The Fastest-Growing Factory You Can Buy Online

0:00Hello, everyone, and welcome back to another episode of Acquisitions Anonymous. This is the Internet's number one podcast on buying, selling, and operating small businesses. I am one of your hosts, Bill D 'Alessandro, and today I am with Michael Girdley, Heather Anderson, and Chelsea Wood from Acquisition Lab. And we are talking about a very cool deal. It is a manufacturer in the heartland of America, and they make ovens for powder coating and seracoding metal products. So this is kind of your classic made in America manufacturing. They make ovens that go into other manufacturing processes. This business has$2.7 million of EBITDA on about$5 million of sales.

0:43So incredible margins. It's a manufacturer. It is also a good candidate for an SBA Perry Pissu loan. So we get into some very interesting details around that with Heather about how to structure one of those. It's also an e-commerce business from our friends at QuietLight. So just love this deal. A lot to talk about. I think you're really going to enjoy this episode of Acquisitions Anonymous.

1:04Acquisitions Anonymous:We'll set Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100 % beers anymore. Thumbs down on just the plus inventory. This episode of Acquisitions Anonymous is brought to you by Quiet Light Brokerage. And I'm sitting here to tell you I have both sold businesses with Quiet Light and bought businesses from Quiet Light. And in my opinion, they are extremely high quality people, very, very rigorous, and they're really straight shooters. One of the things that differentiates Quiet Light is every single broker at Quiet Light has been an operator. They have been an operator of an active business and they have sold it.

1:44Many of them have also bought businesses. So they really understand what it means to be in the seller's seat and how important that is to you. And they also really understand what it means to be in the buyer's seat. So they don't BS you, but they really do know how buyers think. All of the transactions I did with Quiet Light, in fact, one of them, they took over a sale process that another broker had not been able to get done. And they got it done for me inside of 90 days. So I've had very positive personal experiences with Quiet Light. And I do recommend them wholeheartedly to a lot of people.

2:14and now they're a sponsor of the podcast. So one thing you can get for free is if you head over to quietlight.com, they will do a valuation clarity call with you, which is not a sales call. They're not pushy people. They'll just kind of tell you, hey, here's what your business is probably worth and here are a few things you could do to make it worth more. And hey, maybe don't sell it right now. Do these things, come back to us in six months and you'll get a much better multiple. So if you're thinking about selling your business or you're thinking about buying a business, especially in the e-commerce space where they're very, very strong and been doing this for over a decade.

2:45Go check out Quiet Light Brokerage over at quietlight.com.

2:49Acquisitions Anonymous:All right, can I tell you guys something awesome? Let's hear it. So I drive a 2017 Subaru with 100 ,000 miles, mostly because I refuse to go into car dealerships. I hate dealing with car dealers because it feels like you lose every time. But anyway, so like last week, it started vibrating like heavily when I was driving and like it would have this like vibrating thing. So my son, who's amazing and 20 years old, I said, hey, why don't you take a look at it? And his hobby is to renovate and repair cars. He discovered it was the radiator fan and went and ordered the part on the internet. It showed up.

3:23Acquisitions Anonymous:And then today he replaced the radiator fan in our garage. So it would have probably been like a thousand dollar expense if I took it to a dealership or whatever. He just did it for 120 bucks. Nice. That's awesome. And he sleeps in our house and eats our food. Did he use AI to teach him how to do it? Does he? Yeah, he just figured it out. But he says he uses ChatGPT and that sort of stuff to look at the items that he wants to have done. So he double-checked it with this. I've been amazed at how you can take pictures of things and upload them to, I use Claude, upload them to Claude, and it'll tell you what's going on.

4:00It walked me through fixing my furnace. I saw that. It was crazy. It kind of almost went viral for that, Bill. Yes, for the dehumidifier I put in my girl's place with the help of Claude.

4:12Acquisitions Anonymous:You're going to die. No, it's working. That was the internet. It's working. It's so cool. Yeah, the HVAC bros were very mad at me because they thought they were safe from AI, but they're not safe. Nobody's safe. But it's very cool. If you are at all DIY inclined and there's something in your house, you literally just take a picture of it and put it in Claude and go, help me fix this. it's very good. Like bikes, appliances, anything. It's very cool. I don't think it can help me. You might be too far to hunt, Heather. It's true. It's true. You would be. Oh, the leg looks broken. Fix this. So Bill, you have a clawed bot installed at your house.

