Jonathan Bournigal·March 3, 2025

Buying in a Small Market, Building a Regional Powerhouse | Jonathan Bournigal Interview

Jonathan Bournigal is a Dominican-born, Babson/Citibank-trained investment banker who became the first search fund operator in the Dominican Republic after his MBA, raising capital from local high-net-worth investors rather than the traditional US search fund community. He acquired Bunker, a document storage company in Santo Domingo, for a 6-7x EBITDA multiple (below $1M EBITDA) using an all-equity structure after a lender's aggressive default terms spooked him at the closing table. He also acquired two billboard businesses that were subsequently merged into a four-way deal. The core thesis was a growth-equity play: he recognized that Bunker had strong client quality but was capacity-constrained and had maxed out its organic growth; he then built a purpose-built 50,000 sq ft warehouse on a 20-year lease with a real estate partner (no deposit), hired a three-person middle management team that stayed for eight years, implemented enterprise warehouse software, and aggressively sold unvented in-house storage operations of large financial-services companies — growing the business to roughly 6x its original size and approximately 85% Dominican market share. The episode explores the unique challenges of searching in small markets: compressed deal flow, cultural resistance to family business sales, inflated seller price expectations, and the near-impossibility of achieving standard search-fund IRR hurdles or exit multiples when strategic buyers are scarce and market depth is shallow. Jonathan is now transitioning toward a regional private equity fund focused on the Caribbean.

Deal facts

multiple: 6-7x EBITDA (stated as the 'arbitrage' entry multiple)
sde ebitda: below $1M EBITDA at acquisition
financing structure: All-equity (no acquisition debt; a specialty lender term sheet was pulled at the last minute due to aggressive default terms)
notes: Funded search fund model; Dominican Republic-based local investors; 80% acquired, 20% retained by rolling operator-partner. Also bought two billboard businesses (merged into a four-way merger). Document storage business (Bunker) still held; billboard business has been exited. Grew document storage to ~85% of Dominican market and claims to be largest operator in the Caribbean region.

Why this business

Jonathan discovered the document storage business model by learning about a deal in Panama, fell in love with the business model, then looked for a comparable player in the Dominican Republic. He was attracted to the high EBITDA margins and strong free cash flow conversion of document storage and billboard businesses, which trade at higher multiples — allowing him to pursue 'arbitrage' rather than trying to talk sellers down to 4x. He saw clear product-market fit, capacity constraints under current ownership, and an underdeveloped market ripe for a growth-equity play.

What's working

Identifying high-EBITDA businesses (document storage, billboards) where 6-7x was actually a low entry multiple relative to the quality of cash flows
Building a new purpose-built 50,000 sq ft, 12-meter-high warehouse facility via a build-to-suit arrangement with a real estate partner — on a 20-year lease with no deposit
Selling unvented (in-house) document storage clients by showing them 40% cost savings and superior infrastructure, landing large financial-services clients
Building a middle management team of three young women (Helen, Caroline, Millie) who all stayed for eight years with zero attrition
Implementing enterprise-grade warehouse management software, digitally transforming the business during the warehouse move
Leveraging personal and family relationships (father's network as a cardiologist) for deal sourcing and client acquisition in a relationship-driven small market
All-equity financing gave flexibility to reinvest cash flow into growth without debt service pressure
Grown to approximately 6x the original box count; still has land for 2-3x further expansion

What's hard

Family business succession culture in Latin America made the original thesis (buying family businesses) largely unworkable — multiple heirs and cultural expectations meant very long, complex sale processes
Small, shallow market means limited deal flow; cold outreach damages reputation quickly — networking and proprietary sourcing are essential but constrain volume
Multiples in the Dominican Republic did not fall to 4x as the search fund model predicted; price discovery is limited and sellers have inflated expectations from word-of-mouth comps
Running out of warehouse space two weeks after closing created a multi-site logistical nightmare for several months
Buying the original warehouse as part of the deal was a mistake — it took five years to sell and was a persistent distraction and return diluter in investor meetings
IRR hurdles in the funded search model (20-35%) are nearly impossible to sustain over a 7-10 year hold; the structure pressures premature exits
Multiple expansion is very difficult in small markets — international strategics play low-ball, and once you dominate a niche you become 'undigestible' for anyone but a strategic
All-equity structure, while freeing, structurally limits returns versus a leveraged buyout (missing the leverage multiplier leg of the DuPont return framework)

Notable quotes

I realized I had to go out and create my own destiny, if you will.

High growth will cure overpaying in a deal. High growth will cure dysfunctional partnerships. It'll cure a lot of things. Don't be scared of a small deal if you're a strong salesperson — you'll grow into it and you'll grow into it quicker than you think.

I never knew that I was a salesman until I had to sell because my life depended on it.

If you are all-equity funded you are able to be a lot more creative — you can explore a lot of things when you have cash that isn't earmarked to go either to debt, a dividend, or earnouts.

In small markets reputation is everything.