Live on Bloomberg TV

00:00THE DWYER OWENS, BOARD MEMBER AT THE DWYER GROUP. WE HAVE BEEN TALKING ABOUT THE RENTAL CRISIS BUT I WANT TO GO EVEN FURTHER BACK TO 2000 AND THREE WHEN YOUR FAMILIES COMPANIES -- FAMILY'S COMPANIES HAVE BEEN AROUND FOR DECADES AND YOU DECIDE MAYBE DECIDE TO DO SOMETHING DIFFERENTLY. PAM: WE WERE A PUBLICLY TRADED COMPANY, WORKING HARD TO GROW THE EARNINGS QUARTER BUT WERE NOT GETTING ANY REAL APPRECIATION OF THE VALUE. THERE CAME A TIME THAT WE SAID IT WAS TIME TO SEE -- TO VIEW PLAN B, LET'S GO BACK TO BEING PRIVATE. 9/11 HIT AND EVERYTHING STOPPED. THEN WE STARTED GETTING CALLS FROM PRIVATE EQUITY GROUPS. MONEY HUNGRY FOLKS FROM NEW YORK WHO WANTED TO GET EVERYBODY OUT OF OUR BUSINESS -- EVERY BUCK OUT OF OUR BUSINESS THAT THEY CAN. IT WAS RIVERSIDE'S FIRST PRIVATE TO PUBLIC TRANSACTION AND CERTAINLY A NEW EXPERIENCE FOR US. AT THE END OF THE DAY, WE HAD SOME TOP HITTERS -- TOP BIDDERS. JASON: SO PAM, YOUR FIRM HAD LOOKED AT LOWER MARKET, LOWER MIDDLE MARKET. WHAT WAS IT ABOUT THIS COMPANY THEN THAT WAS ATTRACTIVE, AND THEN WHAT HAPPENED OVER THAT SUBSEQUENT FIVE OR SO YEARS? PAM: WILL WE SAW WAS SOMETHING THAT WAS A CRITICAL NEED IN SOCIETY -- WHAT WE SAW WAS SOMETHING THAT WAS A CRITICAL NEED IN SOCIETY. WE LIKE TO BUSINESSES THAT PROVIDED CRITICAL NEEDS TO PEOPLE. WE EMPIRICALLY WERE A COMPANY WITH A STRONG VALUE SYSTEM AND DWYER WAS A GREAT EXAMPLE OF A COMPANY WITH A SUPERB VALUE SYSTEM. WE LIKE THE FRANCHISING MODEL -- WE LIKE THE -- LIKED THE FRANCHISING MODEL. JASON: YOU GET INTO THE FINANCIAL CRISIS 10 YEARS AGO AND AT THAT POINT YOU ARE READY TO GET OUT RIGHT AROUND THAT TIME AND GET SOME MONEY BACK TO YOUR INVESTORS. YOU HAVE TO RIDE IT OUT. WHAT WAS GOING ON FROM A CONSUMER PERSPECTIVE? TAKE US BACK TO THAT TIME. DINA: IT WAS AN INTERESTING TIME BECAUSE WE HAVE NEVER FELT A RECESSION. OUR BUSINESSES ARE PRIMARILY RECESSION RESISTANT. THIS WAS ONE RECESSION THAT WAS DIFFERENT FOR US AND A COUPLE OF OUR BUSINESSES DID FEEL IT AND WE WERE SO GRATEFUL TO HAVE RIVERSIDE IS OUR PARTNER. IT WOULD BE PREMATURE TO EXIT AT THAT POINT. WE BUILT A LOT OF RELATIONSHIPS AND WE ALSO HELP PROVIDE GREATER VALUE TO OUR FRANCHISEES, HELPING THEM GROW ORGANICALLY. JASON: SO YOU SELL THE COMPANY IN 20 -- IN 2013, GO BACK IN AND 2014, SOMEWHAT RARE. FROM 2014 TO 2018, YOU DO 11 ADDITIONAL ACQUISITIONS. YOU SELL THE COMPANY THIS SUMMER. NOW HE WE ARE UP-TO-DATE -- NOW WE ARE UP-TO-DATE. WHAT MADE IT SUCCESSFUL FROM A PRIVATE HE -- FROM A PRIVATE EQUITY STANDPOINT? PAM: ONE OF THE GREAT THINGS ABOUT PRIVATE EQUITY IS WE RESPOND TO EXTERNAL ENVIRONMENTS. HERE WE HAVE THE SAME COMPANY TWICE. IN THE FIRST ENVIRONMENT, THAT WAS AN ENVIRONMENT WHERE WE HAD AN ENORMOUS RECESSION. WE HAD TO HOLD THE COMPANY THROUGH THAT RECESSION AND HELP IT GET CONTROL. THE NEXT TIME, WE ARE TRYING