started just meeting some of them and and we were pretty much honest. Yeah. So our pitch was look we're two guys from Berlin.

6:25 We're entrepreneurs. We want to start something in your industry. We we still not completely sure about how it's going to look like but we might build up a group of companies. Are you interested in talking for half an hour and that got us like 10 meetings. Yeah. And and that's how we got a feeling for how many companies are they in the market? How are their financials and margins? how willing are they to sell at what price and so on so forth. So that was like the the weeks 3 to 10, let's say. Yeah.

6:52 >> And when it comes to the actual outreach, did you did you just sat down and set like a specific goals? because myself like a lifelong salesperson and when I was just doing an podcast episode with Ramsey the co-founder of Evergreen and they've done so far 160 acquisitions and they said that when they first got started he reached out to those individuals who have who has been doing outsourcing for for a living and they really got the process down to the number how many calls they have to do and then it's very easy you just wake up in the morning >> you you you you have your breakfast and you just go to the office and you just start calling and meeting with those businesses. Did you have any sort of data you were going after or you were just >> Actually, we did. Yeah, actually we did.

7:40 So, so after like I mean what I now mentioned is like the first let's say 12 weeks. Yeah. Or 10 weeks where we started with ideation and deciding for market after that we had pretty much settled on let's look deeper into occupational safety and medicine. And that was also the the phase where we kind of we set a goal. Yeah. Where we sat down and said, "Look, if we want to be successful in this and especially at fundraising, we need two to four deals."

8:05 Yeah. In in like 12 months in time. And so we sat down and calculated a conversion of of 1% I think and calculated like how many letters and how many contacts do we need to make in order to achieve this number of deals in in in 12 to 18 months. And that's actually how we did it. Yeah. So so we sent out u like the first few batches were like three to 400 letters. So meaning 1% conversion is like three to four deals. Yeah. And and that's also what we did. Yeah. So we put a lot a lot of work into these letters because you only have kind of one chance of contacting them first, right? So together with working students and interns, we let them research like literally anything about the company. So we crawled their website, we tried to find newspaper articles and so on that when we wrote the letter, it was very specific. look, you opened two two new loca locations this year. That's very impressive. Or it's very interesting. You have five employees in occupational medicine and you grew your part of employees in occupational safety. That might be a good fit to us.

9:07 Yeah. So, so, so very specific to the information why this specific company was relevant and and I think that in the end also made it so successful. Yeah. So after repeated outreach we over the years this is now a bit blurred number we had up to 80% reply rate depending a bit on the cohort which is which is super rarely seen right I mean myself I come from sales right and there a good reply rate in cold outreach was like 20% 30% max yeah you know it so so 80% was unseen but it's also proof of how diligently we were writing to these entrepreneurs and how diligently we were also following following up on it. Yeah.

9:48 So every time we were in in let's say Kour, we called up this one guy who was in Kazw and told him, "Look, we're there. Do you have spontaneously time for some coffee? Can we meet?" Yeah. So that's also part of the work which goes into that reply rate obviously. Yeah. but to your actual question, yes, we did. We sat down and we set us a target like two to four days within 12 months and that's how we calculated backwards how many letters and outreaches we want to do.

10:14 >> 80%. That's that's remarkable. But that's only after three years, right? It's not in year one. So it adds up over time. Yeah. Then you write in Christmas cards and so on and then every time you write, you get another response. Obviously, >> you should just not be too annoying. >> >> I don't know how you did it in sales. >> No, sometimes you are annoying, but I think if you put in the effort, people appreciate that. The answer will be no, but they will appreciate that.

10:37 >> Yeah. And and I think also if if you notice that people are kind of at that point where you get on their nerves, Yeah. You should also let them alone. Yeah. Not not push further once they told you, look, it's not the right time. Yeah. Then give them half a year and then ask again if if there's a good reason for asking again. But that's also something I think we sometimes we did better, sometimes we did lesser at.

11:00 Yeah. But most of the time we we kind of responded to that. Yeah. >> Mhm. >> And let them alone for for some time. And during the same time, did you do the same type of outreach to investors as well or how did you put it all together eventually? >> Yeah. good point. Yeah. I mean, no of our process with investors was more like bilateral relationship based, right? So we first first when we started when we started we didn't have a clear idea of how we want to structure this.

11:30 Yeah. We ended up structuring it like a search fund. So, so you maybe know from search funds there is this 30 to 35% for the founders and and then the rest for investors. You do like one-time financing of equity. so we had something like this in mind. So first we started like just talking to some people out of our extended contacts and network basis and and we started looping them in into like regular discussions like every months or so we spoke to them and told them look we find rollup interesting or we find this specific market interesting or look we talk to these three companies and they have pretty impressive margins da da da. Yeah. So we had like a circle of 10 then 20 then 30 people that we that we entertained on a regular basis. Yeah.

