Bradley Roofner, Logan Brown·January 3, 2023

How to Buy, Transform & Sell a Multimillion Dollar Business !

Bradley Roofner and Logan Brown, two University of Texas friends who started a micro-cap value hedge fund in college, pivoted to entrepreneurship through acquisition in 2017 when they bought Wyde Gilt Enterprises, a $7-8M revenue Austin landscaping business, for $5.5M using seller financing and equity. The business had roughly $2M in adjusted EBITDA but was heavily project-based (only $1M of $8M revenue was recurring maintenance). The first 2.5 years were defined by a persistent cash crunch — delayed construction projects at close left them revenue-short, and their attempt to fix it by aggressively growing the construction side made cash flow worse, since construction has 90-120 day collection cycles. They eventually turned the company around by systematically growing recurring maintenance revenue 100% per year for 3.5 years through a productized service offering, a dedicated outside sales team, and high-touch premium sales presentations. By the time Brightview approached them in early 2020, revenue had grown to ~$23.5M and the maintenance mix was approaching 50%. They sold to Brightview in October 2020 for an undisclosed eight-figure sum, having transformed a construction-heavy local operator into a professional, recurring-revenue landscaping platform.

Deal facts

purchase price: $5.5m
multiple: ~2.75x EBITDA (implied)
sde ebitda: ~$2m adjusted EBITDA
revenue: $7-8m at acquisition; ~$23.5m at sale
financing structure: Seller financing + equity; no SBA loan
notes: Sold to Brightview (publicly traded landscaping company) in October 2020 for an undisclosed eight-figure sum estimated at $20-30m based on host triangulation at ~6x EBITDA on ~$4.5-5m EBITDA. Business originally named Wyde Gilt Enterprises (Wide Gilt / WLE), renamed post-acquisition. Closed acquisition February 2017.

Why this business

They were running a small hedge fund focused on micro-cap public equities and realized private businesses could be acquired at 2-5x EBITDA with leverage vs. 8-12x in public markets, and that their entrepreneurial energy was better suited to owning and operating a whole business. They wanted to stay in Austin, buy a 'boring' or 'unsexy' business, and bring professionalization as their edge. Their third partner had a background in landscaping, which made that sector attractive.

What's working

Shifting the revenue mix from project-based construction to recurring maintenance contracts — maintenance had better margins, faster collections (net 15-30, sometimes paid in advance), and compounded growth of ~100% per year for 3.5 years
Building an outside sales team with a productized offering: uniform contracts, 43-visit schedules, standardized service suite, and aggressive sales presentations (leather binders, community maps, PowerPoints) targeting a curated list of top HOA and commercial customers
Rebranding and professionalizing the company (new name, Under Armour uniforms, emergency-response mindset) to differentiate as a premium provider in a fragmented market
Hiring a VP of Sales who had been mentored under a UT athletic director and proved to be a culture builder and strong seller
Partnering with JPMorgan Chase for lines of credit and capex facilities that allowed the company to invest ahead of growth
Organic growth strategy rather than acquisitions: building a compounding sales engine was cheaper and produced higher returns than acquiring EBITDA at 5x multiples
Sold to Brightview, a premier strategic acquirer, which provided an eight-figure exit while also offering career upside for the company's employees

What's hard

Immediately after close, anticipated construction projects were delayed, creating a cash crunch within the first three months despite bringing extra working capital
Tried to fix the cash shortfall by aggressively growing the construction side, which worsened the problem — construction revenue has 90-120 day cash cycles and incoming costs start on day one
Nearly doubling construction revenue year-over-year introduced new customers with worse payment dynamics (general contractors, long lead-time deposits), compounding the cash flow crisis for roughly 2.5 years
Difficulty in accounting for construction project earnings led to repeated margin write-downs months after project completion, eroding confidence in their own results
Managing 60+ employees older than themselves from day one, with no prior management experience at that scale
Did not stress-test working capital needs for delayed project scenarios during diligence; brought insufficient cash to close for a construction-heavy business
Values around not laying off people made it hard to aggressively shrink the construction division even when the financial case was clear
Did not know about the search fund community, ETA playbooks, or standard deal structures — had to invent everything from scratch, including pitching investors on an unfamiliar structure

Notable quotes

We took a project-based business and transformed it into a maintenance business. That process is very much like surgery. There's a lot of pain involved, and in this case with no anesthesia, where you're experiencing every single painful part of the operation to transform it from one thing into the next.

Working capital tends to be like the last thing you think about. But as soon as you're an operator, working capital becomes like your whole life. If you gave it more consideration in the deal-making process, it's going to make your life easier as an operator. If you gave it less consideration, your life is going to be much harder.

We ended up acquiring zero and growing at a hundred. The model was completely wrong. We said we were going to acquire one million dollars of EBITDA every year and grow it ten percent, and we ended up doing something that was almost the exact opposite of what we had originally put together in our thesis.

If you can actually build a sales engine up and running, it just generates way more value than an acquisition strategy and with less friction. The cost to go acquire that EBITDA is so much higher, especially when you consider the amount of lost business that might come from integrating that acquisition.