Eric Calderon·August 14, 2025

A Searcher's Second Act: Building a $25m Holdco | Eric Calderon Interview

Eric Calderon is a Houston-based engineer-turned-entrepreneur who discovered search funds at Harvard Business School in 2013 and went on to acquire LK Industries — an 85-year-old niche oil testing equipment manufacturer — in 2015 through a traditional search fund backed by Rick Ruback and Royce Yudkoff. The business had $6-7M revenue and a ~25% EBITDA margin at a ~3.5x entry multiple, but an oil and gas downturn hit quickly after closing, forcing staff reductions and operational triage. Eric navigated the cycle, bolted on a calibration lab (Miller and Weber) in 2016, which repositioned LK into the testing, inspection, and calibration (TIC) sector and commanded a higher exit multiple when they sold to a PE group in 2018. After an 18-month stint helping the PE acquirer integrate the business, Eric launched TXE Partners version 2 in 2020 — a holdco/independent-sponsor hybrid targeting industrial TIC businesses at $750K-$1.5M EBITDA — using a shared services model (marketing, HR, finance) across portfolio companies, community bank financing, and operator-to-operator sourcing. The portfolio now totals ~$25M in revenue across multiple companies including a re-acquired LK Industries, and Eric operates with a long-term hold philosophy, co-investing deal by deal with family offices and operators rather than raising a blind fund.

Deal facts

multiple: ~3.5x EBITDA (entry multiple on LK Industries)
sde ebitda: ~$1.5m-$1.75m EBITDA (25% margin on $6-7m revenue)
revenue: $6-7m (LK Industries at acquisition); ~$25m total TXE portfolio today
financing structure: Community bank loan matching SBA terms (no actual SBA); subsequent deals use >50% leverage with community bank debt + seller paper + equity co-investors
notes: Traditional search fund structure for first deal (LK Industries, 2015): Wicker Rice (Rick and Royce personal funds) as equity providers, ~20% carried interest to Eric. Sold LK to PE group in 2018, re-acquired LK later (post-COVID). TXE version 2 launched 2020 as holdco/independent-sponsor hybrid targeting testing, inspection, calibration businesses at $750k-$1.5m EBITDA range. First TXE acquisition: Atlantic Product Services (NJ), year-end 2020.

Why this business

Eric chose oil-and-gas testing/manufacturing for his first search because he had worked in the oil and gas industry as an engineer before business school, giving him industry credibility and customer relationships. After the LK exit, he launched TXE version 2 specifically targeting testing, inspection, and calibration businesses because of the recurring revenue (regulatory-driven, annual calibration requirements), fragmented market, and the technical expertise he had built — an industry he came to love after bolting on a calibration company to LK and seeing the business model's superiority.

What's working

Recurring revenue from regulatory-mandated calibration and testing cycles — customers return annually or per compliance schedule
Shared services model (marketing, finance/accounting, HR/recruiting) spread across portfolio companies, reducing per-company overhead and allowing small companies to access functions they couldn't afford individually
Engineer background giving credibility with technical customers in oil and gas and industrial sectors — 'I could often say things like I've been in your shoes. Here's why I like this product.'
Community bank relationships — working with small local banks whose CEOs know the businesses personally, providing flexibility during industry cycles
AI-assisted sourcing to scrape lab accreditation databases and find owner contact info, reducing manual research burden
Operator-to-operator outreach (reaching potential sellers as a fellow company operator, not as a fund) to build rapport and secure off-market deals
Bolt-on acquisition of Miller and Weber (calibration business) insourced a key vendor, expanded into food testing and medical industries, and repositioned LK as a TIC (testing, inspection, calibration) company — yielding a higher exit multiple
Long-term hold orientation with no fund clock allows patient sourcing and owner-friendly deal positioning; successfully re-acquired LK Industries from the PE group that bought it

What's hard

Oil and gas cyclicality hit within a year of closing LK (2016-2017 downturn) — had to cut staff, stretch payables, and pause growth initiatives
Laying off employees was emotionally the hardest part: 'when you sit across from someone and you've got to actually make that change, it's hard'
Discovered post-close that revenue that looked recurring was actually project-based (multi-year pipeline orders that don't renew automatically) — an important diligence lesson on true recurring vs. repeating revenue
Inventory management in manufacturing: prior owner held 18-24 months of inventory, requiring a transition to more just-in-time purchasing without losing volume discounts
Shared services tension: ensuring portfolio companies feel they receive fair bandwidth; new acquisitions demand disproportionate shared services attention at onboarding
Tension between being an operator (which Eric prefers) and being an investor/holdco builder as portfolio grows
No committed capital pool — must shop each deal to co-investors, adding time versus having a raised fund, though it preserves flexibility
Key-man risk inherent in technical TIC businesses — expertise is a moat but also a concentration risk

Notable quotes

I like to say we want to build a business that other people want to buy, but we're not necessarily looking to sell it.

There's a list of potential buyers in my desk drawer and you're on that list. My wife knows to open that drawer if something happens to me.

As a searcher, you got to tell your story to anyone who's listening. You never know where that deal will come from.

We kind of learned an important difference between revenue that repeats versus true recurring need.