12:15 We did like monthly investor updates, how we called it. And then at some point we we kind of nailed down some terms. So we did a term sheet and we presented to the spaces. I think it was like six months in in February or March. This is how we want to do it. Are you fine with it? And then we had one or two lead investors who we renegotiated some little things with them. But in the end we ended up at exactly what I mentioned earlier like a search fund like structure. So there was a timebased vesting portion and there was a performance-based vesting portion and the performance-based vesting portion was based on money multiple that we would give to investors at exit or that the investment would provide to investors at exit.

12:57 And personally, how was this period for you? At the moment, you're this calm, relaxed. It's it's a beautiful summer. You've seen a great amount of success, but during this time of doing it all, how did you feel? And because I think these type of people who have been going through this period, I wouldn't say they're like different animals, but they're they have this level of grit, persistence, not giving up. They're they're tough tough people in a in a in a best way possible. So, how was it for you this period? Did you ever have like tougher days or or is there anything you'd like to bring out? What what helped you to you to keep going?

13:32 >> So, actually, I mean, if you want to have a frank response, it was kind of I think the best time of my life. Yeah. I was never again. So, it's it's you know, it's very you're building every day something. It's very creative as well when you're iterating, you're sparring with smart people. So, you don't have the burden of leadership, right, of of developing people, which sometimes also is tough and needs a lot of effort. You're just surrounded by by like-minded smart people. You can iterate every day and you move very fast. Yeah. So I I found that back in the days I found that super cool. Yeah. So like the first six to 12 months I tell everyone were were the best so to say. Yeah. Also the times afterwards were were super cool. Yeah.

14:12 But like this fastm moving pace really intrigued. Yeah. And look by nature I'm actually I wouldn't say I'm such a brave person. I actually I'm pretty cautious and I wouldn't say hesitant but but cautious I think is better to say because I could have also started something similar just right after BCG right but I did not feel ready I first wanted to get some more entrepreneurial experience and so on and you know I I wouldn't even say that I was like the classical startup founder that did like this bootstrapping I don't know living living offund a day or I had some savings I I knew I was fine you know so and Still obviously it was also tough period. I mean when we tried to save every scent we could so so we could run longer for for looking for businesses and markets. And I remember very well when when Alex and I I mean we slept together in Ebis hotels. Yeah. For for €60 a night. So we were very costconscious.

15:08 and and yeah, but it was cool. Yeah. I liked it. Though the sleep was not the best, but yeah. >> You mentioned the the VC background. What's interesting the other day a week ago I had a podcast with a gentleman Eric he built a startup but during COVID they had to let go 80 people and eventually closed down the business and then he started read reading about consolation software and eventually he found an investor and partner and now they bought over over 10 businesses and building this diversified holding company in Malaysia. So it's interesting to see in the future the guys from the VC world how many of them might want to or are willing to try the let's call it more stable route of buying a business with a with a positive cash flow.

15:54 >> Yeah I see that trend totally. Yeah like in Berlin you have let's name some funds you haveandom you have cherry ventures you have project a general catalyst and the likes who all move into that space and also have done some investments in rollups already. I feel I mean they they have the difficulty of of telling their LPs I mean for their LPS they're still in the asset class of venture capital right which is in mindset of I produce one outlier and and and nine write offs yeah and but the outlier has to has to return more than 10x and and putting that return expectation on roll up I think is unhealthy because in the end you're going to you're going to try to reach that expectation even if it's not 10x.

16:40 Yeah. But a roll up hardly is a 8 n 10x case. So if you want to have that possibility of achieving it then you need to take more risks in the beginning which means you you do something with software you have a burn rate you you hire up front a lot of people whom whom you are then hoping to generate some some some margin value creation or some some growth value creation or so. But you know it's a significant risk that they're taking there and I think it's they're making it a bet so to say and I think that's what they're doing is they're taking the beauty out of this rollup concept which is the stability which is buying stable cash flows which which is which also is leverage by the way that you can leverage it quite well and they put on a lot more equity and a lot more risk and I don't think that's that's healthy for the m for the for the concept. Yeah. And so what we try to do with a is that we try to stay out of those markets. So we try to stay out of those markets that are prone to be VC financed. It it also tend to be the larger ones. So real estate brokers or or tax advisor in Germany very hot topics. Yeah. Where VCs move into very large markets super many targets. You can enter at low multiples but then we say okay look maybe that's not our market. We rather focus on something more nichy where we don't have that risk. Yeah. Because it kills your entry multiples when you have too much money in the market.

18:00 >> I want to spend a bit of bit of more time on the on the on the very early days of now you getting the meetings because it's a like 100% proprietary deal flow you didn't do it through a broker or investment banker how were the first meetings and conver conversations with the owner operators and maybe most importantly the the valuation part of of you going there I want to buy your business and then they will give you those extreme extremely high valuation expectations how did you survive this period and found the good ones >> so I would A general answer to this topic is it depends a lot how mature your market is in in terms of M&A. What we had back in the days with occupational health is a very immature M&A market. So they had hardly seen any offers of any competitor nor any M&A broker. Yeah. There is some other markets in Germany for instance dentists. Every dentist has received at least five to 10 letters. Yeah. If if if the dentist is in a certain size and so they don't they know what EBDA is. they know the multiples they they have an understanding of net debt and so on so forth. So our market was very uneducated. So when you when you do this organic outreach what we first did did is kind of educate them a bit. Yeah.

