15 Sep Acquiring Minds: From SBA Loan to High 8-Figure Exit
Today’s story has an eye-watering outcome. And it shows the potential of buying a business. Jerod Pierce used the equity from a townhome that he’d house-hacked with some buddies to buy an HVAC business doing $3.5m in revenue, half a million of SDE. He was able to buy the business himself, without investors. Five years later, he sold it for upper 8 figures. Jerod doesn’t tell us the exact figure, but he does say that he turned down $95 million, so it had to be in range of that. Jerod is humble about this staggering success. He acknowledges that timing was crucial here; he bought and grew Mercurios just as HVAC was becoming a white-hot target for private equity. But really there is so much Jerod should take credit for. He did 10x the revenue of the business over those 5 years from $3.5m to $35m, and 12x’d that $500k SDE to over $6m of EBITDA. So yes, there is luck here in that he could command a higher multiple than he might have gotten in cooler times. But at $6m of EBITDA, he would have had a big 8-figure exit whatever the multiples had been. He’s subsequently acquired another small home services business, this time through his family office rather than as a scrappy self-funded searcher with an SBA loan. But it has not gone well, and Jerod believes that his lack of presence is a big reason why. There is much to take from this epic business-buying journey with Jerod Pierce, owner of Olympic Holdings Investments. Enjoy.
