I live in the Midwest and was wondering if any of you guys had experience acquiring small, non-sexy industrial companies (recycling facilities, steel treatment plants, chemical manufactures) and running them long term. More specifically, using a bond issued by the seller to reduce risk and give the seller some upside on the sale. I am seeing these types of businesses listed by brokers, and the valuations are awesome (1x rev, 2-4x FCF in addition to PP&E and Inventory) and it really seems like nobody is lined up to get involved. They really need to go to another owner/operator. Traditional PE guys do not do deals this small. For instance – There is a small (>10 employees) gasket and sealing products manufacture for sale in my area. It was started in 1965 by the current owner, who is now well into his 70’s, and is looking to retire. I am thinking about looking into what it would take to build a small portfolio of these types of companies. Does anybody have any experience doing anything like this? I could pontificate on this for a long time, so I apologize if this post seems confusing.
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