Interview with Chris Horan, CEO of Relay, a fire and life safety company, conducted by Paul Giannamore at NFPA 2024 in Orlando. Horan discusses his transition from Wall Street investment banking to the fire protection industry and his approach to building a service-centric business. Topics include the importance of service and recurring revenue, strategies for acquisitions and integration, evaluating acquisition targets, industry fragmentation and the competitive landscape, the role of private equity, equity rolling for owners joining Relay, apprentice programs to address labor challenges, and compliance and regulation as drivers of business growth, along with advice for small business owners on building value. # Channel Identity Observations: POMAC TV Video (01a168c8) ## Explicit Self-Description (Creator Claims) - **Channel name and host**: The host introduces himself: *"hi I'm Paul jamore"* and refers to the channel as **"pomac TV" / "patomic TV"** (spelling varies in the transcript). - **Stated historical focus**: *"historically pomac TV has been focused on business and operational information and interviews for residential and Commercial Services business owners."* - **Stated content expansion**: Following *"the cell site m&a master class last month,"* the host says *"my LinkedIn inbox has been inundated with a variety of different requests,"* so *"Dylan and I will be sitting down filming more extensive m&a master classes both focusing on the cell side as well as the buy side."* Planned topics include: - *"the choice of process"* - *"delving deep into m&a psychology"* - *"extensive by side practice approach and due diligence"* - **Claimed viewer-driven model**: *"this channel is largely driven by you the viewer and what you want to see from us."* ## Observable Presentation (Demonstrated Patterns) - **Format**: One-on-one interview with a named guest, **Chris Horan, CEO of Relay Fire and Safety**, conducted at what appears to be an industry event (Horan references *"the floor of the NFP"*). - **Interview style**: Host asks structured, well-informed questions about M&A, e.g., *"how important will Acquisitions be as part of your strategy as CEO,"* *"what makes that business attractive to you,"* *"what percentage of Revenue do you like to see recurring."* - **Demonstrated audience**: Questions are pitched at an operator/owner/investor level — the closing segment is explicitly advisory to business owners: *"when you think about like the family fire protection business out there doing or10 million in Revenue… what sort of advice could you give owners."* - **Demonstrated scope**: Fires/life safety sector within the broader "residential and Commercial Services" space, with emphasis on private equity, roll-ups, valuation (EBITDA multiples), and exit strategy. ## Call-to-Action Elements Observed - Subscribe prompt: *"for those of you who have not subscribed you can click below and subscribe to the channel."* - Email list: *"we've provided a link here in the description where you can get on our email distribution list."* - Engagement request: *"feel free to put a comment below on the types of things you want to see."* ## Audience and Scope Summary | Dimension | Evidence | |---|---| | **Intended audience** | Owners and operators of residential/commercial service businesses; M&A-interested sellers and buyers | | **Claimed scope** | Business/operational interviews; expanding into M&A "master class" educational series | | **Demonstrated scope** | Executive interviews on PE-backed growth, acquisition criteria, and value-building in fire & life safety | | **Tone** | Professional, conversational, advisory ("brother" greeting suggests informal rapport between host and guest) | *Note: No curated metadata was supplied; all observations derive from title and transcript only.* # Delivery Observation: "From Wall Street to Fire Safety – Chris Horan's Strategy for Service Centric Growth" ## Speakers & Format - Two distinct delivery modes appear: **Paul Giannone** (host, with an intro segment and direct questions) and **Chris Horan** (guest, CEO of Relay Fire & Safety), in a Q&A interview format. - The transcript opens and closes with what appears to be a **promotional segment** from the host ("hi I'm Paul jamore I wanted to welcome our new subscribers to the channel"), indicating a channel-intro insert around the interview. ## Tone - **Conversational and informal** throughout — e.g., the guest's greeting: "thanks Paul nice to see you," and the host's sign-off: "thank you very much brother." - The guest's tone is **promotional/advocacy-oriented** when describing his business: "we are uh very proud of the business that we bought we're very proud of uh the customers and and the colleagues." - The host uses a **casual, rapport-building register**, including slang like "cheers brother" mid-question and "you look at a lot of acquisition targets and God you've been involved." ## Vocabulary & Recurring Phrases - The guest repeats the phrase **"service side of the business"** many times (e.g., "make the investment in the sales uh in the back office and also on the service side of the business we really want to be a service Centric business"), plus the near-identical closing repetition of that block later in the video. - **"Fire and Life Safety"** (appearing in variations like "fire and light safety" in the transcript) is a stable anchor phrase: "Fire and Life Safety businesses," "the premier Fire and Life Safety Company in those three markets." - Recurring M&A vocabulary: "acquisition targets," "multiples," "quality of earnings," "EBITDA" (rendered "EA"/"ebit"), "private Equity," "vertical markets," "second bite of the Apple." ## Teaching / Explanatory Habits - **Frames career history chronologically**: "so