TO DO YOU RISK FOR OUR -- TRYING TO DEAL -- DE-RISK FOR OUR INVESTORS. WE KNEW THE MANAGEMENT TEAM, WE KNEW WHAT IT COULD DO AND WE HAD BUILT THOSE RELATIONSHIPS EARLY IN THE PROCESS SO WE WERE ABLE TO THEN BRING ALL OF THOSE ADD-ONS QUICKLY INTO OUR FAMILY AND GROW THE COMPANY. WHAT IS INTERESTING IS WE TRIPLED THE ENTERPRISE VALUE BOTH TIMES. IT REALLY SPEAK TO PRIVATE EQUITY -- A REALLY SPEAKS -- IT REALLY SPEAKS -- JASON: 2018, THE LONGEST BULL MARKET IN HISTORY, A BOOMING ECONOMY. ARE CONSUMERS REALLY FEELING THAT GREAT? YOU ARE LITERALLY IN THEIR HOMES EVERY DAY. HOW ARE THEY DOING? DINA: THEY ARE DOING THAT GREAT. WITH THE HELP OF RIVERSIDE WE CREATED THIS GREAT TECHNOLOGY , A COMMUNITY OF HOME SERVICE EXPERTS THAT IS TAKING THE DISRUPTION GOING ON IN THE HOME SERVICE ARENA AND SAYING LET'S TAKE ADVANTAGE OF THIS. WE HAVE 3200 FRANCHISEES. PEOPLE NEED IT. WE HAVE A SIGNIFICANT INCREASE IN OUR CONSUMERS USING MORE THAN ONE OF OUR BRANDS BECAUSE NOW WE ARE EDUCATING THEM. WE ARE ALL PART OF THIS ONE COMPANY BASED ON THIS CORE VALUE. JASON: PAM, LET'S GET REAL ON PRIVATE EQUITY. 10 YEARS ON FROM THE FINANCIAL CRISIS. PRIVATE EQUITY HAS EMERGED AS AN ASSET CLASS THAT IS VERY ATTRACTIVE TO INVESTORS, ESPECIALLY IN LIGHT OF HOW BANKS HAVE BEEN MORE HIGHLY REGULATED. YOU HAVE $8 BILLION OR SO UNDER MANAGEMENT. WHAT IS THE DEALMAKING ENVIRONMENT RIGHT NOW, GIVEN HOW VALUATIONS HAVE COME UP? PAM: IT IS SUPER COMPETITIVE OUT THERE, BUT I THINK WHAT WE WOULD SAY IS YOU HAVE TO INVEST THROUGH EVERY CYCLE. INVESTORS ARE NOT HAPPY TO HAVE YOU SIT ON THE SIDELINES. YOU HAVE TO CHANGE HOW YOU ARE LOOKING AT DEALS RIGHT NOW. YOU HAVE TO DE-RISK THEM. YOU SEE HOW YOU CAN TAKE ADVANTAGE OF DISRUPTION, AS WE DID IN DWYER. THAT IS A BIG ADVANTAGE, SO YOU JUST HAVE TO BE PREPARED TO FIGURE OUT HOW YOU ARE GOING TO THE RISK -- D RISK -- DE-RISK AN ASSET. WHEN YOU LOOK BACK AT WHETHER YOU USE PUBLIC MARKET EQUIVALENTS OR ANYTHING, PRIVATE EQUITY ALWAYS OUTPERFORMS THE OTHER ASSET CLASSES, BECAUSE WE CAN AND THIS IS A GOOD EXAMPLE OF THAT. IN EACH CASE, WE RESPONDED DIFFERENTLY AND -- JASON: 20 SECONDS TO GO. WE HEARD A LOT OF GOOD THINGS ABOUT THE CONSUMER. ARE CEOS WORRIED THAT THIS BOOMTIME IS COMING TO AN END? DINA: I THINK IT IS A CORRECTION

No schedule data available.

The Private Equity Partnership That Transformed Dwyer Group

Dina Dwyer-Owens, brand ambassador and board member at Dwyer Group, and Pam Hendrickson, chief operating officer and vice chairman of strategic initiatives at Riverside, discusses how Dwyer Group used private equity to grow and adapt the company to a changing marketplace. They speak with Bloomberg's Jason Kelly on "Bloomberg Markets." (Source: Bloomberg)

More From Bloomberg Markets
All episodes and clips

QuickTake
Explaining the world with Bloomberg News
More episodes and clips