$34M Freight Brokerage Deal Breakdown: Would You Buy This Business?

0:00Welcome to Acquisitions Anonymous. Michael here. Today's deal was me, Bill, and Mills talking about one of the biggest deals we've looked at in a long time and one of the best businesses we've looked at in a long time. And so stick around to the end and we'll explain to you why you'll never buy it. All right. Thanks for being here. Here's the episode. We'll start Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100 % beers anymore. Thumbs down on just the plus inventory. Are you ready to take a leap into business ownership, but you don't know where to start?

0:31Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business. Founded by Harvard MBA and acquisition expert Walker Deibel, the lab is your fast track to success in the search diligence and acquisition process. With hands-on support, world-class resources, and a community of like-minded entrepreneurs, Acquisition Lab gives you the tools and confidence to navigate every step of the journey. And we're proud to call Walker and Chelsea, the lab's director, long-time friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step.

1:02So don't wait to make your business ownership dream a reality. Visit acquisitionlab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. All right. So Mills has chatted this deal to our signal group like more than once. We have to do this deal. So I did not click the teaser. I'm coming in cold. I want to hear Mills describe this thing to us. well well let's any more than the headline and looked at the revenue in ebda and i was like oh heck yes well hold on hold on mills sent the deal twice and said he really wants to do it and then showed up late like there's a disconnect here mill like if you want us to do you got to show up to the recording yeah yeah so we got stuck with the deal we didn't like and here Well, I hope this one does not disappoint.

1:54All right. Let's hear it, Mills. What do you got? All right. Project Overland from Peakstone. Project Overland from an M &A broker called Peakstone. It says it's a tech-enabled, rapidly scaling freight brokerage supporting mission-critical rental and specialized logistics. Does$34.3 million in 2025 revenue,$8.7 million in net revenue, which we're going to dig into. And it says between 2023 and 2027, they're projecting net revenue compound annual growth rate of 47.5%. Wait, did they really put the period for their CAGR to include two full years of projections? Yes. Come on. They're showing that revenue is going to get to 59 million.

2:48These charts are all beautiful if you're not on YouTube. they're all up and to the right beautifully. But 2025 adjusted EBITDA is$5.5 million. We don't know the nature of the adjustments. So it says it's a family owned. Hang on, Mel, let's just recap the numbers. $34 million in 2025 revenue, $8.7 million of net revenue, and$5.5 million of adjusted EBITDA. I'm going to have a lot of questions, but continue. I do too, and I hope we get some answers. on this. But this is where it gets good. It's family-owned, technology-enabled, non-asset-based logistics platform specializing in oversized, heavy haul, and over-dimensional freight.

3:37The company is a trusted partner to a diverse set of premier customers across the equipment rental, distilled spirits, seafood distribution, and disaster response in markets. So what does this company actually do? So it is a freight brokerage, which means they don't haul anything. And they don't own the assets. Correct. Which means if you need some sort of specialized haul in the equipment, rental, distilled spirits, seafood distribution, and disaster response markets, you call them and they know the haulers who can do these types of loads and they broker it out and take a spread. I'm trying to think of like the common denominator between those.

4:22Is it like, is it like a really large generator or some kind of specialty piece of equipment? so i think what it here's a guess um equipment rental it's got to be like big flatbed or something right so special equipment distilled spirits if i had to bet you got to hold special licenses for that so like you can't just throw that on any truck it's you're gonna it's explosive and flammable and it's alcohol across straight lines like it's probably like you can't just put that on any hauler so i think it's like a very small subset of haulers that can do that seafood distribution, I assume like this is, it's definitely got to be frozen.

5:03Um, or it's got to be like, if it's like live lobsters, like maybe it's, you know, can ship live seafood, which is probably a different set of licensing and can haul water tanks and all that stuff. I don't know. And then disaster response, that's also probably different. Like, do we got to airlift the stuff in via helicopter or, you know, via tractor trailer with big mud tires on or something. So to me, I think this company probably looks for specialized weird loads where you can't just broker it out to any hauler and they try to go after those markets. I'm asking AI, why would a freight brokerage specialize in these categories?

