Matt Huggins·July 17, 2023

How One Tiny Acquisition Grew Into a Holdco | Matt Huggins Interview

Matt Huggins is a former Stanford Neuroscience PhD candidate turned professional online poker player who stumbled into small business ownership in Montana in 2008 when a broker brought him a $1.6m private utility company near Big Sky serving 215 condos with water, wastewater, and cable service. The deal was far messier than anticipated — a hidden wastewater plant failure, an HOA lawsuit, and one of the longest rate cases in Montana PSC history — but the experience forced Matt and his co-founder to get certified as water system operators and learn construction, which seeded every subsequent business. Each new company in Peak Group arose from a bad vendor or subcontractor experience: field services spun out when operators were unavailable, an equipment dealership was acquired when a retiring competitor called to avoid being out-competed, a lining/rehabilitation company was started when subcontractors were unreliable, and a small manufacturing line was purchased when a supplier shut down during COVID. By formalizing the holdco around 2020 with his two brothers as minority partners and buying out his father's process-heat distribution business, Matt built a ~$20m revenue water-infrastructure holdco spanning six states with ~55 employees — all without outside capital and largely by accident, seizing opportunities as they arrived rather than executing a predetermined plan.

Deal facts

purchase price: $1.6m (first acquisition, private utility company)
revenue: $12.5m (full year prior to interview); ~$20m projected run rate at time of interview
financing structure: Conventional commercial loan with personal guarantee (first deal); subsequent acquisitions self-funded or via revenue-share earnout structures
notes: First acquisition (~2008) was a private utility company near Big Sky, MT serving 215 condos — included water/wastewater, cable, real estate, and heavy equipment. Listed at $1.6m. Second acquisition (~2010) was an equipment dealer/manufacturer (Steve's business). Also acquired father's distribution business (~2020). Most recent acquisition closed just before interview: Russell Industries (competitor). Several one-man retirement acquisitions done with no upfront capital — revenue-share on territory for ~5 years. Holdco formally structured ~2020 with two brothers as minority partners.

Why this business

Matt was drawn to small business ownership through his father's example, wanting to live in the mountains of Montana and maintain an outdoorsman lifestyle. He initially sought a semi-passive business that would give him flexibility to hunt and fish. The first utility company appealed because it seemed like an annuity — pipes connected to houses, bills sent, checks collected — requiring little active management. Subsequent businesses were opportunistic: each new company was started or acquired because a vendor or subcontractor was serving them poorly and they decided to solve the problem themselves.

What's working

Water/wastewater infrastructure is a stable, growing, recession-resilient industry with multiple uncorrelated customer types (municipalities, developers, mines, food processors)
Recurring long-term operating contracts with certified operators create durable, sticky revenue
Regulatory barriers to entry (operator certifications) and technical complexity protect against new competition
Roll-up of retiring one-man dealers via revenue-share deals requiring no upfront capital
Geographic expansion across six states (Montana, Wyoming, Idaho, North Dakota, Utah, and growing) via branch offices
Vertical integration: equipment sales, field services/operations, and specialty lining/rehabilitation under one holdco
Recent hires of fractional CFO and first digital marketing employee signal professionalization
Strong employee culture — giving second chances to people with criminal records, supporting employees through personal crises

What's hard

First acquisition was far more complex and legally contentious than expected — one of the longest rate cases in Montana PSC history, HOA lawsuits, and a failed cable business
Wastewater treatment plant at first acquisition had been covered up by seller and needed full replacement shortly after closing
Early hiring mistakes: first employee hired because he 'wouldn't be too demanding' rather than for capability
Partner buyout required when co-founder found growth too corporate (triggered by introducing 401k benefits)
Business has been under-professionalized for years — no digital marketing, homegrown financial reporting, no fractional CFO until recently
Lining/rehabilitation business (Advanced Lining) is capital-intensive — each crew requires ~$250k truck
Geographic spread creates operational complexity; needs to digest recent acquisition before next expansion step
North Dakota oil field market eventually faded as oil prices dropped and infrastructure caught up

Notable quotes

We thought that this would be passive, that this would be basically an annuity — the pipes are connected to houses, the systems operate on their own, they don't need a lot of input, and you send people a bill and they pay it and you go fishing.

We've been successful despite our lack of professionalization — we've been able to get this far without doing it right, and if we could actually figure out how to do it well and efficiently, there's a tremendous opportunity there.

It was just a sequence of kind of accidents and these just decisions that would present and we would make what we thought was the best, and it resulted in more complexity over and over.

Small businesses are — it's really about the people, and if it doesn't speak to you to contribute to them and to understand them and to try to build something for them, I think that would be a big handicap.