19:11 Like look this is a valuation. This is how we would do it. we wouldn't pay everything up front. We want to delay some components of the purchase price. So there was a lot of education part to it. and there was also a lot of you don't need let's not call it waiting but patience. Yeah. So because you hardly hit anyone that is exactly at that point where they tell you okay I want to sell my company within the next four months. That is the key advantage of M&A brokers there. You know the deal is actionable. When you do organic outreach you have to go their pace. Yeah. And you have to be there at the point where they think of selling the company. But often you you reach them at a point where they didn't think about it yet or or are not super super keen on selling within a short time frame. Yeah. And so so you need to be patient as well and and wait for them that it's the right time.

20:05 And so what we often did is we did a meeting, we did a first meeting, we explained our concept, our vision, how valuations work. Sometimes we also dropped some numbers but we didn't do that with many targets. and then we told them look we would be really interested in taking this further. If you're ready then let us know. Then we do evaluation we sign NDA and we look at your financials and and then within 5 days we can tell you where we are like ballpark numbers. and some of them reached out to us two months later and told me yeah let's have a look at this.

20:38 Some of them right away and some of them like two years later. Yeah. >> Okay. And let's talk about the first first acquisition because after this one nothing will be the same when it comes to confidence and and actual belief that we can do that. So tell me about the the first acquisition. >> So was actually too small our first acquisition. You know everyone told us you need a nucleus that is sizable enough that has like 1 million EBA or or more. So and then our first acquisition was like 350,000 EBDA. So actually way too small. Yeah. But we were so keen on the market that we figured, okay, let's do it anyway. You know, when a transaction is actionable, then then you also either you do it or someone else does it. Yeah. In the end. so we decided to do the first. and it was a pretty cool it was a pretty cool doctor's practice in in Hildenheim in that's a lower sexy in Germany close to Hanover. And it was small. Yeah. It was like three four doctors only plus like seven eight other employees. So that's totaled at 211 maybe. Yeah. Which is shockingly small for for a small deal. But we had a very good relationship to the to the seller to the founder of the of the company and together with him and also his successor it was quite a good deal. What was the story from the first acquisition to five acquisition and from which one you started using depth because I I I guess in the first two three four acquisitions it's it's not very clear yet and and you can maybe share more about the depth side of of doing this.

22:09 >> I mean the first acquisition is the hardest. That's also why we decided to do it even though it was a small company. and and because then then you have a story to tell, right? So it's not only PowerPoint slides that you're going to share with your next seller, but you can you can tell him, "Look, talk to this guy. He has already sold to us. He can give you a proof point that we trustworthy guys. We we pay the purchase price, which is also often a fear when people see you first that you can't pay." Yeah. That's that's that's reality that many people apparently don't say they have the money, but then they don't. Yeah. And so so the second and the third acquisition was easier.

22:44 And then after the third acquisition, you're already a group of companies. And then you can actually visualize your vision of like, yeah, we're going to have some central HR function and some central recruiting and then they're going to help you with recruiting doctors which is a big issue for everyone in the market, you know. Then then the the story got tangible. Yeah, that helped us a lot to your question. so the first deals we did all equity which I would also in hindsight do do exactly the same way and then we did a debt financing together with a debt fund because so so there's two reasons.

23:16 So first of all it's speed. Yeah. So when you do the first deals on equity then obviously faster than if you negotiate with a bank every single time. and secondly debt fund or debt fund debt or specialty that is is absolutely preferable in my point of view. Yes, you might pay like an additional seven eight bips of of of interest but you can make it 100% bullet and that's super super helpful when it comes to cash flow because you don't have amortization of the loan over the years. So you can you you can use the cash flow for for one or two more acquisitions and that in the end gives you way more irr than these. Let's total it to 10% interest. Yeah. And and so speed plus debt fund debt is is the two reasons and debt funds only start up from a certain size. So you need two to three million EBTA to to have such a debt package. and that's basically the reason and that's also how we did it. Yeah. So we did I think four to five acquisitions. Then we did the debt funds financing on the holding and and we also did a recap. So so we got some additional debt for the deals that we already made. So the sixth and seventh deal was kind of 100% debt financed so to say. and that played really played out pretty well for us >> building and growing our ship. you were an entrepreneur. You you were not an investor. So you and you and Stefan something you've said as well these companies are built operationally. These are the people we are looking for and so you were the person there. So how was your day-to-day look like when when building all this?