5:43These categories look random at first glance, but there's actually a strategic logic connecting them. They have shared operational complexity. Distilled spirits require TTB clients, bonded carriers, navigating state-by-state alcohol shipping laws. Seafood demands cold chain expertise, tight timing windows, and FSMA compliance. Equipment rental means oversized loads, requiring permits, flatbeds, or specialized trailers. Disaster response is rapid mobilization and carriers comfortable operating in chaotic conditions. So this means that customers will pay you a premium for reliability when mistakes are very costly.

6:19All right, I think I did pretty good against GPT there. That was more or less what I pegged it for is Claude. But yeah, you're close. Otherwise you would have beat the crap out of Chad GPT because it's so bad now. So anyway. Why do you guys think that this company exists and people don't just go straight to the source? I mean, the same reason any freight brokerage exists, right? Because the pricing is very different based on available capacity. Like if you call five haulers yourself, you're going to get five very different prices based on capacity. And so the value these guys provide is basically knowing everybody's price and getting you the best one and making a spread.

6:59Like they're a liquidity provider, essentially. That is the difference between the revenue and net revenue. So, I mean, they're passing through the entire cost and then their markup. Yeah, so that means they booked, they booked 30, they charged customers$34 million. their markup was 8.7 million and so they paid out to carriers 26 million or something so they had 8.7 million of spread and then they had 3 million of expenses and they took home 5.5 million because it's a very asset light business and it's probably i mean we didn't read all these other things there's a couple things that stand out in these other bullet points um they say they They have a best-in-class AI-enabled technology platform built around Turbo, TMS.

7:51Does anybody know what that is? Now Googling it. Yeah. Delivering real-time visibility and data-driven execution. TMS is probably Trucking Management System. Yes. Experienced founder-led management team with deep domain expertise and specialized freight. exceptional performance highlighted by 25 net revenue margin profile and 46 net revenue CAGR over the past three years columbia this is interesting columbia based columbia south america i'm sure not south carolina yes columbia based bpo platform providing 24 7 support across dispatch accounting and carrier relations through our site and market exposure position for organic and inorganic growth very basic it's it is a fascinating thing that's happened in terms of all of transportation and logistics like colombia is a dominant player in all of that especially for bpo i went into an office once in medellin and uh i was we're walking around and it's just like row after row of colombians doing back office for trucking companies and in particular this office which was like 25 ,000 square feet, was basically the back office execution for every single regional fuel hauler in the United States.

9:10Like all the small fuel haulers had all outsourced like all of the marketing, finance, admin, like customer service. It was all being done out of this office in Medellin. It's crazy. And what's, so, you know, they have going for them? Same time zone. Absolutely. Which is just huge. Yeah. Well, and then also I think people, and it's been surprising to me, people really underestimate how well America understands Latin American cultures. Like it just feels so much more natural to deal with somebody coming from Mexico or Argentina or Colombia than it does trying to deal with somebody from Eastern Europe or Philippines or Southeast Asia.

9:51Like there's just, we're just so accustomed to Latin American culture here that like it doesn't feel like as much of a gap. Well, I would take it one step further, Michael. Not only are we more accustomed to their culture, their culture is more similar to ours. Their social norms are more similar. Their work style is more similar. Their work norms are more similar. I mean, I've worked with a lot of people from Asia and a lot of people from South America. And not just me, all of my Americans just work better with the South Americans naturally because there's just different, there's so many baked in assumptions about how people relate to each other culturally.

10:25They're very different in Asia. Yeah. Well, it reminds me, post-college, I went and lived in San Francisco, and growing up in San Antonio, which is like 65 % Mexican-American, basically, I developed a certain sense of humor. And it's very dry and kind of self-deprecating. and I went to California where, you know, the dominant minority is Asian Americans and I would make kind of the same self-deprecating humor jokes and they would look at me like I was an alien, which, you know, I'm a six foot five, you know, guy from Texas. So they'll probably look at me like an alien anyway, but I was like, I kind of want to go back to Texas because I can't make any jokes here.

