Andrew stoter welcome to acquiring mins thanks will great to be here today thanks Andrew you bought a business without the benefit of the SBA and got really good terms demonstrating that buying a business can be done by a firsttimer with conventional Bank debt and without having to be bring a big slug of capital to the table you also bought a really cool business so let's get into it start us off please Andrew with some background on you yeah thanks will uh and again really great to be here thanks for having me so first and foremost um I'm a husband and a proud father of uh four young children and great kids um I grew up in in Alberta um which you know for for those that uh don't necessarily know Canada uh we're just north of the Montana border um and that's that's kind of where I grew up so uh to my schooling there well my career has primarily been in what we call called kind of fast moving consumer goods or consumer package Goods cpg so that's really where my career um has focused on so I started uh with the Kelloggs uh or Kellogg Company selling cereal so I got my kind of uh opportunity to carry the bag there moved quickly over and was um recruited to go over to the Mars food company which uh was really cool I had the opportunity to kind of sell some big Brands like M&Ms and Snickers and Twix so I had the whole confectionary side done uh really enjoyed that my wife and I had our first child we decided to move back out uh to western Canada so we had to spent some time in Toronto with Mars mooved back um and that was really my first for into the regulated product space and uh I joined the molon Kors Beverage Company um so in the US it's the Miller Kors uh beverage company and uh had a great run there and and was able to work my way up through that organization to the Sea suite and had a really great run there and enjoyed my time um but then I got a bit of an itch and decided to uh scratch that by going into a startup and um joined a cannabis startup company in 2018 and uh cannabis at at at the time in Canada was kind of just getting going as far as Federal legalization goes obviously it's a bit different South of the Border but uh I I decided to come in there as employee number 11 and uh take that business really from a standing start and scale that business and went through all the ups and downs in that which I'm sure we can touch on a little bit later is this important part of the the story but um I became president and Chief Operating Officer of that entity which we took public on the NASDAQ in 2019 and I left that business in January of 2023 and started my search uh and as of September of 23 acquired the company I'm at now which is uh All Things Cedar so we'll uh we'll leave it there so Andrew just to be clear did we just hear that you were the president and coo did you say of a NASDAQ traded company correct and you were there to I mean you were part of the executive team that took it public yeah we we we started we started um quite small at zero revenue and then we we scaled that business up and uh ended up I think now it's close to 3,000 employees almost about a billion dollars in revenue and we ended up taking that company public on the NASDAQ so yeah I got got a chance to ring the bell and and do all that fun stuff and yeah I was president and Chief Operating Officer of that company so kind of did the full Gambit I had cereal chocolate beer and cannabis so all the food groups kind of covered in my career so far all the vicey food gr candy and drugs huh and beer can't forget beer yeah right right uh that's great maybe just give us another minute on this ride because you were an early employee very early employee at a company that's now public that's now what did you say a billion dollars in revenue and 3,000 employees so maybe yeah maybe give us a minute or two on that because that seems like important context for or later yeah sure yeah it was um you know cannabis at the time and I think it's it's kind of lost a little bit of it luster is just kind of figuring out what's going to happen in the US but certainly in Canada you know 2018 this was kind of the early early days of cannabis legalization there was a lot of push uh you know a lot of money being raised and capital being deployed to scale this industry up so yeah I got into that quite early um and we we did we did some great things will I mean had some amazing EXP experiences you know starting from scratch and really scaling it we did a lot of things wrong um as most startups do we got a bit lucky um and you know we got uh actually one of the cool things about that experience which wasn't at the time but looking back it was kind of neat we were you know in that fold of the meme stock craze kind of when covid hit and the company which is called sndl was called sundal Growers it's called sndl so it's it's certainly traded on the NASDAQ now but at the time you know there was obviously the am and the GameStop mem stock but right next to that was sndl and part of that was we were a NASDAQ traded cannabis company had the Robin Hood day trader Co check Dynamic happening and um yeah we were able to raise a tremendous amount of capital during that time sold into that diluted a lot but we were able to kind of really course correct the balance sheet and uh set the company up for Success moving forward so it'll certainly be a you know a survivor in the space there's going to be a lot of Carnage in cannabis uh for sure but you know like any kind of regulated industry it's probably going to be an oligopoly and pretty cool that the