24:58 >> I mean I mean year one was a lot of M&A to be quite frank. Yeah. So so meaning M&A actually it's more kind of sales. Yeah. So so you need to sit in the train and travel around and meet everybody in the market. I think in the first year in the first 12 months we had like I think 70 80 on-site meetings. Yeah. So, it's a lot when you think about that you have to travel all the time and that for every on-site meeting you need to have like three to four calls up front and and it switched once we had like two to three companies like with the third company that's when we started hiring someone for finance centrally and HR centrally and that's when we actually started building up central functions and what we first did is like creating a central setup so to say so we consolidated finance using one tool which is called Lucanet in Germany it's a controlling and consolidation tool which helped us to have like a real-time view on cash to have all our finances consolidated but also to track some KPIs based on company level so that was super important and with HR what we did is we got all employees into one system called Ponio and then we started recruiting centrally for as a service for the subsidiaries as I mentioned earlier recruiting in our market is super big topic because you don't have many doctors but that's specialty in occupational medicine. and they're rare to find or very old. So, you need to be super good at recruiting in order to get the best profiles. And that's where we started. Then it got a little bit more entrepreneurial and building it up, building it up. Then let's let's zoom in again at a at a status where we were at like 15 companies. There we were like 300 350 employees and we had a team of 15 to 20 employees centrally and the biggest two teams was HR. So we had like out of those 20 I think seven eight were recruiting. Yeah. So in order to recruit the doctors because we needed the doctors to achieve more sales. Yeah.

26:54 It's pretty basic. so with every doctor we could take in some more clients and there was a prerequisite for growth. And the others were quite evenly split between let's call it a value creation team. They did a lot of pricing initiatives M&A and finance. Yeah. and then you get like two let's say three employees each. Yeah. And and that's also where it got more entrepreneurial so to say and especially with that value creation team there. We did like deep deep dives into every company. So we we went to Hildesheim because I mentioned it earlier and did a pricing project there or we went to Hamburg and and we consolidated three companies together. Yeah. And those project that was like the most entrepreneurial work I would say because there we went really into the company.

27:39 Actually me myself I also went with a value creation team if it was a strategic project into that company and then we we spent there every week like one day and and did pricing. >> Now you and Stefan what were the roles strengths and weaknesses when when building all those because there were those different phases and there were obviously phases which which you haven't both of you hasn't haven't experienced before. So how did you go through this and which time you know that okay it's better for you to do this it's better for you to do that.

28:13 >> Just to mention in the very beginning I started off with Alex. Yeah. And later on Alex and I split up and and Stefan joined. Yeah. So so that was kind of also journey which goes a bit into the direction of your question. Yeah. So Alex and I were still very good friends. but we both had to learn that if you're good friends it's not always a match in in terms of work. Yeah. And in the midst of the the fundraising when we did the term sheet I mentioned earlier, that's where we actually split up and Alex remained a shareholder and but dropped operationally. He dropped out of the company and then I started looking for co-founder. So together with our lead investor with Patrick from Tangleman. We we interviewed candidates.

28:50 So I did like I called up everyone friend of friends who could potentially be a fit. So also there I had a long list of candidates and then we invited three of them for workshops and Stefan turned out to be a very very good match and now he's also close friend of mine. Yeah. >> but let's let's let's stop for for a second. How >> how was the process there? You talk here it's so easy but how do you actually like >> Yeah, it's tough. It was very tough >> because because I mean we're in the midst of negotiations >> and it's it's potentially it's a deal killer, right? if the if the founding team splits up like right in the middle of negotiating an S sha I see that yeah Alex and I we communicated very transparently the reasons with all our shareholders. So first we decided then we wrote an email like explaining it and then the next day we called every shareholder or potential shareholder together and explained the situation and why I would stay, why he would drop out and at which terms. So we kind of didn't even negotiate. We just said, "Look, this is the terms." And then some of them, like one or two said, "Oh, this this little hot to me. I'm I'm out."

29:59 But most of them stayed. Yeah. And so we filled up we filled up the funding with people that we had in kind of our waiting list. And so it was okay, so to say. We I mean, maybe we're also lucky or was the right timing in terms of fundraising. I don't know. Yeah. But maybe it was also the communication and and then Alex stayed for I think three more months to have like a smooth handover. and Alex and I and and Patrick we together got to know those candidates.

30:28 And so what was really important to me with those candidates is that it's a profile that complements me. Meaning I'm I'm kind of what what I'm good at is I can go out, I can I can do sales, I can talk to someone. and and I needed someone who is is more rigid in terms of processes, who's more rigid when it comes to analytics and so on, who's also more diligent than I am. And and that's in the end why we decided for Stefan because he had some previous M&A experience. He was at a later stage VC.