11:02Like, yeah, nobody laughs with me. They're laughing at me. Yeah. So, I mean, this, this is a very optimized like polished not just the sim but like the business itself this is being served up on a platter like there obviously are issues with any business and I think you would sign the NDA and you would figure out what these are but this is a really strong business it would probably trade my guess for like seven times or more if i had like it's tech enabled like it just checks so many boxes that the there are so many institutional buyers who would just fall over themselves for this type of thing i mean this this has to become either a pe platform or get tucked into a pe platform right there's there's this checks all their buckets and they'll pay up for it and you know i mean there are tons there are tons of freight brokerage roll-ups too i mean that already exists i mean this industry getting rolled up hard already yeah this is this probably hit the associate inbox of basically like every market development specialist business development specialist at every pe firm with any kind of smell of this thing i bet i bet there's there were 200 nda signed on this thing and this would add a lot of value right like if you're doing a roll-up, let's say you're a private equity firm, you're doing a roll-up of relatively generic freight brokers, right?

12:35And what you're trying to do is get some size and multiple expansion. But you're still, you know, and that's going to work. Your investment is going to work if you do that. You add this one, now you become specialized, differentiated, and you might start to get some multiple expansion on the whole platform because you're in these weirder, higher, more profitable niches and it makes you look different, this is going to go for a big multiple, I think. Hey everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad.

13:07And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs, that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. So if you want to back somebody buying a small business, CapitalPad is the place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors. So the really great thing too from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions.

13:51They handle standardized terms, standardized governance, standardized distributions, all upfront in black and white. Basically, CapitalPad professionalizes investing in small businesses and the returns can be really, really good. I'm so stoked they exist. It's founded by my friend, Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that's appealing to you if you want to buy a small business and need capital or if you want to invest in small businesses go check out capitalpad.com and tell them that acquisitions anonymous sent you 2023 16 million of gross uh 2024 23 million 2025 34 million they're adjusting your data goes from 0.8 and 23 to 2 million and 24 5.5 million in 2025 we don't know how old this business is but i wonder if this business recreated itself like if it is old it makes me wonder if it has recreated itself into what it is today or i was emails if these guys left a different business and started this business with all their industry contacts and expertise in 2023 and just came out of the gate like a rocket ship yeah yeah there are so many tailwinds for this business like number one re-industrializing of america like the government's trying to do all this stuff number two, you have under Trump, like the department of transportation is going hog on reducing the number of drivers, English testing, all that kind of stuff.

15:18Like it is just, it's going to, they're going to be even more demand for what these guys have, which is deep knowledge and a network of, of people that can do this specialized hauling. Like you gotta, man, that's all just really positive. Like just so much in, in, in favor of it. The big comment about this to me is like we don't usually talk about businesses that are this size or like in this, we talk about lower middle market and kind of more main street size businesses. This is lower middle market for sure at five and a half million in EBITDA. But the quality difference between this and the stuff that we just scratch up on biz by sell is so different.

16:00And I mean, that's why there has been such a drive to buy businesses that are more main street because you go, I could grow it from that into maybe something like this size-wise, quality-wise. It seems like it's a highly optimized business. I don't think that like your traditional kind of first-time business buyer or post MBA student is going to come in and just add tons of value. It's just like low hanging fruit everywhere. No, there's no way you're competing with private equity on this deal. and the broker the the these are investment bankers peakstone like they're not even going to show you the deal unless you have committed capital you're not even going to get to look at this like there there's just as if you're an independent person or searcher with no funding like no way they're not even gonna they're not even gonna send you the sim and this this is why it's worth it to actually talk to high quality intermediaries and not just surf biz by cell because there's this whole other tier of deals that exists.

17:01The biz by sell is not the whole universe at all. And this never makes it on biz by sell. No, no, definitely not. But it's interesting. The one, it's hard to differentiate with intermediaries like this because they're like, well, we know, you know, the top 200 private equity, you know, buyers who buy tech enabled services like this. And you're not anywhere on the list and you'll never make it on the list. but what I would do to differentiate with those folks is be like give me your weird deals like give me the one that is really odd doesn't check everybody's box like has some hair on it maybe is a really small tam or has like quirky customer concentration or something weird that you just can't kind of crack the code on like send me those think about me for weird deals and that ends up being a service to them because like if, if every, if all their buyers are kind of the same, then you've got to differentiate somehow.

18:01So there is a model where somebody without committed capital could go after this. And that's if you were somebody who really understood this space incredibly well, um, you could go to, and you were going to be the operator of it. You could go to a private equity firm or somebody with committed capital family office and say, Hey, hey, let's partner together on this deal. Typically, they will take the majority of the upside. But because you source the deal, because you're bringing kind of a uniqueness in terms of your ability to operate it, you can get an equity stake in the whole thing, a cut in really well.