my background I'll start from the beginning um I went to Cornell and had an economics degree…" - **Uses concrete numeric benchmarks** when explaining criteria: - "we're probably seeing the service side at least 60% but we're looking for a little bit higher than that" - "anywhere from you know 15% to 20%" (EBITDA margins) - "an owner will roll anywhere from 20 to 30% back into the business" - **Uses memorable analogies**: "it's like buying Amazon in 1996 versus buying Amazon in 200" (to explain early-stage equity rollover value). - **Gives structured "advice lists"** when asked what owners should focus on: "first I would I would I would focus on the service side of the business… I would really focus on expanding your your customer base… I would look at uh a lot of government contract business." - **Explains via career-path narrative** for the labor topic: "you can take somebody out of school at a high school and within 5 years… you can have that that person make about $100,000 a year." ## Communication Patterns - **Heavy filler and repetition**: frequent "um," "uh," and word repetition ("we we put a new technology stack in," "constantly constantly changing ideas," "a lot of a lot of a lot of internal knowledge"). - **Self-corrections and restarts**: "sure so I mean as a as as a cide um business that you have you you see a lot of it." - **Affirmation before answering**: the guest often opens with acknowledgment: "it's a good question," "sure," "yeah," "so it's a good question um as I mentioned." - The host **summarizes/reflects back** before follow-up questions: "so you're your your service footprint B it goes from New England down to Virginia correct." - **Repeated content block**: the opening answer about acquisitions vs. organic growth reappears nearly verbatim later ("it's extremely important but organic growth is always the main drive right so whenever we buy a business…"), suggesting either a recap edit or restated framing — uncertainty noted, as the cause is not observable from the transcript. ## Uncertainty Notes - Speaker attribution in a few spots is ambiguous (e.g., "the targets you see cheers brother a lot of the targets that you look at"); the crosstalk appears to come from the host but is not fully clear. - The transcript contains apparent transcription artifacts ("distributed tennis systems," "nightset certifications," "pomac TV," "patomic TV"), so exact wording of some phrases is uncertain. # Observation Document: From Wall Street to Fire Safety — Chris Horan's Strategy for Service-Centric Growth ## Participants - **Paul Jamore** — Host, POMAC TV (per transcript self-introduction) - **Chris Horan** — CEO, Relay Fire and Life Safety (per his statements in transcript) ## Purpose of Video Interview on Relay's growth strategy, acquisition approach, and private equity backing in the fire and life safety industry, filmed at the NFPA show floor. --- ## Chris Horan's Background (as stated by Horan) - Economics degree from Cornell; started on Wall Street - Worked at investment bank Alex Brown → Bankers Trust → Deutsche Bank; then Vice President at Merrill Lynch in New York City - After **9/11**, got interested in fire and life safety; joined **Tao** under Dennis Kazasi, ran commercial sales while Tao was acquiring fire/life safety companies in New York - Started the New York Fire Alarm Association in 2001; post-9/11, worked on code writing addressing communication failures in the Twin Towers, including **distributed antenna systems** - Joined **Convergent Technology** (2013 or 2016 — Horan stated both) with PE group KRG; ran the Northeast and did M&A - COO at **Unlimited Technology** - Became CEO of **Relay** in February 2022 ## Relay's Formation and Structure - Backed by **The Riverside Company**, which had prior fire/life safety success with PSI (West Coast) and Cerity (Midwest) - Acquisitions: American Service Company (Boston), Advanced Fire Protection Systems (Baltimore), Metro Fire (New York, December of "last year") - Three regions: **Mid-Atlantic** (Baltimore), **Northeast** (New York), **New England** (Boston/Quincy) - Geographic focus: **Virginia to Maine**; "pretty much not go any further south than Virginia" - ~**120 employees**, growing rapidly; finance centralized in New Jersey (CFO, controller, FP&A, HR, IT) - Service mix: Edwards dealer (Boston), sprinkler business (Baltimore), inspection business (New York); full range including fire detection, extinguishers, suppression, kitchen hoods, emergency lighting, fire doors - Target verticals: hospitals, housing authorities, school systems, hotels ## Growth Strategy Positions - **Acquisitions are "extremely important" but organic growth is "always the main drive"** - Post-acquisition investments: sales, back office, service; new vans, new technology stack, technician utilization metrics - Deliberately **moving away from large installation jobs**: installations carry risk because Relay works under general contractors and doesn't control outcome, payment, or margins - Will still do installations for existing customers (e.g., hospital wing, university dorm) but **"not interested"** in bidding new work to general contractors - Building service lines in each region — Baltimore clients want more fire detection; Boston clients want more sprinkler ## Labor and Apprenticeships - Labor shortage cited industry-wide; Relay set up an **apprentice program** recruiting from vocational schools - Career path claim: high school graduate can reach ~$100,000/year within 5 years with certifications (NICET, product certifications) and overtime — "very few industries you can say that" - Progression: inspections → service → programming ## Market and Competitive Landscape (Horan) - **Very fragmented**; many generational businesses (40–50 years