30:58 and he was he was a truly intelligent analytic person but also very good entrepreneur. Yeah. and and so we actually didn't do interviews, we did like so we did just like one day working together. So we invited those three people and we said look let's sit down together for one day and work and then see how it goes. and in the evening we had a dinner with our girlfriends and wives. Yeah. So to also get a feeling for if that would u like of if it would work on a personal level and and yeah that's that's how it went. And then we decided for for Stefan. I I still remember that Patrick said, "Look, I mean the others are good as well, but but Stefan's the only entrepreneur and and that's in the end when we when we >> Was there anything else which why the other candidates weren't a good fit or just the fact that Stefan had this entrepreneurial?"

31:51 >> Yeah. I mean, he was the best entrepreneur and it turned out to be true. Yeah. And he he still is. Yeah. Obviously. >> Okay. So, now where we are? We are you mentioned recently 15 companies 350 employees. >> There was roughly to the point in 2024 when we started the process which ended up in in selling some shares to W pinkers. Yeah. >> Mhm. What was the like I've I've I've learned recently that great companies are bought not sold. So I guess they reached out to you.

32:27 >> Yes. Actually both. Yeah. So fun story we reached out to a company there was a company of the investment of warbox investment director's parents and that's how we got to know pinkers already I think in 2021 or 2022 and back then he he told us look this is way too small for us very cool what you're doing but not interesting for us and then two years later we we talked back and and suddenly we were large enough for a potential deal. Yeah. And then we also initiated a broader process. So yes, it was sold in a way. So we had an investment bank. We we spoke to many parties. But in the end it turned out to be WA Pinkis which we already had a relation to from back in the days. Yeah.

33:15 So both >> not too many people have this experience of of selling to PE rolling equity. What changed? Like it's 2026 now. You've been doing that together for two two and a half years. How much can you share like how much has has been changed when it comes to all things getting better? >> It's a different scale and and it's also a different level of professionalism, right? So I told you back in the days we were like 20 people in the holding that's still a very small team. Yeah.

33:42 even though we were in total in the organization we were like 350 to 400 people back in the days but it was still a little startupy so to say. Yeah. when it comes to the people and also the culture and the feeling and and and now together with Warborg it developed into a true corporate company in in in a very positive meaning. Yeah. So it has clear processes, it has a central brand it has a management structure that we started setting up back then but now you have like regional offices in place in every region. Yeah. Then there's very clear P&L responsibilities and so on so forth. And that's just mentioning some examples which you can do across all dimensions. Also when it comes to operations there is Medigeni the software that we jointly developed further that we're now digitizing all processes in the subsidiaries so in the local offices with and yeah so so I think it's it's it was the right time to do it. Obviously every time when you do such a process in hindsight you think we might have maybe we should have waited for six or 12 more months. Yeah.

34:48 then we could have done this and this acquisition and then done a process. Yeah. But in the end I think it's good because you need to also leave some value creation for the next and and Warbook needs to leave some value creation for the for the potential next investor. Yeah. So it only is a success story when when everyone has his own success story so to say and and I think so far it goes very well. Yeah. As you mentioned earlier now it's a company with 1,100 employees. We're one of the market leaders in occupational health and related services in Germany. And that's pretty impressive when you think it's just 5 years ago that we started.

35:23 Yeah. >> What comes to mind if I say a word resources like before and after selling to a to a BE firm? What what changed when you when feel going to the office maybe reaching out to some some some some banks or some people and now you have those guys with you and previously it was just just you and your smaller firm. >> Sure. Sure. I mean just to put it into right perspective right I mean I was I was working together with Warbook for like nine more months so to say but then as of beginning 25 I'm only a board member right so as I'm not operational anymore but back from the days that I was working personally with war pinkers I I felt it was very inspiring so I was sparring a lot with Durk Dirk Vessner he's a former former chairman of compute group or CEO sorry and he's now the chairman of the Azipa board and he also was a member of the board of directors at at Deutsche Telecom. So, he's a senior, very experienced guy.

36:18 Yeah. And and which was new for me as an entrepreneur to work with someone like this, very personal on a day-to-day basis, so to say. Yeah. Like to have the sparring and I think you make some bolder decisions. Yeah. When it comes to pulling strings because you also need to because it's it's a different scale. There's a lot more money at stake. Yeah. and and and so you need to be bold in your decisions. So we did larger acquisitions, we did some very bold move when it comes to going into that software play and and rolling out that software and automating processes and and the likes. Yeah. So that's that's I think what changed for me that you that you work more professional that you take some different decisions that you spar with different people but in the end it's it's it's still the same people on the ground right so so the nurses and the doctors those haven't changed much and I think it's also important for the future of AIPA that we keep that in mind yeah so so that we keep in mind it's still it's still a group of companies from it from its origin it's it's a heritage from its origin so there has been this one founder in Hildheim who started that company 20 years back in time. Yeah. And somewhat this still needs to be part of the DNA of Azipar while it still is a good thing that it's becoming a a corporate company. Yeah.