4:56Acquisitions Anonymous:I do. Like an open clawed bot. Do you, ladies, either one of you have one? Nope. This will blow your mind. You got to do it. I know. But every, every weekend I think, maybe I'll play around with it and then I find better things to do. Like I have mine connected to my Slack and I'm like, hey, here's this business problem I have. Solve it for me. And it'll be like, be right back. I'm going to work on that. And then it solves it for you. He's like, okay, I created a cron job. Every day I'm going to do this for you. And then let me know if it doesn't work and I'll change my algorithm. Like it is ridiculous.

5:26Acquisitions Anonymous:It's really cool. All right. It's really cool. Once Heather hooks it up to her email, then I'll say, attention, Heather bot, give me a loan. everything underwrites it's great simple it sounds great love it approve the loan um i do so heather i actually do have a friend doing underwriting with ai this is pretty interesting uh they he owns a consumer lending company and they're they're like a debt consolidator so they're you know very frequently underwriting consumers and there's a big underwriting package check a whole bunch of boxes um and he had a team of 20 people doing underwriting. And he recently dismissed almost all of them and has replaced the underwriting process with AI.

6:10Because as you can imagine, there's like a package and a checklist, right? And he said the thing that converted him was when his human underwriters had approved a loan, but then they were trialing it and passing it back through the AI and the AI rejected it. And they figured out the AI rejected it because there was a utility bill in the package that looked normal, but the logo of the utility, that utility did not provide service at the address. It caught fraud, basically. And yeah, it was a fake utility bill, but a human would have never caught it, ever. That's pretty convincing. Here's what I would say in the small business space where I remain a little unconvinced or skeptical.

6:53It's garbage in, garbage out still. And I think the main thing that we do in small business deals is sort through what is, you know, actually reliable information versus what is probably not. And I don't know how to teach Claude to do that, but maybe I should learn. Maybe I should. I think, I think underwriting a business loan is orders of magnitude more complex than underwriting a personal loan. You know, just validating documentation and checking boxes. I think hopefully you and all of us are safe for a little while longer when it comes to evaluating investments in business. A little while. Yes.

7:28Well, speaking of making investments in businesses, I found a fun one today. It is from our friends over at Quiet Light Brokerage. So this is an e-commerce deal, but there's more to it than that. So you guys want to hear it? Yeah. All right. So this is, of course, an SBA pre-qualified with Perry Pissue, which is an interesting wrinkle. So Heather, I'm going to have you expound on that later. SBA pre-qualified with Perry Pissue, made in the USA, a powder coating and Cerakote oven manufacturer, $2.7 million of SDE and 5.6x revenue growth. So this thing's growing really fast. It has$4.8 million of revenue and$2.7 million of income, which is pretty impressive.

8:16Better than 50 % margins. They're asking 3.95x for it, 4x, which makes it 10.95, just under$11 million for this business. It says the company designs and manufactures curing ovens and spray booths for the powder coating, ceracoding, and related finishing industries. Founded in 2016 by an engineer turned entrepreneur with a background in mechanical and electrical engineering, the company builds entirely in the U.S. and ships to customers ranging from garage hobbyists to Fortune 500 industrial operations, among them SpaceX, Lockheed Martin, Western Digital, and Caterpillar, with NASA placing its first order in March 2026.

9:00How's that for a customer list? Wow, this is sounding good. With over 80 SKUs across build-to-order and in-stock configurations, the company offers one of the broadest catalogs in the space, refined over nearly a decade of customer feedback. The company has compounded revenue nearly 5.6x in five years from$860k in 2021 to nearly$4.9 million TTM, generating a TTM SDE of nearly$2.8 million and an exceptional 57 % SDE margin. That growth was achieved on advertising spend of just over 1 % of revenue, in case you were not already excited. Built on dominant organic search rankings in a niche where new entrants rarely survive, a new owner acquires this proven cash-generating operation, with paid advertising, outbound sales, and social media still largely untouched.

