Stephen Halliday: Scaling a global business
- Date Published
- Stephen Halliday joined SEP’s Advisory Board in 2019, bringing a wealth of experience in scaling a global business and working with private equity investors
- He worked for energy giants BP and TOTAL but spent most of his career at research and consultancy business Wood Mackenzie, becoming Chief Executive in 2007
- He helped grow WoodMac from an Edinburgh base into a world class data and analytics business with over 30 offices globally, serving the energy, chemicals, metals and mining industries
- He co-led a £25 million management buyout in 2001 and built value through a succession of private equity owners until Verisk Analytics acquired WoodMac for £1.85 billion in 2015
- Stephen holds several non-executive roles, including chairman of data and analysis company Aistemos
Two things are abundantly clear from the curriculum vitae of SEP Advisory Board member Stephen Halliday: firstly, he thrives on change and challenge. Secondly, he is passionate about growing businesses.
Not only did he help build Wood Mackenzie (WoodMac) into a world class data and analytics company, along with the management team, he steered it through five changes in ownership, rapid international expansion and a significant increase in value.
Adept at deal making and managing relations with private equity owners, he was Chief Executive at WoodMac in 2015 when a deal was struck to sell the business to US trade buyer Verisk Analytics, securing a £1.85 billion exit.
Why did he join SEP’s Advisory Board? “There’s nothing more fun than doing a deal. I wanted to make a difference and to work with dealmakers and entrepreneurs building world class businesses,” says Stephen.
He adds: “SEP has a great likeability factor and warmth. They’ve also got strong values and sufficient edge and bite to give companies confidence they can help them achieve a fast growth future.”
Growth is a recurrent theme. Having initially joined WoodMac as an analyst in 1989, he rose up the ranks to execute an ambitious plan that transformed WoodMac from a consultancy with a single base in Edinburgh into a data and analytics business with offices in more than 30 countries. He also expanded its services from primarily oil and gas to include the chemicals, metals and mining and renewables industries
Stephen was Chief Executive of WoodMac from 2007 to 2016, a promotion from Head of Energy where he acted as “wingman” to Paul Gregory, his predecessor as CEO. The duo masterminded a £25 million management buyout from Deutsche Bank in 2001 which was the first bold step towards building a global business with an eventual price tag approaching £2 billion.
After the business was sold to Verisk in 2015, Stephen stayed on as CEO of WoodMac and then as a Group President of Verisk, doing mentoring and mergers and acquisitions work before leaving the group in 2019 to pursue a non-executive career. Having led WoodMac through a decade of ownership by a succession of private equity firms he is experienced in managing investor/portfolio company relationships.
“It starts with people being wary then hopefully they realise their new partners are good people with a shared goal. We treated our private equity owners like clients – and when we met owners of companies we wanted to acquire, we treated them like clients too. The key is to have high levels of communication and no surprises. Respect is critical.”
He says big private equity firms tend to have larger operational teams offering portfolio companies a raft of services but cautions: “They can go too far down that route and get in the way of management teams. The worst thing a private equity firm can do is drive growth in a short term way. They need to trust the management team to get on with it.”
He says relationships can be impacted by whether the investor has a majority or minority stake and also by cultural values. “The culture of a company is so important. Values must be respected and protected.”
He adds that SEP, which typically takes minority stakes in portfolio companies, adopts a long-term relationship-building approach based on knowledge, experience and trust. What does SEP look for when reviewing investment proposals? “Momentum is critical – and a management team with appetite, imagination and energy.”
He says it is increasingly hard for investors to stand out in a fiercely competitive hunt for deals, with access to capital a given. “For companies choosing potential investors it comes down to three questions: Can an investor genuinely add value? Who can we trust? Who do we want to do business with?” He says it is vital for companies to have confidence in an investor’s ability to help them expand globally.
He sees opportunities for innovative companies to prosper despite the negative effects of Covid 19 on the global economy. He says “Disrupters can take advantage of an acceleration in digital transformation, with leaders in B2B data analysis among the vanguard.”
What advice can he offer to companies embarking on a globalisation journey? Firstly, companies must get the pace right. Moving too quickly can result in growth but not profitable growth. However, moving too slowly can result in missed opportunities.
He also advises identifying building blocks to scale analytical products. For example, he recommends that when developing new or incremental products, companies undertake analysis to identify overlaps between concepts, categories and groups. “New products should play off your strengths – and never try a double box move – a new client set or geography with a new product at the same time.”
Another vital consideration is: Who will put the key in door for you in important markets? “Our view was to send an existing and trusted member of the commercial team in first. They can then build relationships and recommend next steps. There are different sales channel options of course – but we preferred to control the sales process with the WoodMac team selling directly. We could have appointed agents to sell for us, but that approach is more appropriate for commoditised than tailored products or services.”
Concluding, the former CEO says constant horizon scanning for new opportunities is as vital for entrepreneurs seeking international growth via partnerships or acquisitions as it is for investors seeking entrepreneurial businesses. “You need to spot opportunities early, build relationships, seek to avoid competitive processes and look to do exclusive deals where possible.”