Ryan Sullivan launched a new career in his late 40s.
The self-described risk averse entrepreneur is acquiring small legacy manufacturing businesses across the US — and it's going well.
His first acquisition was a 100-year-old electrical component manufacturer in Wichita, Kansas, doing about $700k in adjusted EBITDA.
He bought it alongside a partner, who took a little apartment in Wichita and flew back and forth during the transition.
2 years later, they've bought 3 more businesses, have another under LOI, and have expanded to 5 partners.
We spend a lot of time on Ryan's model here, which has some key elements:
* He raises money from investors to buy these businesses, but he does it deal by deal, not as a fund.
* His investors get returns from the acquired business's cash flows, as opposed to the more traditional PE model, where liquidity occurs when they then exit those businesses themselves.
* He's a long-term holder of these businesses. Decades is the plan.
* He uses SBA loans and personal guarantees for each acquisition, which is why his group has expanded to 5 partners. But despite those loans & PGs — or better said, because of — he is conservative with debt; the debt/equity ratios in his acquisitions are low. They are structured such that an acquired business's revenues could decline *by half*, and the deal would still survive.
* And more.
This interview pulls back the curtain on a serial acquirer that's not quite a holdco, not traditional private equity, and not a roll-up.
Which I appreciate because it feels like Ryan and his partners didn't just copy the existing models out there.
Instead they worked from first principles to arrive at a model that aligns incentives, and generates compelling economics even while being conservative with respect to debt & risk.
Enjoy this interview with RYAN SULLIVAN, managing director of North Park Group.
👉 link to interview in comments below