Acquiring Minds: Episode Summary Episode: 2 Years to $40M: The Anatomy of a High-Velocity Roll-up
Release Date: August 11, 2025
Hosts: Will Smith & Nicholas James
Guest: Luis Reyes, Founder and Managing Partner of Iberian Ventures (ibv)

1. Introduction to Luis Reyes and Iberian Ventures

[00:00]
Will Smith opens the episode by introducing Luis Reyes, highlighting his humble beginnings in the Mexican countryside and his remarkable journey to leading Iberian Ventures (ibv). In just two years, Luis and his team have achieved an impressive $8 million in EBITDA, consolidating 24 fire safety businesses across Spain with aggregate revenues nearing $40 million. The ambition is clear: double this figure within the next 18 months, fueled by capital raised from a German family office.

Notable Quote:
"Luis and his team are building Iberian Ventures, or ibv, a consolidation of fire safety businesses across Spain. They're blanketing the country, dispatching young, hungry former consultants to meet owners and find targets." — Will Smith [00:00]

2. Luis Reyes’ Background and Transition to Entrepreneurship

[05:14] - [11:56]
Luis shares his professional journey, transitioning from a seven-year stint at McKinsey in the U.S., where he specialized in post-merger integrations for major transactions like T-Mobile with Verizon and HP. While working in Boston, Luis was recruited by Bain to lead a technology practice focused on post-merger integration in Madrid, Spain. The experience in Spain revealed a fragmented lower-middle market where traditional private equity had limited involvement, especially with SMEs.

Notable Quote:
"We thought that we could give it a go. And honestly, the way we did it is we hired first while working at consulting, a person to help us first flesh out the thesis a bit more." — Luis Reyes [09:16]

3. Building Iberian Ventures: Initial Strategy and Acquisitions

[11:56] - [20:16]
Luis explains the foundational strategy of ibv, focusing on fragmented industries with potential for inorganic growth. The first acquisition was a poultry distribution business, funded by raising close to $1 million from friends and family. This acquisition was a testing ground, allowing Luis and his partners to validate their roll-up thesis within a fragmented and structured market.

Notable Quote:
"We always look at very fragmented industries because we wanted the ability to continue growing inorganically." — Luis Reyes [11:56]

4. Entering the Fire Safety Industry in Spain

[20:16] - [25:01]
After successfully acquiring the poultry distribution business, ibv ventured into the fire safety sector by acquiring their second company. Fire safety in Spain presented a highly fragmented market with over 300 businesses in Greater Barcelona alone, each varying in size from $100k to $2M in EBITDA. This sector offered significant opportunities for consolidation, given the operational inefficiencies present in many small businesses.

Notable Quote:
"In Spain, SMEs account for around 65% of the GDP, leading to a highly fragmented market where consolidation is ripe for the taking." — Luis Reyes [16:33]

5. Leveraging AI for Operational Excellence

[29:03] - [38:47]
One of the key differentiators for ibv is their AI-first approach to operations. Luis details how AI is integrated into route optimization, scheduling, and call center operations. By automating these processes, ibv enhances operational efficiency, reduces costs, and improves customer experience. For instance, their AI-driven route planning ensures that technicians are assigned optimal routes based on expertise and customer history, thereby maximizing productivity.

Notable Quote:
"We are AI first in everything that we do. We started integrating AI into the scheduling of the routes with the customer and every single business owner integrated into the organization say, that's not going to work. So we went, we tweak a little bit the model and then we expand." — Luis Reyes [33:11]

6. The High-Velocity Acquisition Process and Integration

[38:47] - [47:42]
Luis emphasizes the importance of a dedicated and skilled team in executing high-velocity acquisitions. ibv’s M&A team, comprising former professionals from top consulting firms and private equity backgrounds, actively engages in sourcing, evaluating, and closing deals. The integration process is streamlined through robust operational frameworks and a focus on maintaining high standards across all acquired entities. This systematic approach allows ibv to assimilate new businesses swiftly while preserving operational integrity.