old) with long-tenured employees - Heavy private equity presence; multiples rising; many owners seeking exit or financial partner - Many small companies plateau as "lifestyle businesses"; Relay positions itself as the investor adding branding, back-office centralization, and growth capital - **Low barrier to entry**: technicians routinely leave to start their own companies; expects continued M&A "for many years to come" - Business is **compliance/regulatory driven and "recession proof"** — inspections and fire alarm systems required regardless of economy; buildings can't get a CO without fire alarm ## Acquisition Criteria (Horan) - Prefer **service-heavy** targets, especially inspection business - Alignment with Edwards product line (detection) - Geographic presence; certified teams (NICET, Level IV, programming capability) - **Avoid customer concentration** — no heavy reliance on one vertical or one or two large customers; seek diversity across clients, verticals, geography - During quality of earnings, finds sellers often **overstate service revenue** — retrofit is often counted as service; true recurring revenue is inspections leading to deficiency reports → service/maintenance contracts - Typical targets: ~60% service side (looking for higher); **~50% truly recurring revenue** is "a really good target" - Target **EBITDA margins: 15–20%**; valuations based on multiples of EBITDA, not sales or recurring revenue ## Private Equity Discussion - Acknowledges Jamore's framing: PE is a ~5-year hold, creating pressure; Horan says **"I do like that"** — first 1.5 years were platform-building; now pursuing a **5-year exit plan**, likely to another financial partner - **Equity rollover encouraged (not mandatory)**: owners typically roll 20–30%, tax-free; "second bite of the apple" pitched as potentially as large as the first, especially given Relay's early stage - On Jamore's "Amazon in 1996 vs 2005" analogy: Horan says sellers 5 years ago wouldn't have understood early-stage equity value, but competitive environment now makes sellers receptive ## Riverside Diligence and Network (Horan) - Riverside has a **dedicated fire/life safety team**; operating partner on Relay's board also sits on PSI and Cerity boards - Claims "40 or 50+" acquisitions collectively across the three companies; shares best practices, same tech stack, and cross-refers acquisition opportunities with counterpart CEOs - Relay is in **fund six ($1.9B micro-cap fund)**; the other portfolio companies in predecessor funds (four and five) — Jamore notes this implies they'll exit first; Horan confirms ## Advice to Family Business Owners (Horan) - Focus on service; move away from installation - Build inspection, testing, and maintenance - Diversify customers and vertical markets; avoid concentration - Pursue government contract business with set rates rather than bid work - Target 60–70% of revenue from service; 15–20% EBITDA margins - Acknowledged tension (raised by Jamore): installation brings "big chunky money" and often *generates* the service business — Horan calls it a **"double-edged sword"**: mature businesses should convert installation customers into recurring service relationships ## Unresolved / Contradictory Points Preserved - Horan stated Convergent Technology start as both "2016" and "2013" in the same sentence - Recurring revenue framing is inconsistent: 60%+ cited as "service side," while "real recurring revenue" near 50% is called a good target — the definitions remain distinct in his telling - Installation is simultaneously framed as undesirable yet retained ("we're always going to have installation") for customer needs # Speaker Attribution & Provenance Record ## Video Metadata - **Title:** From Wall Street to Fire Safety Chris Horan's Strategy for Service Centric Growth - **Video ID:** `01a168c8-31fb-7b82-9d2d-834f824fa155` - **No curated metadata was supplied**; all identifications below derive from the transcript. ## Speakers & Roles ### 1. Paul Jamore — **Host / Channel Creator (Pomac TV)** - Self-identifies: > "hi I'm Paul jamore I wanted to welcome our new subscribers to the channel" - Conducts the interview; frames all questions about M&A strategy, private equity, and owner advice. - Refers to channel as "patomic TV" / "Pomac TV" (transcription variants). ### 2. Chris Horan — **Guest / Interviewee (CEO of Relay Fire & Life Safety)** - Confirmed by title and content; states he became CEO of Relay in February 2022. - Provides all substantive claims about his career and Relay's operations. ## Identified Third Parties / Entities Cited (by the Guest) - **Employers past:** Alex Brown → Bankers Trust → Deutsche Bank; Merrill Lynch (VP); TA ("Tao") under Dennis Kazasi; Convergent Technology (with PE group KRG); Unlimited Technology (COO). - **Current backer:** The Riverside Company (private equity), identified as Relay's owner/sponsor. - **Riverside portfolio peers cited:** PSI (West Coast), Certeit/"cerite" (Midwest). - **Acquired companies cited:** American Service Company (Boston), Advanced Fire Protection Systems (Baltimore), Metro Fire (New York). - **Product/regulatory references:** Edwards dealer (detection products), NICET certifications, NFPA (interview appears conducted on an NFPA show floor). ## Promotional Segments — **Flagged** - **Channel promotion mid-transcript** (Paul Jamore): subscription request, LinkedIn-driven M&A "master class" content, email distribution list sign-up via description link, and viewer comment solicitation. - **Implicit company promotion:** the guest's equity-rollover pitch ("second bite of the Apple", 20–30% rollover, "buying Amazon in 1996" framing advanced by the host) functions as promotional content for Relay/Riverside as an acquirer. ## Comment Availability - **Comments explicitly solicited:** host invites viewers to "put a comment below" on desired content. Whether comments are enabled cannot be confirmed from the transcript alone. ## Uncertainty Notes - Speaker names reflect transcript spellings ("jamore", "patomic/pomac") and may contain transcription errors. - Some entity names are garbled in the transcript ("Tao" likely TA; "cerite" unverified; "krg" likely KRG Capital). - No timestamps were available in the source. your background is very deal heavy right and so how important will Acquisitions be as part of your strategy as CEO to grow this business in the coming years it's extremely important but organic growth is always the main drive right so whenever we buy a business we're looking to make the investment in the sales uh in the back office and also on the service side of the business we really want to be a service Centric business um and uh with that said you know we're making improvements for those businesses um you know we're buying new Vans we're buying we we put a new technology stack in um which uh really helps us maintain the service business we look at metrics and we look at where we can make improvements to be better utilized with our technicians and really better geographically service the clients hi I'm Paul jamore I wanted to welcome our new subscribers to the channel you know historically pomac TV has been focused on business and operational information and interviews for residential and Commercial Services business owners but after the publication of the cell site m&a master class last month my LinkedIn inbox has been inundated with a variety of different requests so Dylan and I will be sitting down filming more extensive m&a master classes both focusing on the cell side as well as the buy side I intend to talk about the choice of process delving deep into m&a psychology uh as well as extensive by side practice approach and due diligence for those of you who have not subscribed you can click below and subscribe to the channel furthermore we've provided a link here in the description where you can get on our email distribution list and if you do that you'll receive an email right in your inbox with our latest Publications feel free to put a comment below on the types of things you want to see I mean this channel is largely driven by you the viewer and what you want to see from us again thanks for joining us here at patomic TV Chris it's great to have you here thanks Paul nice to see you so you recently took on the position of CEO over at relay but what were you doing before that so my background I'll start from the beginning um I went to Cornell and had an economics degree and started off actually on Wall Street so I worked for an investment banking company called Alex Brown which then became Banker's trust and then Deutsche Bank and then I was a vice president at Marl Lynch in New York city so after 9/11 happened um I really got interested in the fin Life Safety business and uh had some friends in the business and took a position at Tao uh working under Dennis kazasi when Tao was buying a lot of companies in Fire and Life Safety in New York and I ran commercial sales there and then uh started the New York fire alarm Association in 2001 um and from there we started helping write codes during 911 you know a lot of uh the issues in in the Twin Towers was the communication so we started looking at different codes and came up with distributed tennis systems and and really communication started to become a big part of fire and light safety um which I got very involved in uh from there uh I got into a company called convergent technology so that was in 2016 or 2013 with the private Equity Group um krg when they came in and I went and ran the Northeast and did a lot of m&a for them um and then we had a couple of exits and then from there got into another uh company called Unlimited Technology where was a chief operating officer off sir in this in February of uh 2022 I became the CEO of relay and basically I joined with the Riverside Company the Riverside Company is a private Equity Group that had a lot of success in Fire and La safety uh with a company on the west coast called PSI and a company in the midwest called cerite uh they wanted to replicate that success on the East Coast so what we did was they bought a company in Boston called American Service Company then I came in as a CEO then we bought a company in Baltimore called Advanced Fire Protection systems and then in December of last year we bought Metro Fire in New York so basically what we did is we created three regions a Mid-Atlantic region based out of Baltimore a Northeast region based out of New York and a New England region based out of uh Boston and Quincy um with the full intention of growing that business between Virginia and Maine uh it's kind of staying within that geographical territory and our business is mostly a service based business um we are an Edwards dealer a million dooll Edwards dealer in Boston we're a big sprinkler business in uh Baltimore and in New York we're an inspection business so we kind of cover a lot of the gamut of the fire light safety where we do sprinkler we do fire detection we do fire extinguisher suppression kitchen hoods fire extinguisher emergency lighting fire doors so we're kind of like taking a holistic approach and go after um a lot of vertical markets that have a lot of needs for fire and light safety so a lot of hospitals a lot of housing authorities a lot of school systems a lot of hotels um and we're going the business from here so we have uh stabilized our finance department and we centralized that in New Jersey um so we have a CFO a controller an fpna accountants there HR manager uh IT director who's sitting over