Brett Lindsey, CEO of Everstream, says balancing the needs of investors (AMP Capital backs Everstream) with the needs of the business during challenging times, such as the pandemic, has a lot to do with trust and alignment.
“So when we went to them and said, ‘We’d like to invest $300 million to build fiber across the Midwest,’ that’s right in their wheelhouse,” Lindsey says. “It’s a $3.5 billion fund. They’re used to investing somewhere between 20-25 percent of their assets into a specific entity. By the time we get into next year, they will have invested north of $600 million into Everstream. So they’re very bullish not only about what is happening in our sector, but our ability to deliver on what we said we would do over the last two years that we’ve been in this partnership together.”
From an acquisition standpoint, Lindsey says Everstream has a very specific target in mind. Being in the fiber business, he says the company isn’t going to buy a company that’s distracted by having a number of other businesses under its umbrella to consider. Everstream also wants a business that has customers that they want to acquire in a specific market because there’s the sense that it could grow them with the assets, relationships and cash the company has behind it. Also, he says he’s looking for fiber assets that are physically close by — either in the cities the company already operates in or that are on its roadmap to go after, because the company isn’t trying to expand beyond where it’s already planned to go.
But it’s not just assets the company’s after. It’s also looking for talent.
“We’ve grown in the last 10 years since I first joined form 23 people to over 350,” he says. “Last year we hired about 120. This year we’ll hire somewhere close to 150. So finding talent in these acquisitions is also key for us because these people not only understand the business, they understand the sector.”
To maintain their alignment when it comes to acquisitions, Lindsey says there are quarterly board meetings that present an opportunity to assess the strategy and its progress. But there are also ad hoc conversations that take place as opportunities present themselves. Lindsey says when he hears of a potential acquisition, there’s some immediate assessment to determine if the business is a good fit — looking at the valuation, the assets, and whether the company could be successfully integrated. Then, he says, the company’s PE partner is consulted so that they understand the value and how it’s helpful in hitting their specific thresholds in the arrangement with Everstream.
Lindsey talked more about his acquisition strategy, as well as his experience with M&A during the pandemic, at the Smart Business Cleveland Dealmakers Conference. Click the video above to catch the full interview.