A Searcher’s Second Act: Building a $25m Holdco

So we're talking to our peers that are running other companies and telling them our story. And a best compliment I got is there's one company in the Northeast where the owner told me, yeah, I'm not ready to retire yet. So I'm probably going to work.

I'm going to die in the office. That was his joke. But he goes, there's a list of potential buyers in my desk drawer and you're on that list. And so he's like, my wife knows to open that door if something happens to me.

Well, that's one of the benefits, too, of this long term horizon that you have not having raised a fund where the clock is ticking for you to deploy capital. Also, searchers whose own runway is a ticking clock. So searchers need to move.

They can't just wait around for hoping the seller is ready to sell. So great advantage that you have with this long term this long term perspective or approach.

And I'll touch on kind of one more thing. So relatively new announcement for TXE is we added an operating partner here recently, actually on Monday of this week, who is in a different region and is looking at businesses in our same kind of sector, but basically wants to be the CEO of the company after it's bought. And so we look at that as kind of a new evolution for TXE as well.

Can we find the right operating partners who we can help source a deal? Yeah. But, you know, we need an operator and we're not the businesses that in Houston, we're not going to be able to be on the ground. So we need an operator.

So really excited to kind of see how that evolves. But again, it requires that we're looking at kind of those smaller businesses who are probably going to have. an owner operator stepping out after they sell, we have to put someone immediately back in.

And so I think we're going to keep looking at these, at these kinds of different opportunities, but this aligns a shared service because that operator, once they step in, one wants to have the backing of TXC to kind of help with everything that happens in the, in the back office there and allow this new CEO to just be focused on customer operations and sales. And so that's been a new evolution to…

And was that operating partner a searcher or somebody from ETA land? It is, yeah. So someone who had approached searching before, stopped, and then kind of, I guess, getting back into it in some ways, but with TXE.

And they have an equity consideration, presumably, in the business that they find for you.

Absolutely. In fact, we'll look very much like co-investing together. So we'll put the structure together and then that individual will be able to bring as much capital as they would like to to the table alongside us to actually make sure they have a good amount of upside. Because we are looking at these small deals, you know, there has to be enough upside for everybody.