2 Years to $40m: The Anatomy of a High-Velocity Roll-up

the second company that we acquired we raised in similar format friends and family actually same syndicate of people uh and this is when we enter fire safety right with a very small company 600k in inhibitor and what did you find one about this industry once you were in Yeah, so again, all the quantitative stuff we knew, right? Like thousands of companies, billions in revenue, very recurrent,…

However, going into this company from the outside, it looked fantastic. 1.7 million in revenue, 600K in EBITDA, owners 86 years old, kind of professional management if you want, not sophisticated, but in the end, all employees. Yeah. Being there, we found out we were lucky because that company had an operating model that was extremely, extremely well oiled, right?

The operational manager had metrics and everything under control. and when we look at the margins we saw the recently wasn't necessarily pricing it was just operational efficiency so we started to look at other companies and we saw that that wasn't the case obviously in all of them and even then we saw 20 15 margins with complete chaos operationally so we saw besides what you can see on the…

you roll up your sleep. It ended up being, when we talked later on after the rest of the story, way more work than we expected, but the potential was there, right?

And you also experienced this phenomenon that is so common among Acquiring Minds guests, where once they work so hard to get that first deal, but once they're in the industry, all of a sudden they receive a lot of unsolicited inbound from owners, in fact, raising their hand saying, hey, buy me, because they've heard... this young, hungry person has entered the industry by buying one of their…

You experienced that, and that also helped form the thesis, correct? Say more about that.

Yeah, in the beginning, we received requests from mainly M&A brokers. So they offer in the same area that we were. We bought the first company in the south of Barcelona, and we immediately, almost the next day, we got a broker saying, hey, have another business close by where you are.

It's another fire safety business. It looks similar to what you just acquired. And then we received another call, and that's where we...

We knew, again, the numbers from the outside, but we took a closer look and we realized that in the Barcelona area, there were more than 300 companies in the space. So we actually looked into one of the companies that the broker offered. We ended up acquiring one.

The others were not very good fit, not very maintenance focused, which is what we like. And by now, we're obviously very immersed into the industry. We go to all the fairs, we go to all the events.

But yeah, in the beginning, the realization was when we started to get all this inbound interest, but now it's mostly through relationships that we get the deals coming to us, yeah.