18:35And there's whole kinds of kind of the co-dealing stuff. Like that's very common for PE firms to do that. It's a pretty standard model and stuff like that. So I'm not saying somebody without committed capital couldn't do this deal, but you have to have committed capital to talk to, talk to the folks. You're going to have to figure out how to get committed capital before you can actually look at it. That's what I'm saying. Yeah. Yeah. You can't BS these guys. Even when I was doing a buy side work with committed capital, like they are going to drill you with questions. They want to know, you know, exactly how much money do you have?

19:12How much have you called? How much has been deployed? Like they're, they're going to drill you on it for sure. And if you don't have committed capital, like the, you, you go to the bottom of the pile and have got to find some way to like call yourself back in because what they're used to hearing is, oh no, like I have some loose, like I have investors, you know, I have some like loosely committed capital and they're like, nah, no, they, they want to hear we're on fund nine. Yeah. Uh, we've in funds six through seven. We, we did deals like this. uh i'm i'm an i'm an expert you know principal and i'm under this partner that's done this deal this number of times and the founder of the firm is aware of our strategic effort here we have a thesis and uh yeah and we're we're gonna do some expert calls this week on this particular company can we sign the nda that's what they want to hear yeah these guys also won't bs like if you called one of these folks at the bottom they won't bs and they'll just straight up tell you like yeah we're getting indications that this is going to trade for like nine, nine turns or more.

20:13So like, just like, are you prepared for that before we send you the NDA? Yeah. Yeah. Well, they're going to look at your, you know, whatever one man capital website and there I go. Yeah. Be prepared. Can you bid nine times all cash? Yeah. But this is a, this is a good one mills. I mean, I, this is going to trade for a big number. Can you, I mean, I, I would be a little nervous because it says experience, founder-led management team with deep domain expertise and specialized freight, if they want to bail out and go to the beach after this, I'm a little nervous. So like if I'm private equity, I'm probably tying these guys up.

20:50You know, I'm going to make them roll equity. I'm wanting to stay on as the management team, et cetera. If you just buy this and you're a searcher, which we discussed probably wouldn't happen, and you let these guys walk, you're suddenly a fish out of water in a quasi-complicated industry. Yeah. That runs on a lot of relationships and, you know, hey, I'm willing to work with you because you've sent me good lows in the past and you're good for it and all that stuff versus, hey, who are you? I don't know you. There's also, it's also, you know, reminds me of the thing that Brent B. Shore has said a lot, which is that a lot of times small businesses are small for a reason.

21:27And a lot of this, this is just a better business to be in that these guys are in, right? That's why, you know, that's why they've gotten bigger and they've executed really well. But some of these other businesses we look at, no matter how well you execute, there's no way you're showing this kind of growth and this kind of size. It's just so important what business you're in. Which is why a private equity firm would love this because it's not asset intensive. It's tech enabled. It can scale incredibly fast without costing that much money. Yeah, and especially if it's a new platform for them, they can just go roll up other specialty freight brokerages because there's got to be, for everyone that's this big, there's got to be dozens that are a third the size or a quarter the size.

22:06Yeah, this is a good one. All right. So let me point the maybe obvious thing because none of us have been in this industry. There may be something that we're entirely blindsided on that makes this just a non-starter or a reason this person's selling. So I want to put that caveat out there. I've seen myself be so excited about a space like this. And then somebody calls in, they're like, well, let me tell you, actually, there's this one thing happening that's totally going to screw this whole business up and you should know about it. So one of our listeners may do that. I am willing to show that level of humility that I know nothing about freight brokerage.

22:41But I like it. All right. If you guys like this one, we have done, how many episodes are we on? Who knows? 400? 7 ,000. Something like that? 7 ,287. That's the reviews, Michael. You're getting it confused with the reviews. That's the five-star reviews. That's how many people love us. If you are one of those people who have not yet left us a five-star review, we would really appreciate it. on Spotify or iTunes or wherever you listen to your podcasts. Subscribe to us. We do two episodes a week. We also email them to you if you would like, acquanon.com. If you aren't in your Spotify app all the time, we'll email you little summaries of them as well as just kind of cool things that are going on in the world of small business M &A.

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