company that I was part of the uh the team that really started it is going to be one of the survivors that's wild and so by kind of being the third meme stock if I go if I go searching for sndl on Reddit I'll see a lot of stuff from 2020 that was in 2020 2020 20 21 time frame I'll see people there you'll see the diamond hands you'll see the the to the Moon you'll I mean this this was this was the the I mean we had liquidity that was you know right there at days trading higher than you know the big you know tech stocks magnificent 7 I mean we were it was it was a crazy ride and it's hard to explain it but yeah if you take a look back at the history you'll see one company in there called sndl the only difference I think that we had between the two that were skyrocketing was we as a management team and the board decided to sell into that craze um you know what does that mean what do you mean sell into it well I think you look at what AMC and GameStop did is is it caugh it caught everybody a bit by surprise so you saw this kind of hockey stick share price go through the roof and I think there was a lot of discussion on what he do with that so everyone was getting rich from inside but certainly the retail investors are the one holding the bag I think for us what we decided to do was if people were going to Value the company at I mean I think it was like $15 billion you know whatever our market cap we were going to say you know if they're going to pay us 20 times what we think this company is actually worth at the time we have to sell into that so so it was tough for the early shareholders because we diluted them but it was absolutely the right decision because we totally course corrected the balance sheet and and set the company up for future success that was the big difference between what we did and what the other two companies did not do they eventually did it but it was later in the game so the other companies the executives sold privately to make a quick Buck on on their stock whereas you guys said let's sell into this as a company meaning issue more shares at this inflated price bring in a lot of cash that sits on the balance sheet and makes for a a healthier balance sheet in business yeah yeah that's exactly I me I can't comment on what the executives did the other companies but I can tell you that you know the first few months there as this as the share price rocketed they really didn't you know do any type of of of offering um you know for the retail investor to really add more shares to the float we did did you have any personal outcome from the the meme stock frenzy man I'll tell you it was you know when you go into this you kind of have that view that's it's going to be wow you know this is this is the coolest thing ever and you know when we rang that NASDAQ Bell um you know I was a a multi multi-millionaire on paper but no did not have the exit that was the expectation as as a management team and as a board you know we we locked up and you know we we decided that you know even in the craze of of this meme stock were not going to sell so nobody sold shares and uh I think that was the right decision for the retail investors who really buying into the company and and ultimately save the company and I think if if management or the board decided to sell into that it it would have been the wrong decision so no held held and held and and still a shareholder to this day so certainly a a fan of the company and I think it's got lots of opportunities but there's going to be some headwinds to get through first awesome fascinating what a what an experience okay Andrew so remind me the date when you leave uh sndl yeah left last January so just about a year ago January 2023 yeah okay Jan 2023 yeah why did you leave and why did you then why it was buying a business your next move yeah I I think you know the decision to leave was you know I I was at the table I had I you know I was certainly a um contributor to where the company was but you know I think like a lot of of your audience and and Searchers you know having that seat versus feeling empowered to kind of really drive the direction of of an entity uh was lacking for me there um so so I think that was a big driver for me um I I I thought that you know as I was going down this road of startup and like you know people talk about startup zero to one and how difficult that is and we'll come back to that with the decision to kind of acquire an existing business but man it was it was I'd like to say I had more hair back then but I didn't but but I would tell you that it it was it was a grind I mean this this was this was differ the the the the risk of not being able to make payroll versus sitting in a big Fortune 500 company and thinking about revenue or or iida is this just a very different risk profile and and after five years running that hard you know I I I'd lost a little bit of fire in the belly and I was really kind of thinking it might be time to to maybe try something different but I had no idea at the time what I wanted to do but it was it was time for me to transition out okay great and so then you leave a year ago 13 months ago January 2023 and then so connect the dots between your exit there and your entry into our world yeah you know I was thinking about this before our our call and it was literally a year ago this weekend um we we did a a family it's Family Day weekend in in Canada so we did a family day trip with the kids it's it's a no screen weekend so we have no screens and we go out to a cabin and we kind of just you