Welcome to Upper Market

Each week, I bequeath one business listing to you.

No promises that it’s a slam dunk, but I give you my take and why I like it.

The email always gets shipped - no matter where I am.

P.S - Happy King’s Birthday

What’s ahead in this Newsletter:

If there’s any trait that’s “most common” across all successful acquirers (and good business operators), it’s high agency.

High agency is the ability (and belief) to actively shape your circumstances and achieve your goals, rather than waiting for perfect conditions.

It means taking ownership of your outcomes, viewing obstacles as puzzles to solve, and acting decisively with a strong internal locus of control.

Here’s a short from a Modern Wisdom Podcast to help paint the picture

A person of high agency just figures it out. They’re knowingly walking into novel scenarios - probably frequently - and just finding a way through them.

Much is the same in the acquisition world - and certainly the same in business.

At any point you can receive news (good or bad) that ultimately changes your business or environment you operate in. It can take correct decisions you’ve made with all available information at the time and make a sick joke out of them.

A person of high agency doesn’t need to love chaos, they just need the ability to navigate through it.

Not everyone starts off with high agency. The good news, is that it’s something I know people can develop through exposure.

Each new step you take into an unfamiliar environment flexes this “muscle”.

Most people I’ve spoken to who are on the edge of stepping into business ownership mention the same thing - they lack the confidence in taking the next step, because they “don’t know what they don’t know”.

The truth about the journey is that you learn it along the way, while you collect information about each step - as you need it.

My hope, is that you’ve been stockpiling what I’ve been writing and sharing with you to help make each step a little bit easier, while you build the confidence to trust that you can figure it out

And that you’re resourceful enough to problem solve whatever uncertainties lie ahead of you.

50% market share of NZ pie wrap packaging. Let that sit for a moment.

Every second pie that gets wrapped in this country goes through this business. Find me a person in the country who hasn’t touched something that’s come from this factory.

$6m+ in annualised revenue. Fully managed. Financials ready. A 3,000m² purpose-built facility with room to grow. This is a mature, cash-generating operation that doesn't need its owner to function.

Based on what it’s working with: film, foil, paper, cello bag production, laminating, embossing - this isn't a single-trick packaging shop. It's a customised manufacturer with the ability to work across multiple formats. That breadth is what keeps blue-chip food manufacturers from shopping elsewhere.

The implied EBITDA yield of 27.5% at a $3.6m asking price tells you what you're actually buying here almost $1,000,000 of earnings

What I'd Want to Understand:

First is customer concentration. As always - what’s the split? Blue-chip is a good word. Recurring is a better one. But how many customers make up the bulk of that $6m? If two or three relationships carry the majority of the revenue, that's the first conversation to have.

Second is the GM dependency. Fully managed is only as good as the person managing it and how they’re remunerated & performance measured. I'd want to understand the structure beneath them and what the business looks like if the business were to lose them

Third is raw material supply. A packaging manufacturer is only as stable as its input chain. Film, foil and paper substrates sourced from offshore suppliers carry currency risk, lead time risk and concentration risk if key supplier relationships sit with the outgoing owner. Are these on shore? I'd want to understand who supplies what, on what terms, and how exposed the margins are to input cost movements. Do we have back up options?

Fourth is equipment age and capex. Manufacturing businesses live and die by their machinery. What's the condition, who services the equipment, what's the replacement schedule, and does the yield number still hold after you factor that in.

Growth Angle: The acquirer fit is obvious - a packaging group bolting this onto existing infrastructure, or a food manufacturer pulling its supply chain in-house. Either way, the 50% market share becomes a foundation. What other targets can we expect within the industry or close to it?

The Drawbacks: This is a manufacturing business. This means we’re exposed to challenges in the labour force, equipment downtime and potentially the expected pains on the cashflow cycle in the industry. All things to check before we head deeper.

Final Thought: Dominant market position, fully managed, essential sector, recurring revenue. The bones here are strong. The due diligence question isn't whether this is a good business, it's how certain we are that we aren’t missing something glaringly obvious with this business.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.

Dentistry is an industry that rewards… patients...

Build the reputation, fill the chairs, recruit and retain high quality dentists, keep the patients coming back. This one has done that.

$1.7m in revenue. $550k in Seller's Discretionary Earnings. Six chairs. Booked six weeks in advance. Established 2017.

What stands out here is the breadth of the clinical offering. General, cosmetic, paediatric, orthodontic and implant. Most small practices live and die by general dentistry. When you can capture a patient across multiple service lines over the course of their life, the economics change. High customer lifetime value.

The six-week forward booking is the most important number in this listing. It tells you demand isn't manufactured. It also tells you there's a ceiling that hasn't been addressed yet. There’s upside waiting to be unlocked.

What I'd Want to Understand:

First is the revenue split across service lines. Implants and cosmetic carry very different margins to general dentistry. I want to know where the money is actually coming from and how much we keep.

Second is clinician dependency. How much of the $550k walks out the door if the principal dentist leaves on day one? We should also model what could happen if one of the other clinicians were to leave. The two-year transition offer is encouraging, but I'd want to understand what the patient relationships actually look like.

And as an aside, why are they happy to stay on and work for 2 years?

Third is the under-utilised room. A non-clinical space in a six-chair fit-out is either an easy win or a landlord's problem. I'd want to understand what it takes to convert it and what it adds to capacity.

Fourth is the freehold option. Owning the real estate removes your biggest long-term lease risk and adds diversity to the asset base you’re acquiring.

Growth Angle: How realistic is it to find an extra clinician. , extend hours, convert the spare room. The chair capacity is already there. You're not building the infrastructure — you're filling it.

The Drawbacks: This is a regulated, clinician-dependent business. If you're not a practising dentist, you're buying something you can't run yourself. The acquirer pool is narrower than most deals, which also means the resale market is narrower. You need to go in knowing that.

Final Thought: A fully booked, multi-discipline practice with decent earnings, a willing vendor and a freehold option on the table is a decent asset. The real work here is understanding how much of the value sits with the business, and how much belongs to the person currently running it.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.