This episode features an interview with Everett Hill, Managing Director at ICV Partners. Mr. Hill had an extensive operating career at Coca-Cola Enterprises, where he honed his functional expertise in field sales, inside sales, and distribution, and led technology-enabled corporate transformations. His largest P&L was $250 million. Mr. Hill began his sales career carrying a bag in Rohm and Haas spinoff companies. He is on the board of the Georgia Center for Nonprofits and has a BSE in chemical engineering from Princeton University and a Masters in Business Administration from Harvard Business School.
Below are key takeaways from our conversation. Be sure to view the whole conversation for more details and insights.
- ICV Partners invests in the lower middle market, often in firms that are family or founder owned.
- Primary sectors of interest are healthcare, business services, food, and consumer-oriented companies with revenues ranging from $30 million to over $300 million.
- Everett has been involved with ICV for 10 years, initially as a consultant before joining as an operating partner.
A Founders Mindset
- Founder stories are important. Several came from nothing and built substantial businesses through hard work.
- For example, the founders of ICV’s Buffalo Wild Wings franchise, built their first restaurant with their bare hands while holding separate full-time jobs.
- The founder of ICV’s marine logistics company, Horizon Air Freight, arrived at Ellis Island in the late 1950s and built a multi-generational success story.
Experience, Empathy and Value Creation
- The real key to success in this role is one word—empathy. Everett works hard alongside portfolio leadership teams to help them be a success in the next chapter because his story is similar.
- ICV’s model is for operating partners to be engaged during the diligence process alongside the deal teams to help them evaluate the strength of the company along six key functional areas.
- Everett brings his sales and marketing experience, as well as experience streamlining internal workflows to an organizational assessment.
- No deal is complete without that perspective and it's a natural segue from that diligence phase where working together to execute value creation once the deal is closed.
Getting to the Next Level
- Playbooks are important and are constantly being refined.
- There’s always some learning to do and Everett is there to work with company leadership to map that journey together.
Finding New Strengths During the Pandemic
- Portfolio company leadership had to pivot or focus on different areas of their businesses due to COVID-19 which strengthened their skill set.
- Clearly the pandemic impacted a lot of businesses’ 2020 performance, but in the grand scheme of things, it's been a strengthening period rather than a sapping of strength.
- At first it was extremely stressful to see them go through this and not be there to help them physically.
Learning New Skills to Break Through
- The key to success with portcos is helping them to understand that they're in a mode of having to learn new skills. There's a tendency to rely on the same way of executing that got you to $50 million or $80 million. But those ways of looking at things, those skill sets aren't adequate to break through the $100 or $200 million barrier.
The Right People Working on It
- Bringing in third party resources, like Chief Outsiders is a key to that success. The stakes are huge, and investors like ICV cannot afford a setback to their timeline.
- Personally, Everett cannot afford for a third-party resource not to be successful because he loses the confidence of the leadership team.
- Along the way, Everett likes a lot of communication so he can sleep at night knowing that this major transformational effort has the right people working on it, not cutting corners, listening to business and helping them be successful as quickly as possible.
- It's about empathy and building a roadmap, having seen this movie before, for companies to double their revenue or EBITDA.
- You have to balance that formulaic playbook approach with real-time thinking on your feet and being attuned to the specific needs of that portco company. It's a creative process.
Watch the next episode in the series: An Interview with a Private Equity Operating Partner Experienced in Value Creation