Making a merger

Photograph by Josh Robenstone

MAKING A MERGER

Pulling off a big deal is one of the biggest stresses in business. Entrepreneur Gillian Franklin explains how her relationship with PwC partner Chelsie Harris helped seal the deal.

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ENTREPRENEUR:

Gillian Franklin
Heat Group Managing Director

“My philosophy has always been that nothing is more important than the quality of the people around you – your staff, shareholders and external experts. Never compromise.

PwC have been our auditors for many years, but my M&A partner Chelsie Harris and I have formed a real partnership over the past few years. Chelsie has worked with me on two major projects including one large acquisition, 96-year-old distribution company Doward International. PwC did the due diligence for us but added much more value than just DD. Specifically Chelsie’s expertise, from the countless deals she has worked on to different insights and ideas on how to structure the deal, what to focus on and some key watch-outs.

One of the key learnings for me was to not assume that everyone on the deal thinks the same way as you do in terms of how the business would be handed over. The expectation of what we thought we would achieve from day one of owning the business was not met, and it’s been challenging for us because of that. One piece of advice I would offer to anyone is that part of your final due diligence process should include looking at what state the business will be in when it is handed over, and to have some key measurements that you investigate and confirm in the final days.

Heat Group, which distributes and develops some of the world’s leading brands, has enjoyed success over 17 years in business. With the acquisition of Doward, this has been a challenging year but we are now looking forward to unleashing the potential. The goal is to prepare for exit options in the next four to five years, where the shareholders will be in a position to decide on the next big step for the company – either sold, merged, or even potentially an initial public offering – and I look forward to working with PwC during this exciting time.

I am a real advocate for women in business and for working mothers, so when Chelsie shared with me that her next step was to be considered as a partner, I encouraged her to go for it. We spent some time talking about what that would look like and I was a referee for her. One of the key things raised was that she has two young children and doesn’t work on a Friday, and I knew it would come up in the discussions about her being a partner. It was important for me that I communicated very clearly that this in no way detracted from the quality of the work she did, her availability or our respect for her.

Of course, mothers working flexibly can be partners in consulting firms. In the middle of a deal Fridays were often key, but we were always able to communicate and scheduled times Chelsie could be available. On occasion, if I could hear the kids in the background, I asked her to mute the phone which was absolutely nothing. We had many, many late nights and weekend work through the months of the deal and Chelsie was always with us in meetings, either remotely or in person.

Working clients can be very happy if you have real respect and understanding of the parameters. Women in general, I think, are far too humble. At 24, I was running a division of Revlon and I secured that role because I made myself noticed. I think there is a misconception that you have to display masculine qualities in order to get ahead. My advice is always to make your mark in your own way, always treat yourself as a brand and always be true to what you believe in.”
Chelsie Harris
Retail Advisory Partner, Private Clients,
PwC Australia

“I’ve worked with Gillian and Heat Group for the past four years, assisting with deal-related strategic ideas and financial due diligence for potential acquisitions.

What has set PwC apart is our strong understanding of the retail and consumer sector, assisted by my time working in London for PwC and a large luxury retailer. Being able to talk the same language with Gillian and being able to talk operationally about the business and not just about the financial metrics really helped.

We also have a dedicated Private Clients practice, where we have developed a strong understanding of how to operate with business owners, family businesses and entrepreneurs in a way that is different to our competitors.

What I love the most is that as I have built strong relationships with Gillian and her other advisers, we could really go into battle together. The breadth and depth of our one-firm offering also allowed us to bring in different specialists for each part of the deal. I know this is valued among our clients as it makes the work almost seamless.

What I learnt from this process was the importance of working closely with the founder of the business. I always try to stay one step ahead of her, but with Gillian it’s very hard as she is an incredible businesswoman. I was fortunate to have such a good team around me.

Getting close to her and close to the issues that really matter to her delivered a better result as you go beyond just the transaction to help contribute to an even better outcome. That’s what makes me tick.

I love that Gillian and I have a friendship now as well as a professional relationship. And those relationships need to be fostered because, for private clients, their business is their baby. It’s a very different relationship and no different with the Heat Group – Gillian has quickly grown this business from zero to $130 million and I am trusted by her to help grow the business further. Gillian’s a really inspiring businesswoman who has been a real mentor – even if she didn’t really know it – and set the bar for her resilience and compassion. I’m also in awe of her focus on family. She is so respectful and supportive of me as a working parent. She prioritises her family and her three daughters and empowered me to do the same. That role-modelling was crucial as I made that transition to partner. I could really see that it was possible to have a successful career and a successful family life at the same time. Gillian’s values have really helped me think about how I manage my own team. This is more than just being a client and service provider, it really works both ways.”

My philosophy has always been that nothing is more important than the quality of the people around you – your staff, shareholders and external experts. Never compromise.

Gillian Franklin

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