know disconnect everybody look at each other yeah exactly look at each other and try and survive um yeah yeah and uh so so we did that and and I remember I had I had digested the the Harvard Business Review which is obviously one of the Bibles in the space but for that weekend I was I was planning to read by them build so I had I had really got this kind of you know itch from from the hbr guide and then bu and build kind of was the weekend read and and I I remember and I remember I was reflecting on this I remember reading that late at night everyone was sleeping and I just put the book down I'm like this is what I'm going to do this this is exactly what I need to do um I I scratched the itch with zero to one I I I I'm better I think at optimizing and inspiring and building on an existing platform than and taking something and building it from scratch so I I saw this path and I was just like that is exactly what I need to do I had no idea it existed but I got to figure out way to do it MH wow that's great so it sounds like B then build was actually a bit more inspirational than the hbr guide because you'd already read J hbr guide but it was B and build that that was the pushed you over the edge you know I this a great question um I would tell you that I think if I referen back the amount of times I've referenced back to the hbrr guide is probably 10-fold versus Biden build so so it's interesting and and I know that's a different kind of traditional versus self-funded kind of method ology but but but both were amazing I think combined give you a really good perspective of the space and then it just kind of wets the appetite for you to go after it and kind of you know start finding you know a podcasts and and and uh and content like yours will where you just kind of get as much as you possibly can but those two really kind of wet the appetite very well and they complement each other I think yeah yeah I I agree and that's well put so tell us so you you decide uh everybody's sleeping on uh no screen weekend upstairs and you have the The Epiphany that okay this my path is now clear what is your what are your next steps what does your search look like yeah you know and I this was an important piece of the story I think it was you know I I I had decided you know given where I was in my career midcareer you know early 40s that I had this experience I I thought I could really take the skill set and bring it over to an existing business and actually you know do something with it so my initial thought was you know as I as I was going through this content was you know definitely going to be a self-funded kind of path um you know certainly and I'm going to come back to that because that was a really interesting I had a really interesting Dynamic happened before All Things Cedar which really was impetus which we'll touch on later but um you know it was it was your kind of your traditional I I started to you know really hit the ground making as much contacts as I possibly could with Brokers trying to get as much deal flow as possible really kind of put the structure down built a website kind of did my one pager around what my search criteria was so I was I was dabbling and you know early on will as I started to talk with some people in my network I had a beat on a company within like the first two weeks and um I remember telling my wife I said is it this easy I mean to buy a business is it this is like you know how how difficult is it for me I I sat down with the owner we had a great meeting uh we certainly connected it it it had aot lot of the criteria that I think you know we were looking for as Searchers and self-funded anyway but there was some there was some hair on it as all deals have and and you know I kind of pushed in into that a little bit but but ended up not doing anything from an Loi standpoint but that was that was kind of my first Foy into it and started to gain a little bit of traction from there a little bit of confidence and then kind of just fell off a cliff kind of by April May and I I I remember I you know as as a self-funded Searcher you know you have a bit of Runway that you think about around okay I've got a little bit of savings here I I think we can we can manage um but you know you kind of put those parameters on your time zone and you know mine was I kind of said to myself I said by the end of 2023 I either need to have acquired a business or I'm going to need to figure out how to do something different and the thought of going back into a Fortune 500 or a corporate world was like you know that was I had an allergic reaction to that of doing a startup again didn't want to do it so there was this path of Consulting you know that that was there but I was I was determined that I was going to find a business and and I was going to acquire by the end of this year so um that that was the path so so it was after a few months you kind of starting to hit a discouraging moment where it's not looking like it's going to happen as easily as you thought but when you consider the Alternatives it it it kind of refocuses you on as hard as it is now I'm going to slog through and make this happen that that's well put and I think as an operator midcareer one of the things that became a little bit interesting as I was going through it was my skill set you know certainly was an advantage to a lot of these companies that I was looking at and deal flow is not easy to get as I'm sure everyone on the call understands so it's it's it's a challenge to get that but as I started to look at these