9:54Pre-qualified for SBA 7A financing up to$5 million, qualified buyers may also potentially access an additional$2.5 million to$3 million in peri-pusu conventional lending beyond the SBA cap. the business processes over 80 of orders through a fully built e-commerce storefront without a salesperson supported by a six-person production team managing manufacturing from cnc cutting through final assembly and freight so they manufacture it seems like they manufacture their own stuff with a six-person team here in the states pretty impressive the acquisition transfers cleanly a lead manager is in place the seller commits to a smooth transition and the business carries no outstanding liabilities or legal matters.

10:33With a warranty claim rate under 1 % and an uninterrupted growth through COVID and the 2025 tariff environment, the company offers a durable cash-flowing foundation with several immediately actionable paths to growth. Again, this is listed by the folks at Quiet Light. Pat Yates is the advisor over there. What do you guys think about this business?

10:56Acquisitions Anonymous:Chelsea, have you run into a business like this before? If so, do you know what they do what do they do you expect it to be like i'm an idiot i am super fascinated because i've not seen a manufacturing company presented as an e-commerce company before and so this is just a new positioning strategy that i'm not familiar with right um i think i get it right because they're selling things through an e-com platform but in my brain I'm having a hard time positioning it as not manufacturing and I have like a thousand questions about manufacturing but it sounds like this is an oven maker and spray booth yeah so powder coating and cerakote is that like the you if you want to like paint something and like so something that's metal if you want like a coating on it like a durable coat like much more durable than paint yeah so like like walker owns a company that does powder coating um like for the steel for awnings right and so it just makes the steel last longer when it's dipped in powder but this isn't selling that right this is selling the booths and the ovens that they use to apply the powder coating and i guess to set seracoding which i don't to bake it on basically yeah right so you'll think you would dip you would either dip it in powder or dip in cerakote which i think is the liquid version of power powder coating uh and then you would bake it in this oven yeah it's like that's what i think so to me i'm picturing like spray tan booth but like industrial version um and like a giant bat of like that they dip things into and pull things out of.

12:42And so, but it's a, so they manufacture those things, which is a great niche. If I'm thinking about it in a manufacturing sense, the whole positioning of it being e-commerce and all that's making my brain get a little itchy. And so I just am very curious, right? Because manufacturing historically, at least in my experience, the sales can be hard, right? Because it's kind of, those are relationships that are owned a lot of times by the owner. It's not super clear where to find, depending on how niche the product is, how to find key decision makers of your product. And it sounds like this is, are there sales channels, right?

13:18Other than the website? I think it's e-com. I think it's, they're just have a website and you can buy a powder coat oven on their website. And so they're, one of the things they said, right, was that social media, outbound sales and paid advertising are still untouched. and and so they're leveraging organic search so basically they're just man they just are using e-comm to manage sales like is it just basically like an online payment system um or are they i'm sure it's a i'm sure it's a shopify store you know i think it's a shopify store and it says they have 80 skews so you probably just can go on their website which you find through organic search and you figure out which model you want you add to cart and then you check out and then they mail So the idea of this paid, so this is what scares me about these kind of ads and not saying anything that quite I did anything, but using the word of like paid advertising, outbound sales, social media, untouched.

14:17Like those are all the things that I feel like people are told to look for. Like, oh, it's just a switch I get to turn on unless suddenly this business is booming without paying attention to whether or not those strategies are strong conversion channels for a type of business that you're buying. And so manufacturing historically, like how many people I'm curious are searching for the 80 SKUs that they're selling? Like, is that something that happens or is it going to be more about maintaining relationships with their current? And like, how do you find new people that need curing ovens and spray booths?

14:48So I don't know. I am fascinated at the sales channel. They really didn't describe what it is. They tell you what they're not doing, but they're not telling you exactly what is driving this really tremendous growth. So that's fascinating. I would want to learn exactly what is working here and why. But I'm also a little concerned because of what they make and the kinds of clients that they're listing, that they probably have some customer concentrations, you know, that a lot of this growth has come, you know, maybe somebody at SpaceX and, you know, a couple of these other companies found them and went, oh, great, this is easy.