37:39 it's it's the right way we're going there and as long as we keep these two things in mind it's it's going perfectly well. >> Anything else you'd like to add? Maybe what what's what comes to mind? you mentioned you becoming at this private equity firm together. You guys becoming more bold. Is there anything else you would like to add which which was like a obvious it's obvious now but it wasn't obvious before. >> We hired better people. Yeah.

38:05 >> Mhm. >> So you you know you remember the story with the Ebis hotel. Yeah. And the 60. Yeah. So >> we were very cheap in some ways. Yeah. So, so and and unfortunately also when it came to some hires that we that we probably shouldn't have done. Yeah. That being said, I think so those are the main topics that come to mind. Yeah. I think we were bolder in in in in some strategic decisions in acquisitions and also in hiring. We hired better profiles. obviously also the brand War Pink has helped. Just to give you one hint, yeah, we still we still had no coffee machine in the office when we exited because we were so frugal. Yeah.

38:44 we had like just this filter coffee and and then at some point I think in 2025 there's now a proper espresso machine. Yeah. >> The folks listening who might reach out to you in the future looking to raise capital from from you do do you expect them to have this same type of mentality? >> Yeah, somewhat. Yes. Yeah. I mean they don't have to be frugal but I think it comes along with entrepreneurship that the euro is always better spent in your company than in everything else. Yeah.

39:13 and we wanted to grow and build a company or a group of companies. And so we felt it's it's simply didn't feel important to us. Yeah. to have like the the nicest espressonista machine. We felt like this money is better invested in hiring another intern or this money is better invested in in in doing this and that with that company. Yeah. So, and I think that mindset is super important, especially the first two to three years because that differentiates true entrepreneurship from s just some private equity guy who wants to gain money doing a rollup. Yeah. And but you need true entrepreneurs if you want to be successful. It's not enough if you're just buying those companies and put them together and then sell them. Nobody's going to buy that. Yeah. So, so you need an entrepreneur in order to to build those processes, in order to do to deliver those those synergies and those value creation effects because otherwise private equity firms are not interested anymore.

40:08 Now before let's talk about this area of before selling u I want to talk about the integration and the culture part you giving like a sort of a master class of >> I don't want you to teach I want you to what you did and what you experienced and in that way hopefully this being helpful for forks listening because you've seen a lot that not too many people have been able to do that so when it comes to integration building culture. What What would you say?

40:39 >> I mean, first take away is start early. So So we start with a second or third deal, right? And you should start right away with a first deal. So as soon as you've done the the first deal, start your integration. When it comes to don't don't hesitate to change the tax advisor at day one. I see many rollups that hesitate to change the tax advisor and then they are like, " yeah, but maybe it's better if we do it in half year time or 12 months." No, don't wait.

41:04 Yeah, do it right away. tell the owners transparently in the process, look, it is part of the game. There's going to be some changes and they're going to they're going to take it and if they don't take it, then you shouldn't buy them because then they're going to be troubled in the future. Yeah. so so very first learning is is just start with the first deal and with your integration. and and second learning is I think I think you need a culture that that that does both. So, so you need a holding that is like very fast, very young, very startupy in a way, but you also need people that respect this kind of heritage and that there's people that build up these these companies for 20 years, right? So, you don't need like burden startup guys coming to that company and then knowing it all. You need people who respect that and and who also show that respect but then still manage to change things. Yeah. And I think that's a thin line which is very important. I think one learning that we had it's very important so a bit later in the journey not not with the first company but maybe with company four or five you need to start value creation you don't need to to do it all like really focus on one thing and and get that right yeah so so I see I see some of my investments I see they they want to do it all yeah they want to centralize procurement then they want to centralize disposition of of let's say some some like handymen. Yeah.

42:29 they want to they want to change ERP and then they want to do something with marketing and they they want to do something with sales. That's not going to work. Yeah. You should focus on let's let's have one KPI and let's say my KPI is I want to achieve 10% growth per year and then take one or two very simple measures but execute them super well so that you can see the effects at least with some companies at the exit. Yeah, that's really really important that you that you let's make an example. Yeah, we were Azipar, we started in year three doing pricing projects because we saw these guys they haven't changed pricing with some customers for 20 years. So where the market price for an occupational health practitioner was at like €180 per hour, they still charged like 90. Obviously there's a gap that you can increase the price to, maybe you don't have to increase it to the 180.

43:20 you can tell the customer, look, you get a discount of 20%. And you still have a have a 70 plus. Yeah. in terms of margin. and so so that was our lighthouse case. And in in hindsight, we probably should have put more more resources on that, more energy. We did that with two or three companies. So we could show some effects at the exit. But it's even more powerful if if you can show it on a group eBay level and you can show like look here these these 10% they come from pricing that's that's cool. Yeah. And so so that's learning number three. Build up your lighthouse cases and don't boil the ocean. Don't do it all. Yeah. Focus. I think it's the fourth or fifth point now. is is don't start having a burn rate. Yeah.