businesses you know there was certainly a need for some of my skill set but I think the concept of you know coming in at some level of a minority shareholder or you know coming in as operator and building out some type of Leverage buyout or something like that later on in the game that kind of popped up a little bit but I really you know had to reflect on whether I wanted you know to take the whole you know the whole gra bird or have a piece of the watermelon I guess and that was a huge decision for me so so to answer your question yeah absolutely there was a bit of frustration you kind of hit that plateau and you kind of have to decide whether or not you're really really going to go all in I mean I was searching full-time but you know I was also this is the first time in my career where I had a I had a summer off ever and uh you know we did some family stuff so I was enjoying that but I was I was getting a little bit eager kind of in that early summertime where I was like wow if I don't get something here what is the what do the prospects look like you know as a family of six and as the so brand winner gota got to try and make some decisions here yeah wow that that is a lot of pressure Andrew yeah soul bread winner so and also I assume you're Calgary based yeah Calgary based you bet and not leaving with a you know four four kids you're entrenched in this community geographically constrained search no question that was a big part of it yes what's the population of Calgary how big a metropolitan area is it yeah it's about um it's about 1 point I think it's about 1.7 million now um okay so the province of Alberta's got you know almost 5 million um Calgary and emont are kind of the two big cities the metropolitan cities there that make up the majority of that population and so were you basically just going to look in Calgary oround yeah and it's actually the first business I looked at was in a province next to Alberta called Saskatchewan which another prayer Province and that business was a manufacturing business as well um the trailer manufacturing business that I was kind of you know kicking the tires on and it was it was about 5 Hour you know drive a small small town Saskatchewan so that was a big reason why I was just like wow I don't I don't know if that's going to really make sense with four four kids at home and and having to make that commute owner operator so yeah absolutely Calgary but you know as you go into that and you start talking with Brokers as you know somebody that's not brand new to the space you don't want to shut it down too quickly so I kind of said look you know it's Alberta for sure it's Calgary but you know I'll look at BC I'll look at Saskatchewan I'll look at kind of the the uh adjoining provinces to see if there is you know something that makes sense uh moving the family though I think think if that ever came to a decision criteria I probably would have said no um but the ability to commute you know with a couple hour drive was certainly in the in the scope okay so despite hitting this Plateau or now that you've hit this plateau in the summer then what so I get a call um late May and I had made some connections in with um you know one of the larger kind of firms in in the in the country actually and you know they have an arm that does do a small business acquisition or they kind of a deal advisory kind of team don't like to be called Brokers but for the sake of that got a call from a broker and he had said you know are you still looking and I said absolutely well I have a I have a business you should take a look at um but I don't want to tell you the name because I'm so embarrassed by the website that I think it's going to scare you off so have a coffee with with a gentleman that is got it to the Finish Line uh he's had it under Loi completed the due Dil Ence um he wants to acquire the business but he's made a decision that he needs an operator to kind of really scale it with your type of skill set so when he was talking to me about this I thought directly of you you guys should have a coffee and potentially you guys take this deal down together so that was the phone call that I had met the individual you know he was kind of a you know I came out of the private Equity World um was kind of doing more of the kind of self-sponsored kind of role where he was you know going to going to acquire some business businesses but really wanted to be more passive in that in that approach so you know we met my skill set obviously was something that he was interested in he wanted at the time for me to take a minority position in the company that he had all the way down the Finish Line was putting his personal guarantee on had the financing lined up but he needed somebody like me to come in there to really drive the growth of the business so we had a great conversation uh I came home thought about it over the weekend went back to met him face to face face and decline the offer and and I said I appreciate it I like the business a lot but the thought of me coming in as a minority uh shareholder um at this stage of my career and as part of what I what I really want to do just not going to work for me so his credit you know he kind of said well if that's the case why don't you take the front seat I'll take the back seat if we can get the broker aligned and get the seller aligned to this this new Direction what do you think about that that means you're going to have to get the financing you're going to have to get the personal guarantee but I'll come in as an investor and