Yeah, okay.
Acquiring Minds
Acquiring a $7m Niche Marketing Agency with 50 Employees
Episode
Excerpts · 346 segments · ~1:21:52 long
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06:24 Rob's retail and Call of Duty background16:12 Geographic search in Greensboro22:15 Proprietary networking tactics and lessons30:16 Finding Sales Factory via Axial43:46 What the agency does (PLRs, research)50:36 Deal structure and quality of earnings59:09 Equity roll and the 20% tripwire1:05:24 Change management and post-close lessons
That Rob, this is all great background. The business that you did buy. Tell us about it or tell us about how you found it.
Yeah, yeah. So I bought Sales Factory. We're a retail marketing and consumer research agency with a niche that we work in the home improvement and building supply space. So brands that you would find if you walk into your low local Lowe's and Home Depot.
I found it through a broker which is ironic and somewhat frustrating because I think I was the most caffeinated guy in Greensboro during my search and I never got connected to Jed. And if ADAM Duggans did 600 meetings, maybe I did 599. But we got, we got connected through a broker on the Axial platform which I'm curious Will, does that, do you hear that often?
Like Axial was just another, you know, kind of tool in the tool belt in my search and it was how I got the deal done. But I don't know how often searchers are actually leaning into it because of the success fee.
They are not, it depends. Generally a self funded SBA style searcher is not using Axial. I'm not sure why. Probably because I'm not sure people know
what the success fee is.
Spoiler, it's, it's not insignificant but if, you know, if you find your business there, it's, it's, it's probably an investment worth making. Also the businesses on Axial are quite a bit larger. So we hear at Mines Capital independent sponsors that sort of, you know, 1 and 2 and 3 and 4 million dollar of EBITDA level of business is.
Where is Axial? Sweet spot. So it's much more, it's very commonly used. It's the, it's the biz buy sell of independent sponsors and small private equity groups. So that's how I'd break it down.
But yeah, it is interesting that it doesn't have nearly the mind share among searchers that it does among independent sponsors and in lower middle market private equity groups.
Yeah, and that kind of tracks with my understanding. So I think my deal was probably on the smaller end of what's listed there. But I'm guessing because my profile probably said something about North Carolina or Greensboro or retail, the broker put two and two together and so one day just going through My routine.
It opened up an email from a broker there listing a Greensboro retail marketing consumer strategy business. And so jumped at it and, you know, went to go initially meet Jed, the owner. And I told him, I said, hey, let's pick somewhere.
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