250 Hampton Newsletter

Friends of 250 Hampton,

October was a busy month for 250 Hampton and the Olson family. I am excited to announce that my son, Jack, made the middle school competitive robotics team as a 6th grader, which is a hard thing to do. He set that goal for himself back in 4th grade. It’s amazing what setting a goal and writing it down can do to focus the mind. That’s a good reminder for us all as we come into the last couple of months of the year and continue to prepare for 2025.

November marks the beginning of month five of my search and, while there are a lot of ups and downs in this work, I remain optimistic. Just today I had two really interesting opportunities come across my desk. Like a lot of things in life, perseverance is critical and I intend to persevere through this search process.

Without out further adieu, let’s get to the details on the search.

The Search

Deal Flow

In October I was able to take a first look at approximately 15 businesses, a much slower month on the deal sourcing side than is typical at 250 Hampton. The reason behind the decline in deal sourcing was an increase in due diligence on two opportunities (see Active Opportunities below).

Both opportunities are very interesting and I have been modeling scenarios for both throughout the last month. I fully expect one of these businesses to be under LOI in November, though that doesn’t mean that I can stop sourcing so I will continue to balance diligence and sourcing efforts in November.

Active Opportunities

I am engaged in initial due diligence with two businesses at this stage of the search.

1. New D2C manufacturing/product business from my network (mentioned last month)

2. Medical device and products distribution business focused on cardiology

A Q1 2025 close is feasible for the above businesses and that is the timeline on which I am managing them.

Closing the Loop

Highly engineered custom plastic parts production: Given the liabilities the business holds, and the unwillingness of the owners to execute an asset sale, this opportunity was no longer feasible to execute and is officially closed.

Medical device manufacturing and design (complete with patented products): Pricing negotiations with the owner reached a point at which my price was half of what the owner needed for retirement. Ultimately, the owner decided to continue to run the business for a few more years and I helped the owner set some targets that would allow the owner to achieve the stated retirement goal. I will continue to keep in touch with the owner and I still like this business.

Manufacturing and design of devices that serve the service station market: After modeling the business it became clear that there was too much revenue risk in the business for me given the amount of cash flow generation the business has shown it is capable of. This opportunity is officially closed.

As I mentioned, I am still actively sourcing opportunities, so if you know any owners that are looking to sell and retire, or if you have folks in your network (CPAs, accountants, financial advisors, estate attorneys, etc.) that know these kinds of owners, please consider making an introduction. Thank you so much for your support. I am forever grateful.

Value Add

Eyes

This month I was able to finish How to Read Water: Clues and Patterns from Puddles to the Sea by Tristan Gooley. I love books that provide a window into something that is always around us, but that many of us never notice. This book does that incredibly well. I will never look at any body of water, including puddles, the same way again. The amount of information you can glean if you know what you are looking for/at is incredible. For example, Gooley discusses the way that pacific islanders expertly navigate using cloud formations and wave patterns. Who needs GPS?!

If you are looking for a read that will take you out of your everyday and show you what you are missing in the everyday experience of the world around us, this is it. Gooley’s writing is very accessible and his use of narrative will have you continuing to read deep into the night.

Ears

My favorite podcast in October was the Acquiring Minds podcast featuring Gat Caperton, owner of Gat Creek furniture in West Virginia. His story of acquiring a barely profitable furniture manufacturing business in his home state in the 90s and navigating through competition from China and economic downturns is incredible and ties to the theme of perseverance I started the November newsletter with. In addition, Gat is a great storyteller and he will have you captivated. For any of you who like a good business adventure, this pod is for you.

Thought of the Month

In his note-to-self above, Marcus is reminding himself (and us) that change isn’t good and that the status-quo isn’t bad, they just are. The things that happen to us are objective and it is our opinion, our judgement, of these things that makes them good or bad. In this month of thanks (and beyond), let’s make the most of what comes our way and be thankful for the opportunities we have and for the ability we have to maximize them.

Side note: I have been thinking a lot about change lately. The change in my career arc this year is an obvious reason why, but I am also thinking about change because I am working on a new project with Steve Hendershot. The project will take the form of a podcast and it will focus on the surprising or unintended effects of change. If you know someone with an interesting story about how initiating change led to an unexpected result, please send them my way!

That's it for the November newsletter. Look for the next one at the beginning of December. Until then, thank you all for your support. It means a lot.

Best,
Eric