A Vermont machine shop, ten years of ownership, and a 2x exit

The Setup Brian Anderson left a Westchester, NY corporate career to acquire Deco Manufacturing, a small Vermont machine shop specializing in work rest blades for centerless grinding. The seller was a long-tenured owner; the business had ten employees, under $1M in annual sales, and roughly $300K in cash flow. The product line was deceptively complex: a single-product focus that fanned out into thousands of customized SKUs. Anderson commuted four hours each way during the early years, eventually moving to a 1.5-hour daily drive after a Connecticut acquisition four years in. The Deal Closed for just over $1M, a 3.1x multiple on cash flows. Capital structure was unusual for a search-style deal: mostly the buyer's own equity with a small seller note and no bank debt initially. The intent was to keep optionality and avoid SBA covenants on a small, lumpy revenue base. First Three Years (Growth Phase) 50% sales growth. Capital expenditures, headcount additions, and a steady cadence of small-account wins. Anderson treated the business as a learning vehicle, building tribal knowledge of the customer base, the production constraints, and the specific machinist skills that drove output. By Year 3 the shop was capacity-constrained in good ways. Year 4: The Connecticut Mistake A distressed competitor in Connecticut became available at a price Anderson described as "real dirt." He acquired it, then made the strategic error that defined the next five years: he shut down the profitable Vermont operation to consolidate everything into the Connecticut site. COVID-19 hit immediately. The tribal knowledge that had taken three years to build evaporated. Productivity collapsed. By 2020 the combined entity was producing less than the Vermont site alone had two years earlier. Years 5-9: The Long Recovery The first COO hire was unsuccessful. The second was the unlock. Process documentation, standardization, and variation reduction. By 2024 sales had returned to 2019 levels but cash flow had not. Anderson worked an average of 80 hours per week across this period and accumulated 360,000 driving miles. His teenagers expressed frustration with his absence; his marriage held but was tested. Operating Lessons - Capital structure should match the business attributes, not the funding constraints. Anderson ultimately concluded that the no-debt structure he chose at acquisition was the right call for a small lumpy manufacturer. - Tribal knowledge in small manufacturing is brittle. Consolidating two sites, even when one is dramatically better-run, destroys the kind of know-how that does not document. The Vermont shutdown was the single highest-cost decision of the hold. - Manufacturing businesses are undervalued relative to the operational complexity of running them well. Low multiples may be fairly priced when accounting for growth volatility and key-person risk. - The owner-operator phase is the schooling. Anderson made his hardest mistakes early because he hadn't yet learned what the business actually needed. Operators considering serial acquisitions should treat the first three years as required tuition.