15:27We'll order what we need here. And, you know, they probably have some concentrations. That's my guess, just based on the type of product. I don't, I mean, how many do you need, right? Like, if you're, if you're like an industrial, again, I don't know, they do have 80 SKUs, but I imagine if you're SpaceX and you're trying to Cerakote rocket parts coming off a line, you probably don't buy this one. You probably buy an industrial scale one that integrates with your line, et cetera. Because this says they also sell to hobbyists, like garage hobbyists. You know, I would think maybe SpaceX has bought a couple of these, you know, for their lab, for their benchtop lab or something like that.

16:08But I wouldn't, I don't read this as we sell big machines to big companies. I read this as similar to like we sell 3D printers online. Like This is probably a$1 ,000 conversion, maybe a$3 ,000 conversion, and it's the size of a microwave is sort of what I'm picturing here, a large microwave. That's what I'm thinking, a benchtop type thing.

16:34Acquisitions Anonymous:So do we think that this is one times revenue, like you sell the machine and the customer's gone, or is there some ongoing revenue stream? Because a lot of these businesses, and maybe Chelsea, you know, you've seen more of these than I have for sure. like a lot of them almost do the razor razor blade model where they sell the machines that are relatively low margin but then they kill you on the replacement parts by the way all the auto dealers do this too i'm learning that especially when the fan broke in my subaru so what um you know what is that going on here or do we think it's just a one and done kind of situation i think this is one and done here's why i think that quiet light is a very competent broker and And if there was a razor blade model going on here, they would have mentioned it.

17:20Because that would have made it much more attractive. So these are durable products that you sell once and you've got to, so your marketing channel really matters a lot here then because you don't have reoccurring revenue, really. Correct. And the names that they're naming are impressive, but they're also typically companies with very specific decision-making processes, right? So you're talking contracts to get into their supply chain. And so I also, with manufacturing, one of the biggest things you need to check on are if they're standing contracts, right? And if those contracts can transfer on ownership changes.

17:56And so does it tell us what the average order value is? It doesn't say. I would expect, I mean, I've done some Googling. We don't know what business this is. But there's this one built American equipment. and they've got$3 ,000 Cerakote ovens. There's this other one, Light Armor Ovens, and they're$2 ,000 to$6 ,000 ovens, kind of depending on the size. So that's a lot of units that they're selling then at$4.8 million of revenue. I mean, yes and no, Heather. I mean, I'm used to selling$30 pet supplements. I guess since I don't know this product very well, I mean, that's 1 ,600 units if it's$3 ,000 per unit.

18:40a year, I feel like, wow, I didn't know there was, you know, that much demand. And they did say this is a space where new entrants rarely survive. So they made it sound like it is kind of a crowded space where it's not that easy to achieve the kind of success they achieved, but they didn't really tell us what, you know, they didn't give us a hint about their secret sauce. Yeah.

19:03Acquisitions Anonymous:And that's kind of the fundamental challenge here. It's like, what's unique other than you're the first manufacturer to figure out how to use a website, right? Is this truly something that you have some sort of moat around it because of IP or scale or design? What is it that's giving you these kind of margins these guys have and the belief it's going to stick around? And I don't see it, but maybe you find out later after you sign the NDA. It says a decade of customer feedback and they have a the broadest catalog in the space and so they've right it's like one of two options you're either a niche provider and you carry a very few select SKUs or you carry all of them so that people know that they can come to you for whatever and so they've chosen this I can come to them for whatever model I think I'm just there's not enough information here for me to understand how, why they've nearly doubled.

20:04Like what, how are they doubling? And is it sustainable? Or nearly five X technically, right? In the last five years, it's like the, and Heather, you mentioned it, right? Like we don't actually know what their sales channels are in this company. And so manufacturing historically is not an easy company to buy and then get new clients. It's hard to find key decision makers in the types of businesses that make these small purchases. unless you have an N in this, like, it kind of feels like this person has a little bit of an N because those are pretty big names. Yeah, it could be like a very difficult to transfer business, although they are selling on e-commerce.

