Jules Brenner·January 31, 2023

Acquiring a Manufacturing Business after 2.5 Years of Research | Jules Brenner Interview

Jules Brenner is a mechanical engineer and former startup operator (Bay Area EV and industrial tech) who spent 2.5 years searching before acquiring American Sheet Metal (ASM), a ~20-year-old custom sheet metal fabrication shop in Anaheim, California specializing in public infrastructure supply — highways, bridges, drainage systems, transit stations, and architectural metals. His search began in March 2020, was disrupted by COVID which killed early aerospace targets, and included a painful near-miss on an East Coast lighting manufacturer (~$3M EBITDA) that fell apart after LOI despite 100-200 investor conversations. After connecting with advisor Sam Rosati, Jules shifted his approach: work exclusively with brokers, simplify deal structures, and widen his tolerance for imperfect businesses priced at a discount. ASM fit because it maxed out the SBA loan, carried strong public-sector backlog with infrastructure tailwinds from the Biden bill, and had a seller with deep transit-agency relationships. Post-close, Jules moved fast — renovating the office, migrating to cloud/ERP systems, and growing headcount from 15 to nearly 30 within five months — while simultaneously pursuing bolt-on acquisitions under a roll-up brand (Industrial Succession) targeting $100M in combined revenue across industrial manufacturing, services, and logistics.

Deal facts

sde ebitda: near SBA max (ebitda described as 'maximum size for an SBA deal')
financing structure: SBA loan (maxed out) + seller note
notes: Business: American Sheet Metal (ASM), Anaheim CA (Orange County). ~15 employees at acquisition, grew to 27-30 within first 5 months. Business was ~2 decades old; seller had owned it ~15-16 years. A prior failed deal involved a lighting manufacturer doing ~$3M EBITDA. No specific purchase price or revenue stated for ASM.

Why this business

Jules wanted to modernize an old-age industrial business without starting from zero. He was drawn to manufacturing because of his mechanical engineering background and startup experience in industrial tech. He targeted sheet metal / infrastructure manufacturing in Southern California specifically because the seller had brought substantial public infrastructure contracts (highways, bridges, train stations) into the business, the Biden infrastructure bill was directing billions into SoCal, and the business maxed out the SBA loan while sitting in a growing industry. He also saw strong personal alignment with the seller — both were New Yorkers who moved to California with engineering backgrounds.

What's working

Strong backlog from public infrastructure contracts (highways, bridges, drainage, transit) providing near-recurring visibility into future revenue
30%+ year-over-year revenue growth continuing post-acquisition, with further tailwinds from the Infrastructure Investment and Jobs Act directing large sums to Southern California
Quick modernization: office renovation, cloud systems, new ERP, elimination of paper — implemented within first few months
Rapid headcount growth (15 to 27-30 employees) to meet demand without losing customers
Roll-up strategy: using ASM brand and track record to pursue bolt-on acquisitions of other sheet metal and industrial businesses
Seller's pre-existing relationships with transit agencies and general contractors gave the business a durable moat in a relationship-driven industry

What's hard

2.5-year search was longer than expected; COVID killed early aerospace targets, the 2020 election added further volatility
First serious deal — an East Coast architectural lighting manufacturer doing ~$3M EBITDA — fell apart after LOI when sellers changed their minds, after months of investor outreach to 100-200 investors
Self-funded search meant operating without management fee income and having to personally fund the search process
Manufacturing deals are harder to fund with equity investors (lower margins, high capex, slower growth) — traditional search funds largely rejected the thesis
Project-based revenue (not truly recurring) required careful underwriting and accepting lower multiples to compensate
Rapid growth created operational chaos: juggling customer demand, headcount scaling, system modernization, and transition simultaneously
Proprietary (off-market) deals repeatedly failed — sellers lacked a broker to manage expectations, resulting in advisor conflicts and failed closings
Sellers consistently had firm price expectations and could not be beaten on valuation; complex deal structures scared them off

Notable quotes

I really liked having the ability to modernize the industry but I did not like how long it would take to go from zero — finding those customers, convincing them of some new age thing — it's all really slow and I wanted to jump into the driver's seat of operations faster than that.

Optimize for certainty of close. I think a lot of people get too fancy in the industries and the specifics of the companies.

If you think about team on the seller side, most of the team in a proprietary deal is not your friend. Their accountant — if there's no broker — they want them to stay a client as long as possible, so they're going to say whatever they need to say to keep that client and the deal to not get sold.

You think you won, you think you're smart, but then you end up playing at the same outcome — you just wasted six months that you could have been in the driver's seat.