HoldCo Builders This 70/30 Model Leads to Highest Returns
Sep 10, 2025
A seasoned operator shares his journey from selling a company to acquiring eight others. He emphasizes a strategic playbook tailored for growth, with a focus on obtaining businesses with $4M+ EBITDA. Key insights include how to structure deals for bank approval and the importance of reinvesting alongside sellers. The discussion reveals the significance of disciplined capital allocation and building a robust portfolio that appeals to larger investors. There's also a peek into creating engaging newsletters to enhance business strategy.
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Target Company Size And Multiple
- Target acquisitions with ~ $4M EBITDA and ~4.7x purchase multiple to match bank preferences.
- Being specific about size and multiples filters deal flow and aligns lender comfort.
Use 70/30 Structure And Owner Reinvestment
- Structure deals as 70% sale now and 30% later with the owner reinvesting to appeal to banks.
- Insist the owner reinvest and position the deal as a growth partnership aiming for outsized returns.
Owners Prefer Partial Sales
- Many owners resist selling 100% because they see future upside and value a partner who helps prepare an eventual exit.
- They welcome energized partners who bring experience and can help scale the business for a larger later payout.