Jun 22, 2022
Buying & Revitalizing Business in America w/ Jason Azevedo
- BRT S03 EP27 (126) 6-19-2022
Things We Learned This Week
- MRCA is a private equity firm buying business, running and upgrading them for 7 years, then selling to the employees, have investors in MRCA
- Jason back ground is in manufacturing, been running business 20+ years - Father worked in factory, manufacturing. Realize difficult challenges, in the People business – trade labor for product.
- Seller Profile - Sellers are baby boomers, age 70’s, Kids told not to take company - Not many buyers for this type of business, not a franchise, stand alone business, Companies are staple of the town
- ESOP out to employees for them to buy the business from MRCA – timeline of 5-7 yrs.
- Charity Work: Breast Cancer charities, “Goals for a Cure,” a nationwide, top ten ranked non-profit soccer tournament that attracts teams from countries across the globe
Guest: Jason Azevedo, Chief Strategy Officer at the Manufacturing Revitalization Corporation of America (MRCA)
https://www.linkedin.com/in/jason-azevedo/
Jason created his first manufacturing company with just $600 when he was only 15 years old. At this young age he was able to establish business with some of the greatest companies in the world such as Starbucks, Nike, Disney, Marvel, Volkswagen, Audi, Lucas films, dodgers, NBA teams. By the time he was 20 he was already making millions in revenue.
Jason is one of the most dynamic people you will meet. He owns and operates the last standing MADE IN AMERICA factories (IN CALIFORNIA NO LESS!) and has hatched a plan to give back the factories and some of his wealth to the American workers.
In 2009, Jason co-founded Mosaic, taking on the role of CEO — his talents are far beyond running the company, with duties touching conceptual development, engineering, and deployment. Since 2009, Jason’s been at the helm of growing the company year-over-year, acquiring several entities, and creating several others to round out manufacturing efforts. His emphasis on Made In America is a driving force for how the various companies he’s co-founded operate. He also assists with business development and client strategy and is an integral part of how we operate.
Majoring in Entrepreneurial Business, with a minor in Marketing from San Jose State University, Jason has had his heart in business development since an early age, starting a very successful apparel company that grew from humble garage beginnings to annual gross billings of over a million dollars.
Personal interests range from riding dirt bikes, to beach volleyball, to whiskey tasting. International travel weaves its way in there, too!
MRCA.net – Private Equity Firm
Chief Strategy Officer at the Manufacturing Revitalization Corporation of America (MRCA), which seeks to breathe new life into American manufacturing, buy legacy co’s, then sell biz back to community
Charity Work: Breast Cancer charities, “Goals for a Cure,” a nationwide, top ten ranked non-profit soccer tournament that attracts teams from countries across the globe
Notes:
MRCA is a private equity firm buying business, running and upgrading them for 7 years, then selling to the employees, have investors in MRCA
Manufacturer by trade, past business were manufacturing business in USA
2007 -15 yr. old started biz with brother. Father worked in factory, manufacturing. Realize difficult challenges, in the People business – trade labor for product.
Build control panels to kid’s toys
Buy legacy companies – no succession plan
Manu - do not need education, training on site. Promotion opportunities.
Keep companies in local community.
5-7 sell through ESOP to buy existing business, not turnaround.
Keep management and staff
Track record – buy and sell companies, Original business in CA, now in TX.
Understand the community and mentality of business and culture looking to purchase – ie - Hunting season in Arkansas, everyone takes 2 days off
MRCA located in Texas, contacts and staff in FL, CA
Buy business, put in portfolio - Conglomerate all businesses in MRCA portfolio
Seller Profile - Sellers are baby boomers, age 70’s, Kids told not to take company
Not many buyers for this type of business, not a franchise, stand alone business
Companies are staple of the town, local people are the employees, keep as much consistency as possible, do not change name of the business, keep most of the team
Lead Sources - Craigslist, business brokers – check 200/week to find handful of options / deals
Prospecting business to purchase, 10 are reviewed and maybe buy 3
Valuation of business to buy: EBITDA line - $1 – 10 million, buy at 2x or 3-5 x’s EBITDA
ROI – 50-100% in year, 2-3x ROI overall
MRCA team will improve certain aspects of business
ESOP out to employees for them to buy the business from MRCA – timeline of 5-7 yrs. Overall, 2-3 yrs to get leaders set in company, stay on board. Sometime have to hire a CEO.
Honest communication – in Mgmt, determine goals of the team
Labor and CAPEX are cost silos – money must be allocated for upkeep
Don’t trade resources for profit
Jason charity work: Youth soccer club – Goals for a Cure Charity in CA
Breast cancer, preventable, so he teamed up with a hospital – free checkups
Mammogram screening, classic Donation of time and resources
Travel Schedule – Jason is all over the country at times traveling or on phone calls of different time zones talking with acquired business or potential deals
BRT Clip from Seg. 2 of 2/6/2022
Topic: Adam Coffey - From Private Equity to The Exit Strategy Playbook
- Adam Coffey past experience in Private Equity (PE) puts him in a unique position to consult on buying, selling and running business from Purchase to Exit
- Buyer Types – Strategic and Financial - Light On / Lights Off, what to do with the old business that was bought
- Prepping the Business for Sale – takes 3 years, organization setup, due diligence prep, financial info
Full Show: Here
BRT Clip from Seg. 3 of 2/27/2022:
Topic: M&A from the Deal Room to a Science w/ Kison Patel
Guest: Kison Patel, Founder and CEO of DealRoom
Websites: https://www.mascience.com/
- Process of Valuation – old process of value may not apply, have to adapt
- Agile M&A – use software to keep real time updates in an M&A deal
- Deal Room – founder story, realized problems in industry, fix problems to Maximize sale value, then Prep business for sale
Full Show: Here
Business Topic:
https://brt-show.libsyn.com/category/Business-Consulting-Bus+Lessons-Management-General
https://brt-show.libsyn.com/category/Private+Equity-Valuation-MandA-Franchise-Business+Broker
Investing Topic:
https://brt-show.libsyn.com/category/Investing-Stocks-Bonds-Retirement
‘Best Of’ Topic: https://brt-show.libsyn.com/category/Best+of+BRT
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