250 Hampton Newsletter

October 2024

Friends of 250 Hampton,

October is here and that means two things:

  1. Pumpkin Spice mania has taken hold of our collective consciousness 😱

  2. It’s time for another 250 Hampton newsletter

Before we get to an update on the search, let me take a moment to note that an updated 250 Hampton website is now out in the wild. Please check it out and send along feedback and suggestions as you have them. What you see now is a first draft, though much better than what we’ll call v0. Now, on to the search!

Deal Flow

In September I was able to take a first look at approximately forty businesses that met my target criteria. Of those, I engaged at a deeper level with four (I.e. NDA, financial data review, etc.) and one of these businesses fit the bill to move on to deeper diligence.

While I continue with my proactive highly targeted search, I have always noted that I would be opportunistic if the right opportunity came along. This month, I was approached by someone in my network with a very interesting opportunity that sits a bit outside my proactive search criteria. Given who this opportunity is coming from, I am very excited about it and I am actively digging in to understand the business. I’ll be sure to provide more details on this opportunity as it makes sense to do so.

Active Opportunities

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

  1. Highly engineered custom plastic part production (multi-generation family owned business)

  2. Medical device manufacturing and design (complete with patented products)

  3. Manufacturing and design of devices that serve the service station market

  4. New business from my network that is just a bit outside of my core criteria, but very exciting

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

Closing the Loop

Custom cable assemblies and wire harnesses: You may remember that I noted I was going to dig into this world in September. I did so and found a couple interesting opportunities. The issue I am finding in this area is that these businesses tend to have an extremely high level of customer concentration. That said, I am still looking for opportunities in this area since the economics are favorable.

Labelexpo Americas 2024: I attended Labelexpo Americas in September (conveniently located just north of me in Rosemont, IL) at the suggestion of a friend and mentor. It was fascinating. The amount of technology and impressive machinery there was truly something to behold. I learned a lot about packaging and labeling during my two days attending Labelexpo and I am now thinking through a thesis for this space that will fit with my overall acquisition size parameters and timeline.

I continue to see solid deal flow and have four quality opportunities in process, but that is not slowing down my top-of-funnel activity. As always, if you know of any business owners looking to sell, or if you have folks in your network I should get to know (CPAs, accountants, financial advisors, estate attorneys, etc.), please consider making an introduction. The best opportunities and connections tend to come from my network and I appreciate all of you.

Value Add

Eyes

This month I was able to finish Seaweed Chronicles by Susan Hand Shetterly. Shetterly uses a number of personal experiences to chronicle the changing seas and how, specifically in Maine, the change is impacting both the folks who earn a living from the sea and the environment as well.

For example, Shetterly deftly exposes the reader to the nuances of kelp farming, something I generally thought was positive, but came to learn has its own intricate management challenges (assuming we want to safeguard nature as much as possible). Given the detailed web of minute creatures (and larger ones too) that rely on seaweed for their own successful reproduction and lives, we need to be careful when determining what we set as a sustainable harvest so as not to push the kelp farming fishery to the brink (and beyond) as we have with so many other productive fisheries over the years.

I also enjoyed Shetterly’s profiles of some of the small businesses that have been operating sustainably for years in Maine. One of them, Maine Coast Sea Vegetables, has a particularly interesting story. I actually went out and bought some of their Kelp Crunch bars to try (available direct or via Amazon). It was fun to try that product after reading about the specific person who makes them day in and day out. I urge you to give the book, and Kelp Crunch bars, a shot!

Ears

Hiring is a topic that I have delved deeply into over the years, especially when I was in positions where I had to make critical hires, make a lot of them, and make them quickly. What you tend to learn is that hiring the right folks is hard. Behavioral interviews, for example, tend to perform as well as blindly selecting people via throwing darts at a dart board whereas interviews that simulate the job as closely as possibly have a high correlation with on-the-job success (seems obvious, I suppose). Well, it turns out that even in the world of CEO hiring, where incredible amounts of time and money are spent, things are still pretty hard.

The Chicago Booth Review produced a very interesting podcast in September focused on CEO hiring. Turns out that hiring practices do not guarantee that the person who wows the hiring committee will succeed in the top job. You can hear more from Steve Kaplan on his research in this area on the podcast.

Thought of the Month

I’ll never be ashamed to quote a bad writer with a good saying.

Seneca, On Tranquility of Mind, 11.8

I love the point Seneca makes above. Wisdom can come from anywhere and anyone. Imagine what you could learn today if you took away superficial things like affiliations, reputations, and the like, and instead allowed ideas to stand on their own merit. If the idea helps you lead a better life, then it’s a good one to leverage regardless of the source.

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

Best,
Eric