The Origin Story of a Compounder ($80m and Counting)

And we think that we can do that by really building the culture from the ground up and making sure that we really are the best residential H Vac company out there. So that both, both customers and employees would see that and, and have a really clear choice of what to make.

And to put a chronological sort of approach or take a chronological approach. What we're seeing was companies selling to consolidators, employees fleeing, which then led to some multiples inflating across the board because they were starting to buy businesses. And then now we're in the stage where we're starting to see a tremendous amount of turmoil, friction, and financial stress where…

And so we've seen several of these groups start to show signs of either going under or closing or whatever it may be.

And do you feel like a shakeout is coming from all of that hyperactive H Vac consolidation activity?

We saw a pretty large one last year. And so I think that we are still, you know, at the beginning of this and that, you know, people are not disciplined, you know, selling their business to a large, faceless buyer. You have to realize that that's who you're, you're selling it to.

And that if they've got thousands of businesses, you know, to Cut your brand or your business that you've created is really. Yeah, there's no second thought to it.

Yeah. And we've, we've seen, you know, certainly there are some of the larger ones that were headlines in the last year in terms of, of these roll up groups failing, going into bankruptcy and at a more local scale, we've started to see some of the shift where some of the opportunities that we're looking at now where before we were and typically on average we still are dealing with someone who is…

We've started to get opportunities coming to us where we would be acquiring from the acquirer. You know, where someone bought this business, they've, they've failed for, for a number of reasons.

And now it's, it's really a turnaround opportunity where it's less about what we're going to pay in cash, which might be close to nothing and more the fact that, you know, we can bring a, an ability to operate and, and move fast and, and make some decisions on, on what we want to take on that I think someone who was doing this for the first time or someone who's trying to do this from an ivory…

So it's definitely a shakeout that we see starting to happen. And I think it's going to be a big part of our growth and opportunity over the next few years. Certainly I think some groups are stronger than others.

So I don't think that, I don't think that all of these groups are failing, but I think a lot of the largest ones have a lot of problems, especially in, at least from what we've seen in our region. I don't know, it might be that there's a playbook that works really well in the Southwest or Southeast where I think they were operating for a long time, I can't really say.