there Ethan uh and uh and really we're build up to scale so we have quite a bit of acquisition targets right now that we're looking at and again between between Virginia and Maine so you're your your service footprint B it goes from New England down to Virginia correct yeah we W pretty much not go any further south than Virginia okay and and and currently you've got those three distinct business those platforms essentially in different areas um have you harmonized Services across those or are those firms still kind of doing different things so it's a good question um as I mentioned we're mostly a fire detection company up in Boston and a sprinkler company in Baltimore but in Baltimore our sprinkler uh clients want us to do more fire detection and in Boston our fire detection clients want us to do more spr sprinkler and other services so we're what we're doing is we're building the product lines and the service lines in each area and each area comes with a lot of different expertise right it's all compliant driven and Regulatory driven but we do need to hire around those special line items to to be successful and that's what we're doing so we're building in each area um you know we're expanding our product lines and our services so this is still a relatively young business how big is the team now right now we're about 120 employees um and again we're growing pretty rapidly right now so to support the business that we have and it's more of a service model than an installation model so we're continuing to hire people um in all different trades but also what we're doing is we set up an apprentice program so it's very hard to get labor right now everyone is uh having an issue with labor so we're doing a very good job at starting people right out of college and I always help people in the fire andl safety business it's one of the only industries that you can take somebody out of school at a high school and within 5 years if you get them the right certifications the right development um you get them uh product certifications nightset certifications they work some overtime you know in 5 years you can have that that person make about $100,000 a year or more and very few Industries you can say that you can do that so we have Apprentice programs where we're taking kids out of vocational schools and we're training them up we start them up in inspections we do a lot of inspection test and maintenance start in inspections then we go to service and then uh we go from there to programming and what's the what's the competitive landscape look like in your geog graphy is it pretty dominated by small players it's a very fragmented business um there's a lot of generational businesses in our industry so we see companies that have been in business for 40 50 years that have a lot of employees that have a lot long-term length of service um and we have to be very cognizant of that so we are uh in a very competitive environment there's a lot of private Equity that is in our industry um so we see multiples going up and we see a lot of uh a lot of companies that uh are looking to uh to exit or to be part or have a financial partner to grow a lot of these companies get to a certain level or a certain point where they just don't grow geographically or they don't grow uh they make don't make investments anymore um it's more of a lifestyle business so then we come in and when we look to make Acquisitions we uh invest around those businesses where we can put extra money into the business where we do that development we do The Branding uh and we help centralize a lot of the back office stuff and that really helps that build for Speed to uh for for expanded growth I mean your background is very deal heavy right and so how important will Acquisitions be as part of your strategy as CEO to grow this business in the coming years it's extremely important but organic growth is always the main drive right so whenever we buy a business we're looking to make the investment in the sales uh in the back office and also on the service side of the business we really want to be a service Centric business um and uh with that said you know we're making improvements for those businesses um you know we're buying new vans and we're buying we we put a new technology stack in um which uh really helps us maintain the service business we look at metrics and we look at where we can make improvements to be better utilized with our with our technicians and really better geographically service the clients when you go out and start thinking about making Acquisitions what in your mind you look at an acquisition Target let's say XYZ fire protection you know what are important things for you or what makes that business attractive to you versus something you would look at and say that's not attractive for whatever reasons so the main thing that we look at is what's the product mix and the service mix we definitely want to look at companies that are much more heavily on the service side of the business a lot of inspection business then we look at the product lines and the detection side as we're an Edwards dealer we look for companies that that maintain that product line um we're looking at geographical presence and then we look at the team that they have so we're looking at companies that have a lot of certifications like nice set certifications if they have nice at level four people um people that are certified to do programming on the detection side um and we look at really the geographical presence and and and the clients right we certainly don't want to look at customers that are very specifically heavy in a certain vertical Market or that have you know a concentration in one or two very large customers where there's risk of uh losing a customer