Growing a $5m Metal Business 40% in Year 1

Yeah, so we, the business was about 5 million in revenue when we bought it. About 17 people. We had some retirements. The owner and a couple other employees retired and so we were able to hire behind them.

These were all planned and we knew that these things were going to happen when we came in. And then last year we were able to grow to just shy. We grew about 40% just shy of 7 million.

At the same time we were trying to, to build process. I think going back would I have done it the same way and push so hard on growth before building some more process? Maybe not, but I don't know that you can ever time those things perfectly.

But perhaps the biggest thing about this business that, that we had to work work through as we bought it was about three quarters of the business is a major large customer that has been a customer of the business for over 50 years. It's why the business moved down from Michigan to South Carolina in the 70s. And that was something we really did have to work through.

But that was something that. To go back to your previous question, when we talked about it, it was really that technical expert that, that we have and the fact that we're not just making a thousand of a part, we're making highly specified, semi complex, I'll call them Fixtures and, and assemblies that really require a level of technical understanding and an understanding of the end application to…

Can you share how you structured the deal to acquire the business?

We used SBA debt. We put about 10% down. We had about a 15% seller's note and then the remainder was was SBA secured debt.

And that you had mentioned that there was property involved which allowed you to stretch out the amortization. Talk us through that.

Yeah, so the property was about 30% of the value. That was an interesting part of the deal because we actually towards the end had a, an adverse finding on our, our phase two environmental study on the property that threatened to, to prolong the time to close. It was something that was very minor and ended up in the end being very minor, which everybody would have said.

Our banker said if this was not an SBA deal, it would have just flown through, it would have been a non issue. But with the SBA there's higher. Whenever there's an environmental finding, what they do is they hold up the closing of the loan.

And this is what we learned. Until either that finding is, is resolved with the state agency or you have to escrow the maximum amount that could in worst case scenario be needed to remediate that from the deal. And so fortunately we had a great, there was a great broker involved.