The Neverleak Company’s Post

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