44:05 Because I see some people they take this advice too serious and then they do too much in terms of integration and then they start hiring a CTO and a chief product officer after the first company. That's also not the right pace. Yeah. So because then you end up in the VC type risk profile. So yes, please hire those people earlier. do some investment but investment means like two two FTE for 6 months and not 10 for one year.

44:33 Yeah. So just to get perspective, right? because then you end up in such a VC case. Again, >> I have written down a few things here. One, you mentioned pricing and I'll add you a few more. One is what you mentioned before is marketing, then there is sales and then there is customer support. Maybe you can share something on each if something comes to mind and maybe how long do you focus on on this one thing to just to give a perspective to just see the see the hopeful improvements when making those changes. So, so just to repeat right what we did is one of those and we deliberately decided against the others.

45:05 What I can share now is experiences from my investments from other cases that also pulled some other levers than pricing. Yeah. So what I can share for instance is I have one investment and there we more focused on growth and there we focusing a lot on lead generation. So we we we generate leads in that business with cold outreach with online marketing and and also mailing and CRM tools to to get leads for the local salesmen and owners that we feed to them and then they close them because there we have some some we found some potential that we can always take it's project based work. Yeah. And the more projects you have, the better you can select the projects with the best margin. So it's a two-fold lever. So on the one hand, you have growth because you have more projects. And the second lever is if you have more projects that you are declining, then you have better margins because you only select the projects with the best margins. That's the the lead genen part. Then I have another investment where there's centralized sourcing. So procurement.

46:13 Yeah. So they have a team that centralized. So for them it's really important because they they have like some parts that they need for the business. and they have some synergies when they buy it centrally. That's that's pretty clear. What else do we say? Yeah. Like what we later did now with RCA is is we have this software play, right? That's also a good example with Medigeni. So what we're doing there is so so before you know the process when you come to into this into this practice into into this doctor's practice and you do your assessment for occupational health then it's often very paper based right so you need to fill in a formula for your enemies and together with a software it's all digital we generate reports automatically you have a process that is very structured so there's no difference in in service level or quality between the practitioners at least in theory and that's also something but that's that's a level that needs significantly more investment than for instance the central procurement.

47:11 Yeah. >> Now the the journey from start to to exit lasted approximately 36 months which is unusually fast. Can we talk a little bit about can you share maybe a bit about the investment returns and the transaction to Warberg Pinkas? What what can you share? >> It's a very broad question. I mean I mentioned the number of employees that already gives you a good feeling that the company by now again tripled in size in just 48 months right so we continuing this pace so to say yeah which is very impressive also by the new management yeah what I can share is is it always makes sense in also when we invest with AA now or when we look at investments privately Freddy and I we often we often tell the teams you need at least 10 million EBDA to be exit ready. And why is that? it often comes along with at least 10 to 15 deals. Yeah. So, when you calculate 1 million EBDA per deal and it also comes along with being a mid-market deal, which is good because then you are open to another landscape of buyers, right?

48:16 You don't want to sell to small cap private equity funds often because they are a bit more price sensitive. with mid-market and large cap funds, you can build a growth journey together. Yeah. And and this growth journey often comes along with a better exit multiple. Yeah. And and that's also what we kind of did with AIPA. Yeah. We we got close to that figure. and and then we had a growth journey together with B Pinkis and it also reflected some of our compensation that we received as previous shareholders. Yeah. That we went on that journey and I'm personally still invested as you mentioned. I'm still a shareholder in the company and yeah maybe that I can share. Yeah. So that gives you a feeling. So we were such a mid-market deal. So that gives you a feeling for the region of EBDA we were and and for our previous investors I think it was a very good return. I I think Freddy and I we mentioned in some other podcasts that it was a I think 80% IR or so we mentioned so that number is already public and I can share >> when things went wrong. Can you maybe share what went wrong because maybe there are some again obvious things which people who are listening and what you do yourself as well on day-to-day basis when it comes to making those investment decisions backing other independent searchers of what what are some of the things you always bring out make sure you you look at this or make sure you keep a way of of doing this. What are some of the things you would like to bring out because based on your experience again >> I can give you an a answer. So, so the fund that I'm currently doing that is investing in in rollups.

49:51 >> so when when I talk to when I talk to founders there, I often tell them try to iterate early with the market. So when you are in those in in this ideation period, yeah, then you should start very early, just take your phone in your hand and and call the people in the market, discuss with them openly, be transparent, be nice. and it brings you to result way faster than doing like desk research and modeling for 10 days or so. Yeah. So pick up the phone, do some cold calling and iterate fast in those in those first weeks and and months. You should have a clear target.

