Podcast Ep 215: Laura Dillon of Waterland’s vision in helping Irish businesses reach their potential has already generated 1,000 new jobs.
Laura Dillon, head of Waterland in Ireland, was selected in May as The Irish Times Business Person of the Month in association with Bank of Ireland.
This fitting recognition came on the heels of Waterland recently making its fifth biggest investment in Ireland with the acquisition of a stake in Bellew Electrical.
“What makes me very passionate is supporting business owners and entrepreneurs and families to help them grow their companies, and I suppose ultimately, to support that growth. I like the dynamism. I like the diversity”
The private equity player has now partnered with more than 20 Irish businesses in the last three years, adding 1,000 roles to these firms through new hires and M&A.
Between them these companies will grow their revenues to more than €350m.
Helping SMEs grow to their potential
Waterland is an independent private equity group set up 24 years ago in Holland with over €14bn in assets under management.
Dillon took on the role of head of Waterland Equity Investments in Ireland in 2020 just as the pandemic raged and shuttered the premises of SMEs all over Ireland, Europe and the world. At the time Waterland had a €2.5bn fund aimed at investing in SMEs and helping entrepreneurs achieve their full potential. Recently, Waterland has closed two additional funds worth €4bn to support European businesses.
Whenever you talk to Dillon, she always brings her ‘A game’. She’s completely in the moment and resolutely focused on the next victory. It’s pretty much what she’s about when you consider her sporting and business background. In 1992 she won silver at the Optimist world championships, the largest sailing class in the world. Four years later she took bronze at the youth world championships and became the only female sailor to win the Irish Helmsman’s Championships in its 60-year history.
She is also an accomplished entrepreneur in her own right, having run her own healthcare company DSI Distribution which provided cosmetics to Penneys and which was acquired by United Drug.
Prior to being an entrepreneur she worked at McKinsey in the US and earned an MBA from Harvard University.
When we first spoke three years ago, Dillon explained how she sees business through the lens of the kinds of teamwork that helps steer a sailing boat safely through stormy waters. “Leadership is important, but teamwork is incredibly important. To have a strong team everyone needs to feel empowered, trusted and respected. And unless we’re all contributing and working towards the right endpoint, it’s not going to work.
“The biggest thing ultimately is to be passionate about what you do. If you’re not passionate about what you do, whether in work or in sport, you’ll never be the best you can be. Ultimately, it has to be something you are passionate about.”
That same steely spirit was evident when we spoke recently. She does exactly what she sets out to do and more. Recent investments include €30m invested in cable business MTM Engineering to power its growth strategy.
Waterland has also invested in Mullingar business Writech that has set the business on the road to becoming one of Europe’s largest fire protection systems businesses through M&A.
The fund recently invested in Bellew Electrical in Drogheda, one of the largest independent electrical wholesalers in Ireland, with a vision to grow the business across Europe.
Another recent €50m investment brings together four established businesses – Gaffney Mechanical, O’Connor Heating and Plumbing, Caldor Solar and Zetta Home Services – into a kind of environmental super group that will be known as the Net Zero Group.
Dillon recalled the early days of Waterland in Ireland. “I set up Waterland in Ireland on 16 March 2020 just as we went into lockdown. So the first few months were definitely a bit tricky. I had taken over the nursing home business Silverstream. It wasn’t quite what I had expected for our start in Ireland but luckily we’ve gotten through all of that and we’ve built a great team here in the Irish market and we’re lucky to have partnered with some great businesses.”
Identifying drive and ambition
The Waterland Ireland team
She cites the investment in Writech as an example of Waterland’s modus operandi. “The business is 30-plus year’s older and Ted, the younger brother really wanted to drive the business forward.
“So we came in and partnered with Ted and have really helped to take a fantastic family-run business headquartered in Mullingar from being solely Ireland-focused to now being focused on the UK and internationally. It is now one of the leading independent fire safety companies in Europe and we’ve supported Ted in making eight acquisitions over the past three years.”
Similarly, with MTM Engineering, she explained how it too was a family business and the youngest son Brendan Mee had a vision for driving the business forward. “It really focused on getting into data centres. Initially it was power but now it is also data cabling and focused on the critical infrastructure for the big, hyper scale data centres around Europe and beyond.”
