Two Partners Buy A Utility Supplier Doing 8 Figures With 9 People, Then Grind For Growth

The Setup Danny Fields and Steve Reis ran a partnership search targeting unsexy, cash-generative businesses. Holland Supply Company fit the brief. A decades-old utility supplier with a nine-person team producing eight figures in revenue, it read as a dream on a spreadsheet. Revenue per employee over a million dollars. Long tenured staff. Entrenched customer relationships with utilities that do not switch suppliers casually. The other side of that same coin is what made the deal hard to operate. Average employee age was 55. Institutional knowledge lived in a handful of heads. The prior owner, Craig Wathen, had built a machine that ran quietly on tribal memory and standing orders, not on systems that a new CEO could lean against. The Deal The partners closed in 2019 using a traditional search structure with equity investors behind them. That financing choice is the hinge of their story. A traditional search fund only pays off for the operators and their backers if the business grows meaningfully after close. Flat cash flow compounding against SBA-style leverage can still produce a life-changing outcome for a self-funded searcher. Equity-backed searchers do not have that luxury. Growth is the thesis, not a bonus. Holland was a distribution business with a concentrated customer base and a fixed product catalog. Organic growth in that category does not come from a clever marketing funnel. It comes from adding branches, adding product lines, acquiring adjacent suppliers, or winning share in slow procurement cycles. Operating Moves The first few years were a grind. Revenue inched. The partners described themselves as frustrated. The nine-person team they inherited was productive but capacity-constrained, and the median employee was within a decade of retirement. Any growth plan had to solve two problems at once: generate more output and replace the people generating today's output. They doubled headcount to roughly twenty before making the bigger move. In late 2023 or early 2024 they acquired the assets of another supplier. That transaction was not purely offensive. Part of the rationale was survival and defensive consolidation in a fragmenting local market. The combined entity was on track for around sixty employees by mid-2024, a 6x increase in team size from the day they closed. Operating Lessons - Revenue per employee is a trap metric at acquisition. Nine people producing eight figures is not a sign of a lean machine, it is a sign that the next ten million in revenue will require the ten to thirty people the prior owner never hired. - Match financing to the growth surface. Traditional search fund math punishes flat businesses. If the deal you love is a stable cash cow without obvious growth vectors, SBA self-funded structures let leverage do the work. - Aging workforces are a hidden capex line. Every retirement in a tribal-knowledge business costs six to eighteen months of shadowing, documentation, and hiring risk. Budget the transition, do not assume continuity. - Bolt-ons are the fastest way to break through a slow-growth ceiling in distribution. Route density, product overlap, and...