20:42So it is hard to, I'm just confused. But what there's a clue to me, the multiple seems kind of low for the EBITDA level that we're talking about here. I was surprised. Yeah, that so. And to your point earlier, Bill, yeah, Quiet Light's a good broker. So, you know, they've priced in some risk, I think. That's what it's telling me. Yeah, or maybe grown really fast. And so people aren't willing to pay, you know, on the very most recent growth. That could be it, yeah. Well, and it's the highest level of periposu lending I've ever seen offered. Heather, expand on kind of what periposu lending is, what they're talking about here.

21:22So this is, they think, going to be an$11 million deal. and tell us how the length kind of capital back shakes out here for dealing right so sba has a limit of 5 million interestingly enough there's a new program that can go to 10 million for certain manufacturing naix codes so i i'm if this broker probably already checked it out and they don't qualify for the for the 10 million they can only qualify for the five so if that's the case then the SBA maxes out at five and then certain banks, and there's only like literally a handful of banks that will do this additional, I'll call it a companion loan.

22:00They call it peri-pusu because that's just how they share the collateral. But the same bank that's doing the five million SBA will do this additional stretch piece up to two and a half million is what they say here. So that combined, you're borrowing seven and a half million from the same bank. It's not two different banks like mezzanine financing. It's the same bank, generally the same terms, 10-year repayment on the 5 million, 10-year repayment on the two and a half. But the banks that will underwrite that extra piece, they're pretty conservative when they do that. They will look for a tighter resume fit, better personal financial statement, your personal net worth and your liquidity.

22:39And they'll just look for the deal to be that much more solid. Everything that they look at in the business. They'll just want it to be a little bit more solid and predictable. So, you know, back to my, what I always say about SBA pre-qualified, it doesn't really mean it's pre-qualified. It's good marketing. It says the broker sort of talked to somebody at a bank and said under certain circumstances. But the reality is the bank needs four things to decide. And they've only got one when they are talking to a broker or maybe two. They've got a little bit about the business, usually not enough. A little bit about the deal structure, not enough because there's no structure that's been reached yet.

23:16But they don't know anything about the personal resume of the buyer or the personal financial statement of the buyer. So the prequalification is pretty flimsy at this point. It just says they've talked to a bank that says, yeah, we might do that under the right circumstances.

23:32Acquisitions Anonymous:One of the biggest risks in entrepreneurship through acquisition is buying a business with fragile systems, unclear demand, or a single owner who holds all the knowledge. Franchising approaches that problem differently. You are buying into an established brand with documented systems, unit level data, and repeatable operating playbooks. The hard part is knowing which franchises are actually worth evaluating. That's why Alex Merezniak, former CEO of 2U Laundry, built Fransi. Fransi is a free platform that helps acquisition-minded entrepreneurs explore franchise ownership without broker bias. You answer a few questions and Fransi shows you franchise opportunities that align with your capital, lifestyle, and long-term goals.

24:05Acquisitions Anonymous:You also get free coaching from people who have actually built and scaled franchise businesses. If you're exploring ETA and want to understand whether franchising fits your acquisition strategy, visit franzi.com. That's F-R-A-N-Z-Y dot com. And thanks to them for sponsoring today's episode. So with the Perry Pissu loan, so you get the$5 million SBA loan. You get, is$3 million the cap on Perry Pissu typically? It's bank by bank. But yes, right now the furthest I've seen a bank go is the additional three. So total of eight. Okay. So, but you have, do you have one loan or you have two loans? Two loans, one$5 million standard SBA 7A and a second$2.5 or$3 million conventional loan from the same bank.

24:52And how do the terms differ between the two loans? They're the same, they're peripositive, same seniority, they're both senior debt, but how are the terms different? Right. So, usually they're both going to be a 10-year amortization. The SBA only lets the bank go with a shorter amortization on their commercial loan if they've got significant real estate collateral. So when there's not real estate involved, they're going to usually be both 10 years. The bank may charge a higher interest rate on the peri-pusu piece because that's a riskier piece that doesn't have an SBA guarantee. But sometimes they'll charge the same rate.