and losing a big portion of the business so we look at divers diversity of the um of the clients of the portfolio of the vertical markets of the geography and then we look at the team that they have you know the targets you see cheers brother a lot of the targets that you look at what do you think is the breakdown between recurring service versus non what what's the typical mix you tend to see so it's a good question a lot of times we'll look at companies and we're doing quality of earnings and in that process we'll see that a lot of companies might State a lot higher on the service side than it really is we look at you retrofit business isn't necessarily service but other companies might think that it is so we really look at the inspection side of the business that's where you're going to see the service that's where you see you know you do the inspections you write the deficiency reports up you get the deficiencies and then you ultimately get the service and maintenance contract and develop longterm relationships with the customers I see and so on a on a target for example what percentage of Revenue do you like to see recurring is it 20% 50% 80 I mean obviously the more the best but I mean what's kind of a what's an appropriate level a majority of the business that we're seeing um we're probably seeing the service side at least 60% but we're looking for a little bit higher than that um and that's just service but then on the on the real recurring Revenue if you can get anything you know closer to that 50% Mark then uh that's a really good Target for us I see it appears that the the market it's getting more competitive now from an acquisition perspective as you know every time we turn around another Financial sponsor gets into this game and they're even buying you know the private Equity firms are moving Downstream now right like they're literally buying fire protection businesses as platforms that do 10 million in Revenue which was an absurd thought 5 years ago sure um what do you think that has that has done to the market Over The Last 5 Years sure so I mean as a as as a cide um business that you have you you see a lot of it we're we're looking at much higher multiples right now um based on IA based on a lot of those levers that I mentioned earlier um it's a very competitive environment um relay is one of several companies in our region that are out there looking proactively to to be Financial Partners of uh of Fire and Life Safety businesses but the reason why it's such an attractive business is because it's very compliance and Regulatory driven so we're looking at businesses that um are pretty Recession Proof whether whether the the economy is really good or really bad we're still going to have to have inspections and and maintenance and you're still going to have to have your fire alarm system you can't get a CO in a building without a fire alarm system so um we like the fact that it's going to be continually growing there's a lot of new technologies if you look around here on the floor of the NFP we're going to see a lot of new technologies um a lot of communication technologies that are out there so it's a growing business um you know it's not a stagnant business whatsoever what about from a geographic perspective as you continue to grow grow this business when you think about your acquisition strategy do you target specific geographies or are you just more opportunistic because you got to be where the actual seller is so to speak yeah so in our industry in our business for Relay uh we are primarily concentrated between as I mentioned the New England Mid-Atlantic and Northeast markets and we're going to kind of stay in that lane when we look at the business all as as a whole and we see all the businesses out there we probably have you know there's thousands of companies in the Fire and Life Safety business from small fire extinguisher inspection businesses to large fire detection companies so and that that's never going to change because you always see a technician from one company will go and start his own business there's a very there's a very small barrier to entry um you know you get your licenses and your certifications and you can be up and running pretty quickly um so we we don't see that the Market's going to going to slow down I think that there's going to be quite a bit of uh mergers and Acquisitions in this industry for many years to come you guys are in very early Innings now at relay the business was established you said February 22 is that we we the first acquisition was in uh December of 2021 or 2022 y okay so very very early Innings what does the future look like for you guys where are you taking that sure so the future for us is um to continue expand continue to make Acquisitions throughout the Mid-Atlantic the New England and then uh Northeast markets uh and really try to build that service aspect of the business we're really trying to build our inspection type of the business we're trying to build the service side where we're doing more maintenance and service contracts getting away from the large installation jobs where there's a lot of risk mostly in the Fire and Life Safety business when you're doing for instance a sprinkler installation we're normally under a general contractor or some kind of a contractor so um we don't really control the outcome we don't control getting paid right we don't control the margins as much as we do with the service side of the business and growing that obviously adds a lot of Enterprise Value to the end result so for us we're looking to build a much bigger service side business than we are on the installation side and really grow all the lines of services in each region so for midatlantic and for New York to build more