After keeping investment plans at rest due to the appearance of COVID-19, at LLYC they are already clear about the next goal to meet: doubling the size of the company by 2025 and becoming a company of 100 million dollars.
Although they coped with the pandemic practically without setbacks, José Antonio Llorente, co-founder and president of the global communication and public affairs consultancy, which closed last year with revenues of more than 52 million dollars, assures that the health crisis disrupted his projects, So they decided to wait until 2021 to start with their accelerated growth strategy that is based on a clear bet, acquisitions.
“We have a plan to double the company and be a $ 100 million company by 2025. How are we going to do that? With a big bet to incorporate, via acquisition, a series of businesses based on technology and that connect with communication ”, explains the executive.
The first transaction of the year happened a couple of weeks ago in Spain. The performance and digital marketing agency APACHE joined the portfolio of companies that make up the innovative solutions unit of the global consultancy, Deep Digital Business.
This strategy is not new, for at least five years they have been dedicated to buying agencies. But now it is different because the firms they acquire are becoming larger and more representative in their place of origin. APACHE, for example, is considered the best digital company of 2020 and one of the most important independent companies in Spain.
In 2021, the idea is to complete two more transactions, one of them will be in Latin America, the market that generates 55% of global revenue.
Expansion: How are you going to finance this strategy?
José Antonio Llorente: We are, at this moment, studying the different options we have to raise capital to finance the growth of the business. One of them is to go public, if we finally decide it would be in the alternative stock market of Madrid, BME Growth. We also have the opportunity to finance ourselves via a private equity investment fund, we had a French fund, MBO & Co, which had a 30% stake in the firm. A month and a half ago we reached an agreement to buy their share, this gives us more independence and freedom when deciding which option we like the most. We are waiting to see if we opt for the stock market, which we really like the idea, or if we go for the option of replacing our private equity.
E: How to choose the best option to obtain capital?
JAL: For us there are three main decision foci: valuation, flexibility in the use of resources and independence for key decision making. It is important to see how the different alternatives we have value us, in addition to flexibility, that is, we need a formula for access to capital that allows us to have it. We are a firm of professional partners capable of directing the business strategy and decisively participating in the key issues that affect the future. Then, the formula that gives us more freedom and decision-making capacity is going to appeal to us the most. In the end, whatever the form of financing, our path is to duplicate the business and do it in a very short period of time.
E: Why choose an acquisition strategy to grow?
JAL: A consulting business like ours must grow in two ways, organically and inorganically. The first is fundamental, you need to have a business that grows healthily on a basis of good customer service: they are satisfied, they recommend you and the opportunities grow. The second way is to do it through acquisitions for almost six years, together with the investment fund, they did not help in this process. We have bought six or seven companies. Today, what we are doing is considering larger and more relevant companies.
E: Does this respond to a global trend of business concentration?
JAL: The communication consulting sector is a very fragmented sector, there are many possibilities and there is a clear trend towards a certain concentration. The world we face does not only need good professionals, but companies that are up to date, that is why we wanted to expand our offer of solutions and services by adding digital marketing, paid media, digital performance, data analytics and artificial intelligence. The market demands the concentration of businesses to make teams stronger, more versatile and with a wider range of solutions. I believe that we are going to a process in which companies have to gain in size to have a critical mass that allows them to perform well in the market.
E: Are there plans to acquire companies in Mexico and Latin America?
JAL: I hope soon to give good news of that type and that some of the acquisitions will be in Mexico. This type of deals does not depend only on us, it is like a marriage and you need another. There are possibilities, conversations and I hope to announce soon in Mexico, we have ambitious plans, we understand the difficulties, but proximity with the United States has advantages. Mexico must, can and knows how to take advantage of them, the North American recovery will be positive for the country.
E: What are the business objectives that you seek to achieve in Mexico?
JAL: The growth potential is exponential. For the last two or three years we have been the number one company in the country in the industry. It is a market with many possibilities, we want to be a company seven times bigger than we are now. That is the potential we see. With the intelligence, the right people and the investments we aspire to be in a short time a company that is three times larger than today. We have no competitors that are twice us.
