I'm excited to share that I've successfully completed the acquisition of Turner Hat Company following a 14-month self-funded search. Turner Hats designs a wide range of wide-brimmed hats from its headquarters just outside Auburn, Alabama, and distributes them to retailers across the United States.

Thank you to the searchfunder community for the great resources and advice. (I think I read about 45 posts on working capital). I learned a ton from the platform.

My top 3 takeaways from the process:

  1. Go smaller than your maximum EBITDA: When I started searching, I (like many) wanted to find the largest possible deal I could. I figured that a bigger company would automatically lead to a larger return. My first LOI was right at the upper limit, and I was constantly stressed about financing and funding growth post-acquisition. This business I ended up with was on the lower edge of my EBITDA threshold. During the acquisition process, I came to appreciate the extra flexibility this size gave me in the deal structure and the reduced stress in negotiating the deal points. I could focus on what put the business on its best path forward. Post-close, we're well capitalized to fund expansion - the types of exciting initiatives I pursued ETA for. Financially, I got funded at a lower DSCR because I was a less risky borrower (if I had to, I could service more of the debt with savings).

  2. Be flexible: I started my search with a rigid set of criteria. In particular, I never thought I'd buy an apparel business because I assumed it was cyclical. (I also never thought I'd move to Alabama.) Frankly, I dug deeper into the company because I was getting desperate after an LOI fell through. Turner met my technical criteria, but not all of my qualitative criteria at first look. It turned out that this particular apparel business isn't significantly impacted by cyclicality and has demographic tailwinds within its particular niche that I never would have seen without a deeper look. Geographically, the location of the business likely drove away other searchers, and there is some built-in opportunity establishing operations in a more popular location.

  3. Don't quit your day job if you don’t have to: I searched primarily on nights and weekends, with owner and broker calls scheduled occasionally during the workday. There were times when I was overwhelmed with both jobs, but there were also several periods (especially during the holidays) where there was almost no deal flow to review. Keeping my job allowed me to be more selective, gave me solace when things weren't going well, and kept me out of my own head (the search process can be very lonely).

Please feel free to reach out with questions. Stay positive fellow searchers!