Notable Quote:
"It's not about being smart or about wanting to work a lot of hours. You need a team, you need a team. Specialize on every area of the thing that you want to do." — Luis Reyes [39:19]

7. Challenges in Raising Capital in Europe

[57:45] - [65:58]
Raising capital in Europe, particularly in Spain, posed unique challenges for ibv. Unlike the U.S., where capital markets are deep and familiar with roll-up strategies, European investors, especially in Spain, are more risk-averse and traditional in their investment approaches. Luis describes how initial capital was raised through friends and family, gradually expanding to family offices open to unconventional strategies. The cultural norms around management fees and co-investments also differ, requiring ibv to navigate carefully to align investor expectations.

Notable Quote:
"In Spain, investors are by nature and kind of the social and cultural norms are more risk averse, so they love investing in buildings and traditional vehicles." — Luis Reyes [62:30]

8. Operational Excellence as a Value Driver

[46:50] - [54:59]
Luis discusses how operational excellence is a cornerstone of ibv’s value creation. By implementing best practices, leveraging AI, and maintaining rigorous operational standards, ibv transforms acquired businesses into high-efficiency entities. This focus not only enhances profitability but also differentiates ibv's portfolio in the market. Operational improvements include centralizing call centers, optimizing technician routes, and automating repetitive tasks, which collectively drive scalability and sustainability.

Notable Quote:
"AI and in general, automation is a way of turning a services business, which most of the costs are labor, into a high operating leverage business where you do capex and then you replace manual labor by something that scales better." — Luis Reyes [37:59]

9. Future Goals and Scaling Ibv

[57:37] - [71:12]
Looking ahead, ibv aims to double its revenue within the next 18 months while continuing to acquire and integrate additional fire safety businesses. Luis outlines plans to solidify the executive team, enhance operational frameworks, and ensure that capital providers are confident in the sustained growth and quality of the consolidated entity. The ultimate goal is to create a robust platform that can support further expansion and potentially launch additional verticals in the future.

Notable Quote:
"Over the next year or 18 months, double the size of the company in terms of revenue. We want to consolidate our executive team and make sure that the capital providers and the families that have supported feel comfortable that we are, you know, creating a quality asset for them to get the returns that they are expecting." — Luis Reyes [70:35]

10. Key Takeaways

• Fragmented Markets Offer Roll-up Opportunities: Identifying highly fragmented industries with low middle-market penetration is crucial for successful consolidation.

• Operational Excellence is Paramount: Leveraging technology, especially AI, can significantly enhance operational efficiency and scalability.

• Dedicated and Skilled Teams Drive Success: A specialized team with M&A expertise and operational acumen is essential for high-velocity acquisitions and seamless integrations.

• Navigating Capital Raising in Europe Requires Adaptability: Understanding and aligning with local investor expectations and cultural norms is critical when raising capital outside the US.

• Continuous Learning and Adaptation: Engaging deeply with the industry, learning from each acquisition, and adapting strategies are key to sustaining growth and operational excellence.

Closing Remarks:
Will Smith and Nicholas James commend Luis Reyes for his impressive achievements and strategic approach in the European market. They emphasize the importance of his insights for aspiring acquisition entrepreneurs, especially those looking to enter less mature markets.

Final Quote:
"If you can go into roll ups for SMEs in business services, you really have to have a very good operations background and the willingness to get your hands really dirty, which is not the case for the big private equity groups here in Spain." — Luis Reyes [16:38]

Additional Resources

• YouTube Channel: Acquiring Minds
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This comprehensive summary encapsulates the key discussions, strategies, and insights shared by Luis Reyes during the Acquiring Minds podcast episode. Listeners and readers gain an in-depth understanding of the dynamics of high-velocity roll-ups, especially within the fragmented fire safety industry in Spain, and the critical role of operational excellence and technology in driving success.