fire detection more fire extinguisher for our boss in in that area New England to try to build more of the sprinkler more of the fire extinguisher side of the business and when we look at our acquisition market and market and our and our targets that's where we're going to start to see where we're looking at we're looking at companies that can really um add the value to what we've already created in these markets and with the companies that we acquired have already done so we are uh very proud of the business that we bought we're very proud of uh the customers and and the colleagues that we that we have and and really what we did is when we bought those three companies um from there we we rebranded it so we rebranded it to relay and we put a new technology stack in so we're really set up for tuck in Acquisitions um and really building a brand in a culture so that's really what we're trying to create now it's a big culture for Relay fire and safety to be you know the premier Fire and Life Safety Company in those three markets so from a strategic perspective you're going to shy away from growing the installation side of the business I would imagine you have to continue to do it but that's the installation side's not where you want to focus your efforts yeah we're always going to have installation we're always going to have our in-house design we're always going to be able to do that just because our customers want that and um you know we're not going to go after large new installation jobs we'll do installation jobs for customers that might be expanding for instance a hospital that's building another Wing or a college a university that has another dormatory going up and that in those situations where there are customer we will do some installations but in terms of actually going after brand new installations and bidding on work to General Contractors that's something that we're not interested in I want to talk to you a little bit about the private Equity model in general um you know most PE funds are 10-year Clos end limited Partnerships and so you're somewhat on the shot clock so to speak where you're involved in a private Equity backed business and you know I guess the average holding period is has been compressed in recent years just due to elevated asset prices but let's call it 5 years give or take does that put you under any sort of undo pressure to to to scale at a rapid Pace do you like that yeah I I do like that uh and sure there's a lot of pressure um when you look at the private Equity model typically um you're looking at a fiveyear hold right um so the first year and a half that we've had so far was really developing that platform putting the three companies together stabilizing those businesses rebranding it putting the technology sack in together and then now building that brand recognition in the marketplace we're able to start attracting acquisition targets we've proven that we can successfully integrate Acquisitions and we can successfully grow them organically once we put them into our into our holding company so um for us we're probably looking at like most companies a 5year return uh 5year um exit and typically what will happen at that stage is we will find another Financial partner and work with another private Equity company um you know but it's a 5-year plan does sellers have the ability you know if you find the right Target to buy if if I'm a seller would I have the opportunity to roll Equity into your business yeah that's a good question and uh we have a a very very successful track record of of success uh on exit so we encourage owners we don't it's not mandatory but we encourage owners and Founders to roll in equity typically uh an owner will roll anywhere from 20 to 30% back into the business it'll be a tax-free uh investment into the company and we call that the second bite of the Apple basically and a lot of times that second bite of the Apple could be as big as the first bite right especially for a company like relay where we're so early stage into our investment right now that any owner that would um roll back would get quite a bit of return uh at exit so uh we we certainly encourage that I I think that's an important point to talk about so you guys are very early in this investment which means contrary to some of your competitors out there that are much more mature businesses they've been around for a while they've done tons and tons of Acquisitions so they've already built up substantial value so if an owner were to roll Equity into a long-term competitor um it's a different situation than rolling Equity into relay because quite frankly the stock price is low it's small right it's brand new it's like it's like buying Amazon in 1996 versus buying Amazon in 200 right um do you find that sellers often understand that or don't understand that do is it something people think about I think if you look back you know 5 years ago um it would be difficult for the sellers to understand that but I think because it's such a competitive environment that they do understand that and that's one of the value Creations that that we that we pitch and when we talk to owners currently we kind of let them know that look we are a very early stage company and you will get early stage stock right so when they do roll over in a company like relay they're certainly going to get a bigger bite of that you know the second bite of that apple is going to be a lot bigger than one of our competitors that might be closer to exit four or five years into their process where we're only a year and a half so for the next three years it's going to be very exciting uh for us and and certainly for all the the founders of businesses that we're going to acquire you know there's thousands and