Dillon said that in Ireland Waterland has a particular focus on supporting and working with small to medium enterprises generating profits up to €75m, with plans to accelerate their growth.
She said that the ambition and drive demonstrated by Ted Wright of Writech and Brendan Mee of MTM must be supported, evolving hitherto family businesses into scaling European enterprises.
“If there are inter-generations involved in the business, it’s really nice for maybe the parents to be able to sort out their pensions and take substantial amounts of money off the table while at the same time any of the siblings that want to be involved they can retain their shareholding.
“It also allows families to be able to separate the business from those family dynamics. And then what happens is people can get head space and really focus on driving the business forward because they know they’ve got a supportive partner like Waterland on board who can come in with capital. We also have 13 offices in 11 European countries where we have people on the ground, speak various languages and we work together collectively as a fund.”
This Europe-wide network facilitates introductions to local markets and leads to potential mergers and acquisitions.
“We really look for those people who do have that ambition to still significantly scale their company, you know, because, being perfectly honest, if someone just wants to keep kind of going along the way they’re going and doesn’t really want to grow the company that much, then there’s probably no real space for us in there. We really want to be supporting people that do have ambitions to double, triple, quadruple their business over a number of years. And that’s where we feel we can really support them to do so.”
In just three years Waterland has partnered with more than 20 businesses. Those businesses have generated 1,000 new jobs and €350m in additional revenues.
Dillon said that the modus operandi includes taking board positions within those companies. She said the most important aspect to the relationship is being aligned on goals and the longer-term strategy. The business owners remain in control of the business.
“We get very involved with helping with the acquisitions to really build out the companies. And that’s where we feel a lot of our expertise is and we will get involved in senior level recruitment. A lot of the businesses we partner with may not have a CFO, they may just have a financial controller, they may not have a group head of HR, they may not have various different roles. They probably haven’t focused that much on ESG, historically, they might not have a senior operations person. So we’ll support with the recruitment of that, but we try not to operationally get too involved in the detail.
“We know where our strengths are and where our weaknesses are, and we don’t want to meddle in the business. We want to be there where it’s supportive. The CEO is still very much the person running each of the businesses. You want to be able to stay on a strategic level, not be caught in the weeds.”
Looking to the next three years of Waterland in Ireland, Dillon’s plan is to accelerate the pace of deals but potentially larger deals too.
“At this stage, now that we’ve earned a bit of credibility, we can certainly begin to think a little bit bigger and do slightly larger transactions. There are not that many businesses of significant scale, but we certainly wouldn’t be afraid to partner with larger businesses.”
She added: “We’ve always focused on partnering with small-to-medium-sized businesses to help them accelerate their growth and ideally through international expansion. Unlike a lot of other funds we work very collaboratively together because the economics are all shared across Europe. The ethos is very much that we work together.
“We meet every week and we see whose focused on what, perhaps I want to do something in the broader healthcare sector or the pharmaceutical sector or the food sector. I can find someone who has done such deals in various countries and we will work together. Or a German or Belgian colleague might come to me to see if there are packaging businesses in Ireland an investee might partner with. The ethos is very much that we’ll all work collectively together to try and build all of our companies to be the best that they can be and become European leaders.”
Dillon said that there are many different sources of funding to grow companies and that private equity is just one option. “Private equity can be right for some people but not for others. It very much depends on what you business ambition is and what the individuals really want to achieve. There are times I come away from conversations saying ‘you shouldn’t partner with private equity’. I’m a big believer in that you always learn something from a conversation. Ireland is a very small network so it is good to at least have the dialogue. In some cases they might be better served talking with their bank or if they want to step back entirely, look at a trade sale. It’s quite nuanced but there are a lot more conversations happening and people understand the different options out there.”
Reflecting on the past three years, Dillon is as energised as she was at the start. “I’m very passionate. I’ve done different things. I’ve been an entrepreneur, I’ve been a consultant, I’ve worked in a big PLC. But you know, what really gets me out of bed, and what makes me very passionate is supporting business owners and entrepreneurs and families to help them grow their companies, and I suppose ultimately, to support that growth. I like the dynamism. I like the diversity.”
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