In this episode of Yet Another Value Podcast, host Andrew Walker welcomes back Chris Waller, founder of Hidden Gems Investing, for his third appearance. Chris shares his deep research into Judges Scientific, a UK-listed serial acquirer of niche scientific instrument businesses. The discussion covers Judges’ disciplined acquisition strategy, historical returns, and competitive advantages in attracting founder-led businesses. They examine the challenges of scaling acquisitions, lessons from Geotech, the impact of recent headwinds like US college spending cuts, and long-term growth prospects. Chris also addresses management succession risks, valuation considerations, and the cultural nuances behind the company’s dividend policy. The conversation blends analysis of market misperceptions with insights into capital allocation, operational philosophy, and how to sustain high returns in a specialized sector.

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[00:00:00] Introduction and guest background

[00:02:07] Chris on Hidden Gems Investing

[00:02:57] Overview of Judges Scientific

[00:06:43] Example acquisitions and product types

[00:07:47] Market misperceptions and headwinds

[00:09:32] Acquisition pricing discipline and competitors

[00:13:44] Reputation advantages over new entrants

[00:15:39] Acquisition pace and scaling challenges

[00:18:43] Geotech acquisition scale and risks

[00:20:07] Geotech’s business model and setbacks

[00:23:53] Expedition delays and revenue impact

[00:25:48] Halma example for scaling runway

[00:29:17] Management succession considerations

[00:32:51] Sale likelihood and culture preservation

[00:33:30] US college spending cuts and guidance

[00:36:56] Recovery scenarios and uncertainty impact

[00:39:21] Potential acquisition opportunities in downturn

[00:41:05] Valuation framework and growth assumptions

[00:43:34] Business quality vs. peer acquirers

[00:44:20] EPS target changes in compensation plan

[00:45:37] Dividend policy and UK investor culture

[00:48:35] Post-acquisition integration philosophy

[00:51:14] Closing thoughts and R&D discipline

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