Buying a Big $7m Trade School | Bob Boniface and Tyrel Sulzer Interview

Deal facts

multiple

~5x EBITDA

sde ebitda

EBITDA ~$1.5m at acquisition

revenue

~$7m at acquisition

financing structure

Traditional two-step search fund (search capital raised from investors, then equity/acquisition financing from investor group at close)

notes

Acquired TransTech, a CDL (commercial driver's license) training school based in North Carolina, in January 2023 via a broker (Intrepid/Interro marketplace listing) after being ghosted on earlier proprietary outreach. Business had ~40+ instructors and 68 total employees across multiple North Carolina branches, growing 15-30% annual top-line over prior years. Traditional search fund equity split: partnered searchers each end up with ~15% of the business (vs. 25% for a solo traditional searcher) assuming performance thresholds are hit.

Why this business

Bob and Tyrell partnered in business school to run a traditional search fund and built a thesis around blue-collar, field-crew/route-based B2B services businesses. While interviewing freight and trucking business owners, they kept hearing the same complaint -- an inability to find qualified truck drivers -- which led them to discover the fragmented, mostly mom-and-pop CDL training industry. They liked that it was an education business with strong gross margins and operating leverage, that it sat at the intersection of secular tailwinds (a forecast 500,000+ driver shortage over the next decade, rising trucking wages, reshoring/manufacturing growth in the Southeast, and a cultural shift away from four-year college for marginal students), and that TransTech in particular was already one of the largest players in its state with room to consolidate a highly fragmented market of single-location competitors.

What's working

• TransTech's scale (8 branches, ~40 instructors, 68 employees) is a real competitive advantage versus fragmented mom-and-pop CDL schools -- large employers want a single partner who can train many drivers on a flexible schedule statewide
• Investing in marketing (radio, digital) to reach more individual ('cash pay') students in North Carolina has a fast, direct payback and expanded the perceived addressable market beyond what they expected at acquisition
• Bringing basic back-office technology (e.g., moving off paper payroll) freed up staff time and gave management visibility into site-level productivity (hours per student) without touching front-line service delivery, avoiding the employee backlash that front-of-house changes can trigger
• Growing recruiting/sales staff from 2 to 7 to handle the sales-and-advising process needed to convert inbound individual student interest, since enrolling is a considered, aspirational purchase with financial and scheduling barriers
• Deliberately diversifying enrollment mix away from cyclical long-haul trucking corporate accounts toward more recession-resistant CDL needs -- school bus districts, waste haulers, public works, utilities -- and toward compliance/training-as-a-service for employers newly subject to 2022 federal training regulations
• Being the biggest, most professionalized operator in the state (audited, DMV-compliant, consistent class start dates) that large corporate accounts trust more than small, inconsistent local competitors
• The founders' corporate backgrounds (GM manufacturing finance, engineering/oil & gas) transferred directly to running a formerly paper-based small business, giving them an edge applying 'boring' operational best practices

What's hard

• The trucking/freight market is genuinely cyclical and was in a down cycle during their first year of ownership (echoed by the collapse of Yellow), pulling back demand from corporate carrier accounts
• Tuition (~$3,500-$4,500) is a large, non-recurring purchase for a customer base that is often lower-income and price-sensitive, creating financing and access challenges -- state/federal funding for vocational training is limited (they calculate a ~1.6x payback for the state on funding this kind of training, arguing it's an underfunded policy opportunity) and private lending options risk predatory terms, so they are still working to find a responsible financing partner
• Both founders came from non-investing backgrounds, which created self-doubt and internal debate during diligence (particularly the ~4 month LOI process on this deal) since they had no prior transactional pattern-matching to fall back on
• Partnering means splitting economics roughly in half (about 15% equity each versus 25% solo) and carries relationship/execution risk if the partners can't resolve disagreements about strategy
• Early-stage psychological pressure of being only ~4-5 months into a nominal two-year search timeline made it harder to trust their own conviction on an unusually good but comparatively small deal ($7m revenue, smaller than typical partnered-traditional-search targets)
• Regulatory/operating complexity varies by state (e.g., Class B training length differs state to state) and by vehicle class, and expanding outside North Carolina means dealing with multiple DMV regulators
• Truck driver trainees are described as an opportunistic, high-turnover labor pool once placed, meaning the business's placement outcomes (and reputation) depend on partner employers' retention, which the school doesn't fully control

Notable quotes

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