we'll flip it around um so I you know I I that was music to my ears and uh seller agreed to it the broker was all for it and now I was in the position kind of driving the bus and kind of saying okay now I've got this potential deal that pretty much was there all due diligence quality of earnings was done let's let's go figure out whether or not this is you know going to work and and I took it over from there and and uh and drove pretty fast that was end of May MH and and by the way so you had mentioned earlier eating the whole grape or having a piece of the watermelon so no piece of the watermelon you're the you're a whole grape guy um yeah and and when he presented it that way you were receptive he'd still be involved though but he'd be minority and he'd just essentially be one of your investors so that from your perspective maybe that not only kind of solved the problem but it solved a secondary problem you haven't told us if you going to raise capital for this from from investors but you know voila you also got your first investor lined up 100% yeah exactly and that was a huge huge piece I'd been at the table with you know my previous company where we had acquired five companies in like a year and a half so I I had exposure to m&a but you know it was exposure it wasn't actually leading it um so so having somebody like him you know there I I kind of initially thought well this this could be a really great kind of Mentor relationship um you know helps me I think at some level with the lenders to have somebody with his capability and background sitting on the cap table this might just work out and I hold majority position which is exactly what I wanted great but that's not what happened that is that is not what happened enter the drama of the search um so early early in this process as we decided to go down this path um it became pretty apparent that this was not going to be a fit and you know for for for many reasons um but I I I had come to the realization at the time that you know if I'm going to do this and I'm going to have somebody sitting there with me you know um being part of this journey you know ultimately we need to be aligned and ultimately there needs to be some give and take and some learning and developments and all that good stuff and I just didn't feel that that was going to be probably what was going to happen and so we kind of lost contact for a little while I remember I was in in I was on on a Disney cruise of of of all places and got a WhatsApp from the broker and he says hey we need to chat about the financials of of the business so I I literally had a phone call on on the cruise probably the worst choppy phone call and the most important phone call at the same time happening in my career um but we we chatted and one one of the requests that I had to the broker was can you put out a you know go forward forecast on the business because you guys are putting a trailing 12 months looks great but tell me what the business is going to do year end so they did that work Andrew y sir excuse me so but when you decided to part ways with this person who was maybe going to be your investor partner you you were going to keep the business you were going to be the one to buy the business at that point so he walked away completely we hadn't made that decision yet so okay there there was you know I said you know when we were when I was getting back from from Disney World it was going to be Kate you know H how do I do this and ultimately I had the I had the LOI and um you know this this was the first Loi that I had put together this first the only Loi that I ever kind of put out there and executed on so I had a pretty good strike rate there but I I I wasn't sure whether or not if I had the Ali it's nice and it's comfortable to potentially have you know somebody sitting on the cap table that's willing to but did I want to have that individual on the cap table that was a decision that had not been made yet um so as as I was having discussions with the broker in between that decision time they had said the financials had moved and you know this this was an important piece of the story because as those financials moved it afforded me the ability to to to kind of retrade and negotiate on the uh existing Loi and that was really the start of a different path that I decided to take which was uh not including that uh that particular investor okay so carry on so as we uh as we as we had that discussion on the cruise you know the numbers had moved of course they always move and one of the things that uh we were negotiating I'll touch on the the deal specifics as we get into it because I think it's it's an interesting kind of contrast maybe some of the stuff that we see down in the US but um I really felt there was a good opportunity with this potential move on the financials to really dig in and negotiate harder for a seller note to increase and the broker you know was great um and and they're huge part of this the success of this deal closing um they they felt that that was probably appropriate there's going to have to be some give and take on this but I felt that at that time will if I was able to to dig my heels in a little bit you know the seller the seller had this deal at the finish line so there's a bit of fatigue there so I so I knew that you know I was a good fit we had you know some early Dynamics and relationships where there seemed to be a nice little connection there I felt that if I could if I could really dig in and get a higher seller note my optionality around how I would