Gabe & Kristen Perez·August 12, 2024

One Couple, 4 Kids, and a Business 3 Hours Away | Gabe & Kristen Perez Interview

Gabe and Kristen Perez, a married couple with four kids living in rural Williamstown, MA (Berkshire County), bought Refrigerated Structures of New England (RSofNE.com) — a 30-year-old Lakeville, MA company that fabricates and installs walk-in coolers, commercial freezers, and cold storage doors for restaurants, supermarkets, and distribution centers — in August 2022 for approximately $4.2m (4.2x SDE of ~$1m) using an SBA loan through Live Oak Bank plus a ~12% seller note (half on full standby). Gabe came from a decade in healthcare corporate roles culminating in a painful layoff that catalyzed his search; Kristen had stepped out of the workforce for ~10 years raising their children and struggled to re-enter the job market at a meaningful level. The business is located three hours from their home, requiring Gabe to spend his early months mostly on-site while Kristen managed back-office operations, HR, payroll, and culture remotely — a deliberate partnership structure they credit as essential to survival. The business operates in a niche with only two regional competitors, generates 35-40% gross margins, serves a repeat customer base with no material concentration, and was growing ~17-18% annually toward $5m+ revenue at the time of the interview, with a five-year ambition to reach $15-20m through geographic expansion beyond New England. Both Gabe and Kristen describe the acquisition as personally transformative: Gabe found alignment with his blue-collar roots, and Kristen gained meaningful flexible work; they report their marriage is stronger despite — or because of — the physical separation.

Deal facts

purchase price: ~$4.2m (4.2x SDE of ~$1m)
multiple: 4.2x SDE
sde ebitda: SDE ~$1m
revenue: ~$4m+ at time of purchase (grown from ~$1m when prior owners acquired; ~17-18% growth YoY toward $5m+)
financing structure: SBA loan (Live Oak Bank) + ~12% seller note (half on full standby)
notes: Three sellers (husband, wife, friend) retiring after 7 years owning the business. Business founded 1990, ~30 years old at time of sale. Closed end of August 2022. Gabe joined New Majority Capital cohort during search. ~23 employees at time of interview. 35-40% gross margins. ~400 projects/year, average ~$10k job size.

Why this business

Gabe was attracted by the repeat customer base with no significant concentration, strong gross margins (35-40%) in a niche construction segment with only two regional competitors, no marketing or organized sales process (upside opportunity), cyclicality-resistant demand (essential cold storage across restaurants, supermarkets, and distribution centers), and sellers who were high-character people willing to support the transition. The business fit Kristen's need for flexible, meaningful work and solved both their career problems simultaneously. Gabe also noted a personal resonance with returning to his blue-collar roots.

What's working

Dominant position in sub-$1m cold storage installation niche in New England with only two regional competitors, one of which has since struggled after a PE acquisition and another that was simultaneously transitioning
Strong and stable gross margins of 35-40% driven by pricing power in an underserved market segment
Repeat customer base (Panera, McDonald's, Dunkin, Shaw's, Star Market, Hannaford, Stop & Shop) with no material customer concentration
Door manufacturing (made by hand from scratch) as a brand-building and recurring service entry point
Kristen taking on back-office HR, payroll, onboarding, and operations remotely, freeing Gabe to focus on customer and crew relationships on-site
Profit-share program implemented to align employee incentives with company growth
Demand diversification across restaurants, supermarkets, food processors, distribution centers, and grow facilities smoothing cyclical risk
Growing ~17-18% YoY toward $5m+ revenue, with a target of $15-20m over five years via geographic expansion and a few larger projects

What's hard

Three-hour commute from home in Williamstown, MA to the shop in Lakeville, MA required Gabe to spend the first months Monday-Friday on-site away from family
Live Oak Bank had difficulty getting comfortable with the purchase price given the business's recent growth trajectory and the fact that it was a construction company
Getting Kristen practically involved from 3 hours away required setting up video conferencing infrastructure; early office staff had never done a Zoom call
Spring baseball coaching season while managing the business created near-unmanageable scheduling pressure
Seller note required negotiation with lender (half placed on full standby) to bridge the valuation gap
Transition logistics were extremely time-consuming (changing usernames, passwords, accounts, payroll provider, 401k setup) before any real operational work could begin
Gabe paid what he considers a slight premium (4.2x) relative to ETA norms, though he justified it by believing the business would have been more expensive a year later

Notable quotes

I've almost gone back to my roots of blue collar upbringing — I own a construction company basically and the people I interact with on a daily basis are blue collar and I've you know I feel more comfortable now in the shop than I ever did in a boardroom.

Once that's gone — and it was gone — like I there was I mean in my mind it was like there's doing what I was doing was just as risky as this you know in many ways and for my mental health our financial health you know for a number of reasons and I think um you know deciding to go down the SMB path um I think was just it was just such a clear option once it like really settled in it was like this is the way like this is the only way right.

My calculus was worst case scenario I'm doing like really low level admin work but it's for the business that we own right so like that is the worst case scenario and the best case scenario is that there are ways in which I can really get involved in a business where I can grow my skill sets and be valuable to our family to our future.

We were pretty dead set on the fact that it would not work if I was not involved like our happiness would not be there he there's no way he could come home after a week away and you know fill me in on every detail and for me to understand actually what he was going through like the only way for us to survive this what we anticipated was going to be really hard time was if we were in it together like on the daily like a team tackling the problem.