50:23 So don't make this ideation process too long. I've seen some teams that are ideating now for 12 months. Yeah. Don't don't overdo it. Yeah. Ideate. Yeah. Take your long list, but then also boil it down quickly. get two, three, four markets and then within 10, 12 weeks decide for one of those markets. Don't do it longer than that because at some point you just need to jump. Yeah. and and obviously you can always find something that could be better with another market or you can always find something that you should discuss still with aspiring partner but at some point you still need to jump and and I think 12 weeks is a good is a good time frame if you're doing it full term or full-time and after that when you start talking to investors I think many teams now underestimate the importance of pipeline so it's a different pitch also when you when you negotiate your terms with an investor so Let's let's take a it's it's a very weak position if you tell them yeah we have one LOI we spoke to some brokers and and we might get a second but then there's no pipeline behind yeah what you want to show is look we reached out to 500 companies in the market out of that 40% replied so far out of that we had so many on-site meetings and out of that we generated 20 companies where we have financials now that's powerful yeah because then you can tell your investor We can very clearly calculate with our conversions this should result in 5 to 10 million EBIDA within the next 36 months. Yeah. And that's what you want to hear and what also gives you a strong position when it comes to negotiations.

51:58 And many founders they have the feeling that yeah maybe one or two LOIs and I just call up some brokers and then then I do fundraising and then I do my outreach. Yeah. But I think that's the wrong order. Another advice is once you have funding the first months is purely M&A. So don't don't don't get rid in discussions don't get lost in discussions where you talk about I had one team that was that was talking about ERP system integration before we even had bought a company.

52:28 Yeah. So I was like look guys can we please first buy five companies before we before we integrate ERP systems and and I I see where it's coming from. Yeah. Because everyone's talking about integration. So that's why I'm also emphasizing this point. Integration is important but the first six months is is still M&A focused because you have to build that pipeline and you you need to be you build up momentum for the next years. Yeah. for the first six months and after that comes the the integration part that we already discussed a lot a lot now. Yeah.

52:59 >> I have a long list of that I on my on my notes lessons from Felix and we don't we we're not going to go through all of them. I just want to cover it lessons from Mick and Felix otherwise I feel bad. >> number one is bring in experienced operators or adviserss. Bring someone into the company who is in their 40s or 50s. Can you talk more about this? >> Did I say that? Bring in someone who's 40 or 50. I think I took it from the the maybe now this is a translation issue because I don't speak German but I was listening as German version >> because I said don't don't bring them in >> because shall I shall I say something about that? Yeah. So because many people when they come to us they they feel it's extremely important to have that industry guy that gray hair industry guy who is like 55 years of age and I feel it's not the right skill set for a founding team you can have such a profile as an adviser. Yeah. So meaning have a face to the market who also knows the market when you have a question when it comes to to value creation or so but I wouldn't take such a profile into the founding team even be it let's take the example of dentists yeah I wouldn't take a dentist into the founding team I would always take a dentist into your advisory board or maybe into your chief medical officer you can you can make your one of your first acquisitions founders or or sellers you can make your chief medical officer and I think that's way more efficient than having that in the founding team. so so I would revise that statement if if if I really made it. And what was the other point again? the other lesson.

54:41 >> No, I you know I think where it come came from I was listening your Frederick's episode in German then I was taking all the German German language translated it and it it maybe it was something Frederick said because there were another things he has seen many operational situations he brings stability and understands people management these were the notes I've been I've been taking when listening to German version of of one of the episodes >> yeah maybe maybe it was Frederick so so I I would state a little different Yeah, as as I just said. So, it's good to have that face to the market. It might help you in in M&A, but also what you need to keep in mind if it's someone who's known into market then people have an opinion about that person and that opinion might also be bad. Yeah. So, be careful to to keep the dentist example. So, if it's a dentist that is known in the market, but everyone hates him, then it probably doesn't help M&A. Yeah. So, it's a it's a twofold thing. Yeah. It can play out well, but it also can be a negative impact.

55:42 >> Very glad actually that I asked this. So you actually guys have different opinions. Felix, I I really enjoyed the conversation. >> Fascinating fascinating story. I think it's important to mention what you're doing now. Maybe say it with with your own words. >> Yeah. 10 months ago or 11 months ago, Frederick who was one of the first investors at AIPA and we know back from BCG back in the days he called me up and told me look actually what we're doing on the side now these rollup investments I would like to professionalize that and out of that originated a fund named AAN and we are now a fund that already invested into three small cap rollup platforms so to say in Germany and we're always on the on the look for for new teams. Yeah. So if you're a good entrepreneur then reach out to us and and what we like to do is everything in that is like a a niche market German middleand especially in Germany, Austria and and Switzerland.

56:40 But we also have a mandate for for full Europe but focused on on German spoken areas. And yeah, super happy that I took that path because back in the days Freddy and I we were me we were managing tickets of like maybe three 4 million euros in a WhatsApp group and I think this is way better setup than than before. >> Yeah. And the important to mention here I had a episode with Frederick as well. So this Frederick episode will come out first than than this one. So guys, you're listening, you can go back and listen the one we did with Frederick.

57:10 But Felix, again, congratulations on your success and thanks for being so transparent with with everything today. >> Yeah, thanks a lot. I enjoyed it a lot. Thanks, Mick.