Fishwick: 'We want to add rocket fuel to businesses'

By Rebecca Weller

- Last updated on GMT

Rocket fuel: Andrew Fishwick tells MA Leaders attendees why he started acquisition and investment vehicle Hestia
Rocket fuel: Andrew Fishwick tells MA Leaders attendees why he started acquisition and investment vehicle Hestia

Related tags MA Leaders Finance Property

Andrew Fishwick wants to add “rocket fuel” to firms and champion the sector amid falling confidence from shareholders with new acquisition and investment vehicle, Hestia PLC.

Speaking at the MA Leaders​ conference in Cardiff on Thursday 16 May the CEO described himself a “true addict” for the industry and shared plans to grow Hestia to a £100m business in three years.

In February 2023, after successfully running various groups within the sector, Fishwick founded Hestia PLC following discussions with friends working in the industry and the investment difficulties firms were facing coming out of Covid.

He said: “Everyone had to take loans to survive, everyone’s balance sheets were knackered, everyone themselves was knacked.

“But there was a common theme of shareholder fatigue, which meant businesses that had been bought by private equity firms or taken investment in between 2018 and 2020 were owned by people who had held it for much longer than they wanted”, he said.

The CEO added private equity doesn’t do “terribly well” in hospitality as those firms can’t cope with holding businesses of this nature for three or four years.

He continued: “I was helping people who had survived lockdown and some of them were really thriving but had shareholders that didn’t want to put any more money in and wanted rid of these businesses.

Pent-up possibility 

“They weren’t distressed businesses, but they were going to be available for sale.

“When you combine that with the fact there had been no M&A in our sector at all for three years because of Covid, I thought there was going to be a lot of pent-up possibility and so we invented Hestia to take advantage of that and be ready to acquire businesses and help them grow.”

Fishwick explained he spent time building a “great board of people” to form Hestia PLC, including Sainsbury’s former CEO Justin King, who he described as a “great sounding board”.

However, the pair soon faced obstacles with taking the idea to public markets.

“We tried to do this as a public listed company, but we were up against it, the UK public markets weren’t quite there and were dormant really, [which is why we have PLC at the end of our name].

“The banks and everyone understood the plan and why now and why us but we couldn’t get it away publicly and so at the end of last year we decided to pivot slightly and raise the money privately, which we did about 12 weeks ago.

“We have done that through a collection of family offices who understood the back of the envelope plan that now is a great time to go and acquire great hospitality businesses”, he detailed.

In addition, Fishwick told delegates Hestia has committed funds to draw from on a “deal-by-deal basis”, adding there was “so much opportunity” in the market and that if the company can get the first few deals right there could be more money behind the idea.

“Most of the battle is selling investors as to why it is a good idea, it is always an uphill struggle.”

Though the CEO urged Hestia PLC was not looking for “distressed purchases” but rather to totally or majoritively acquire and invest in premium established groups with five or six sites.

He continued: “The first few we are looking at are places that are the opposite of distressed, they are doing really well, they just have people who have lost their shareholder confidence in them.

“We are looking to back great management teams who are ready to grow and we keep saying we put rocket fuel in things, that’s what we are trying to do.

“We are trying to find businesses that are right for growth, I don’t mean from a private equity let’s get to 300 sites regards, I am good at taking something from 5 sites to 20 sites, that stage of growth is where Hestia can add value to businesses.”

Fishwick also spoke positively about the opportunities within the sector, despite doubts from shareholders, adding the premium space has always been “more resilient”.

“It was the first to bounce back, weather it is premium pubs or restaurants it has been more resilient, they have more capital and can absorb more costs [amid the cost-of-living crisis].

“To take the positives from that, there’s not a lot of people playing in that pond and it means there is a lot of opportunity.

“If you get the right people in the room and they do understand and they do see that our sector is full of genuinely incredible management teams and with those come the opportunity for growth”, he said.

Though while the industry stalwart explained finding the right people and sites were “not a challenge”, convincing others the industry is a great investment opportunity was often more difficult.

Uphill struggle 

He added: “When people understand that market opportunity it starts to get exciting.

“But it’s not easy, 90% of the investment meetings are very short because people hear hospitality and say no.

“Most of the battle is selling investors as to why it is a good idea, it is always an uphill struggle.”

However, Fishwick urged his vision for Hestia was to ensure the brands it acquires and work with retain their personality but wanted to advise on the “nuts and bolts” of the business.

“I want all the brands we acquire and work with to be utterly independent and have their own autonomy and purchasing and all the bits that make them and their personality unique.

“But I want to provide consolidated services such as HR, finance, legal, property and all those sorts of things, which are the same across the board.

“Proving we can integrate that and not detract from the innate quality of what we buy and why is going to be tricky bit, I have got to make sure to steer a careful path."

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