Justin Turner·March 16, 2023

How I Grew My Holding Company to $75m Across 6 Businesses | Justin Turner Interview

Justin Turner co-founded Traction Capital Partners in Seattle in 2017–2018 and by early 2023 had built a six-business holding company generating ~$75m in annual revenue with roughly 200 employees. The portfolio spans fire-equipment distribution (C Western), off-road accessories (Swag Off-Road), asphalt paving (Tony Lind Paving), a disaster-restoration franchise (Spokane, WA), asphalt grinding (Ground Up Road Construction, an off-market vendor acquisition), and a direct-to-consumer mattress brand (Stumptown Mattress). Traction's model is permanent-equity, operator-partnership focused: four of six prior owners remain in day-to-day roles, and Traction's value-add is adding systems, back-office infrastructure, and a support team rather than replacing management. The standout success is C Western, which more than doubled from $15m to ~$37m revenue after ERP deployment and pricing-tool buildout. The biggest stumble was Stumptown Mattress, where the team failed to adequately discount the COVID earnings bump and then faced a consumer discretionary pullback. Key ongoing challenges include owner-dependency across several businesses, blue-collar labor shortages (especially in paving), difficulty hiring controllers, and a more competitive deal market as more capital floods the lower-middle-market.

Deal facts

sde ebitda: target range: $1m–$5m EBITDA
revenue: $75m total portfolio revenue (2022); individual businesses: C Western ~$36–37m, Ground Up ~$13–14m, restoration ~$10.5m
notes: Six total acquisitions; first closed October 2018; two new acquisitions closed two days apart in January 2023 — a disaster restoration franchise (Eastern Washington) and Ground Up Road Construction (asphalt grinding/soil stabilization, off-market via attorney referral). Portfolio of ~200 employees across six businesses. Target geography: western U.S., Colorado and west.

Why this business

Justin and his team at Traction Capital focus on companies in the western U.S. with $1–5m in EBITDA, aiming for long-term sustainable cash flow growth rather than a compressed hold-and-exit cycle. They look for businesses with strong teams already in place, seek to partner with owners who want to stay involved, and believe there is a lot of opportunity to build systems and infrastructure in lower-middle-market companies that allow them to scale.

What's working

C Western (fire equipment distributor) grew from ~$15m to ~$36–37m in revenue over ~5 years, driven by deploying an ERP system, building pricing tools for the sales force, and streamlining order intake — in addition to preserving the existing team's customer-service culture.
Retaining prior owners as operating CEOs in four of six businesses has provided continuity and domain expertise while Traction adds systems and back-office support.
Buying the largest franchisee in the disaster restoration system positioned them as a credible buyer for struggling franchisees and Greenfield territories, giving a built-in pipeline of add-on acquisitions.
Vertical integration of the paving and grinding/soil-stabilization businesses (Tony Lind Paving + Ground Up) expands capabilities to pursue larger infrastructure projects.
Differentiating to institutional franchisors by emphasizing multi-decade hold intent and operator-first partnership — not a private equity exit timeline — helped win the restoration franchise deal over competing PE groups.
The off-market Ground Up deal came through an attorney referral network, demonstrating the value of professional relationships even when no broker is involved.

What's hard

Stumptown Mattress underperformed — they did not fully normalize for the COVID-19 revenue bump when underwriting the deal, and consumer discretionary spending pulled back sharply starting Q2 2022, resulting in revenue down ~10–15%.
The restoration franchise acquisition took roughly six months from LOI to close — well beyond their 90-day target — due to the complexity of the FDD/franchisor approval process and the learning curve of buying into a franchise system for the first time.
The off-market Ground Up acquisition, while ultimately successful, lacked an intermediary to buffer hard conversations and to educate sellers on market pricing and deal structure; working-capital targets and diligence data-gathering were stressful for both sides.
Tony Lind Paving had significant employee turnover — workers left for what they thought were better opportunities — making it difficult to staff crews and keep projects on schedule. Several employees have since returned.
The business remains dependent on owner-operators in multiple portfolio companies (Tony Lind still needs to be transitioned, Scott at Ground Up will eventually step back), creating key-person risk across the portfolio.
Hiring for controller and senior finance roles has been very difficult; three or four open controller positions at the time of recording.
Rising interest rates have pushed up the cost of debt without a corresponding reduction in seller price expectations, compressing buyer economics.
The lower-middle-market is getting more competitive: independent sponsors, smaller PE funds, and searchers are all converging on the $1–5m EBITDA deal size.

Notable quotes

I don't know if I could tell you specific dollar amounts that we were projecting. I would say like if you told me at 29 when we started that this is what would be five years later I would blown out of the water.

A lot of people talk about finding proprietary deals and I think they're certainly out there. I'm not convinced that it's an easier process for the buyer or the seller if you go that route. I think intermediaries play a really valuable role in that process.

It can be really lonely when you're at the top of these businesses and you don't really feel like you have people around you who are as invested in what happens with the business going forwards.

You've got to remember that they're people and treat them like people, treat them how you want to be treated. It's hard to come down market and have the same expectations that you would have for your team.