thousands of private Equity firms in North America um you know Riverside's been around for a long time they have a great track record what sort of diligence or investigations did you do prior to to joining relay and the Riverside crew so being in the Fire and Life Safety business for now 22 years um you know I've seen a lot of the players that have been in the business and very few companies have the success that Riverside has in Fire and L safety they have a completely dedicated team to the fire and L safety industry um the operating Partners that's on my board sits on the other boards of PSI and cerite so collectively we're able to share a lot of ideas and best business practices um which is really really helpful and uh you know it gives us an advantage that a lot of companies don't have that especially Regional companies we are mostly a national company when you think about it the companies are in different funds but we talk to each other like we're on the same fund and we're all on the same page so um it gives us a very big advantage in the marketplace to have that that expertise and the leadership and Fire Light safety that most private Equity companies don't have they you might see um an opportunity to get into an industry that you know is is attractive because of the compliance and Regulatory and and non- recession part of the business but Riverside really has done an amazing job in terms of making the right Investments um I think overall there's probably way more than 40 or 50 uh Acquisitions between all three companies at this point um so you know with that there's a lot of a lot of exposure to a lot of a lot of the good things and a lot of the bad things and we've learned a lot from it so going forward you know we take all of that um and we put it into uh our success so are you then personally able to share best practices with those other CEO oh absolutely so we talk all the time um as a matter of fact we all have the same Tech stack um we we're constantly constantly changing ideas constantly looking at Acquisitions in other words um I you know my counterpart in the midwest gets acquisition opportunities in the east coast that he shares with me and vice versa so we share acquisition opportunities um and we share a lot of a lot of a lot of internal knowledge around the industry and and growth strategies and those other two businesses are in predecessor funds to the fund that relay is in so it's reasonable to believe that they'll be exiting before you those other acquisition those other portfolio companies are in predecessor funds right correct yeah so I'm in what's called fund six and and one company's in fund four one's in fund five so one's in fund six so I'm part of a $ 1.9 billion micro Cap Fund you know Chris I wanted to you look at a lot of acquisition targets and God you've been involved and growing a ton of businesses over the years you know when you think about like the family fire protection business out there doing or10 million in Revenue that will ultimately want to exit it at some point what sort of advice could you give owners as far as increasing and building value in their own businesses what are the things they should focus on sure well first I would I would I would focus on the service side of the business I would try to get it away from the installation business as much as possible and really build an inspection testing and maintenance business um I would really focus on expanding your your customer base um not only in vertical markets you know expanding vertical Market strategies but also making sure that you don't have a high concentration of your business in a few different customers um I would look at uh a lot of government contract business um that uh you know where you can set your rates um without without without doing bid work um so uh there's a lot of levers that you can pull as as a as a small business owner and if somebody is uh a five or 10 million business um part of the uh the goal I would think would be for them would be to really have you know 60 70% of that business comes directly from Service uh and make it very profitable uh with having a very Diversified vertical Market strategy and what sort of bottom line if we think about like EIT uh for example what sort of bottom line margins do you think owners should Target we're looking at companies that have uh EA from anywhere from you know 15% to 20% and obviously the higher margin the higher service business that you're going to have is going to be the higher margin business so we put multiples uh on IA we don't look at too much recurring Revenue we don't look at the the sales numbers as much as we look at the ebit so pretty much me and all of the other people that are in this industry are looking at multiples to Eaton that's where things are trading you know I think sometimes it's hard for companies that have capabilities in installation to avoid that because they see that is big chunky money right those are that's a lot of money that comes in from those jobs but at the end of the day it's not recurring at all and it can disappear overnight so your advice is to try to avoid that and and focus more on that service so a lot of companies starting out they typically get their service business from the installation projects right so uh it's kind of a double-edge sword most companies have that installation business that grows the service but as you get more mature in your in your business you want to kind of take the all the installation customers they have convert them into service convert them into inspection and test and maintenance and then build a business from there perfect well Chris listen I appreciate you joining me today it's great to see you down here thank you very much brother you