The Searchers Building a $10m EBITDA Powerhouse

You mentioned your recap in 2023. I took away from it that you did it in order to enable the next phase of growth, which has been M and A led. Can you tell us a little bit more about the recap and which investors or how did the investors decide whether to roll or stay? And what kind of outcomes have you seen so far?

Yeah, so we did a recap in 2023. The company went from like I said, 1 to 0 to 6 in EBITDA. And there were some guys that said, you know what, it's been a great week in the casino.

We've made a bunch of money, but there's a lot more money to make if we can put money to work in M and A. And that was the mind that we had, me and my two partners, because we're there, we see the targets. And we'd spent three years plus the year plus of trying to buy this company, mapping out the targets, building the relationship with the sellers we saw the opportunity and we realized that we…

Now we'd just be leaving too much money on the table. And we actually did run a process. We got bids from different buyers, kind of usual suspects.

So we were able to use that, go to the board, go to the investment, say, hey, this is the price. Who's buying, who's selling? And less than 20% chose to sell.

Everyone else chose to roll and. Or put more money in. We also brought in some new guys and we've said, we also, like I said, we sold some shares a little bit in that round. Have to buy a house and all that.

And then how was that received by the investors that you took some shifts off the table?

Yeah, perhaps unlike traditional private equity, in the search space, that's almost encouraged if the business grows a lot, because by taking a little bit of air out of the balloon, you cease to have as much pressure to then immediately sell the next day and the next day and the next day. So if you're, if you're raising money and your idea is, I'm going to conduct an M and a campaign for two to…

You don't want to have that pressure every day where it's like, look, I need to buy a house because now I have four kids and I started with, with one kid or whatever the math of that is, and you don't have it. You just don't have liquidity. And then that could, you know, incentivize you to sell the business or operate in a certain way.

So, no, that was fine. I mean, it's not like we sold a ton. If we had said, hey, we're selling everything and we'd like more money like that, that, that would not have gone over very well.

So, no, it was, that was very supported and there was a lot of precedent for that type of thing, specifically in the search space. So, you know, perhaps not the case for a typical independent sponsor or whatever you would else would see in private equity.