structure the deal from an investor standpoint would open up some doors and potentially I could take the grape down versus having to go get outside investment okay so the but the numbers must have moved materially if you're in a position where you feel like you can R trade a little bit like it more than just like a little no you know little dip that is basically the up and down noise of a natural noise of a business yeah I think that's right and I I had a an initial view going in that I think anything 10% or above I would kind of look at Material anything in that 10% probably was not it was just going to be part of the you know transaction will figure it out so this this was a little bit of a move above 10 and I felt there was a good opportunity to kind of push on that that so there was an agreement on the table which we'll get into I think probably later on the structure but there was an agreement on the table with the vendor takeback and um I felt that you know I still like the business there was a lot to like about it um but there needed to be some some more give and take on that vend or takeback so as I pushed into that the ability to kind of think about how I would put personal Capital into this deal still get it done um with the structure that I was thinking about um I I felt really confident that if we got that revised Loi over the line there was a good chance that I could take this down and be 100% owner of the business and to be clear for everybody a vendor takeback is Canadian for seller note right yeah exactly yeah it's exactly right it's a seller note that you put in the deal and and uh also structured in an earn out there which we can touch on a little bit later on Andrew before we get more into the terms of the deal can you can you tell us now what the business is and give us kind of the bullet points of it yeah so um so the the company that I acquired uh is a company called All Things Cedar and All Things Cedar uh has been around for about uh 25 years and the company manufactures um Redwood Cedar outdoor furniture um the business uh is uh based in in Canada uh it's about 45 minutes from the Montana border which is really really important uh because 80% of our business actually happens in the US so we we uh we only have 20% of our business in Canada 80% is in the US so all think Cedar is a um it's really an Ecom business it's fascinating business where there really hasn't been a focus on brick and mortar and uh we sell on marketplaces like Amazon uh Wayfair Lowe's Rona Walmart um as well as direct to Consumer through our through our own website so so that's the business I bought and um uh you know it's it's Niche manufacturing um you know it's it's got some really kind of interesting modes around it and certainly hit some of the criteria for sure that I was looking for um you know when when searching and um you know this this was this was the one that I kind of said if I'm going to do this in 2023 I'm going to take a full run at this one and get it closed and can you give us a sense of number of employees Revenue sde kind of some more um quantitative metrics around the business yeah so so Revenue was about $3 million um give or take the business actually uh doubled almost tripled actually in 21 20 and 21 in covid and like a lot of businesses you know this this was a really um accelerated by by the co Dynamic so so we were doing you know 2023 was normalizing back to where probably was pre pandemic level so about $3 million in revenue and and about um 700,000 uh give or take in in iida um really nice gross margins kind of in the range of 30 to 35% and you know obviously iida margins kind of in that 20 to 25% so some some really healthy numbers there for a for a manufacturing business um that uh you know certainly had some opportunities for growth and how many employees there was uh when I acquired the business there was uh 12 employees in total you mention Moes that you saw that you liked elaborate on that if you would yeah the the business you know at a at a macro level I think will when I was searching I think you know I started to get into this outdoor furniture um space and you know the Tam on that or the total addressable Market was was a factor and I think you know in the US let's call that about A9 billion business so it's sizable um what's interesting about that tan is about 65% of that 9 billion in the US is actually outdoor wood furniture so this is an interesting you know fairly large business that or or or large industry that has uh certainly U room for growth and and over the next five years or so it's expected to be pretty healthy slight growth so so I like that I think at a at another macro level this concept of um de globalization I think is real and I think you know what I mean by that is I think the concept of manufacturing and selling products you know in North America or wherever you are in the world and keeping those products and Manufacturing versus offshoring those or buying in exporting them or importing them I think is is a real interesting Tailwind that we're seeing and we're certainly in that cycle right now and you know I like that I I think there's a lot there from The Branding standpoint as well as how you communicate customers and how you manage those those Rel relationships so so I like that um you know also I understood the business you know I come from kind of a cpg background so for me to you know in Alberta which is a very energy oil and gas based industry there's a lot of businesses that are oil field services um you know stuff in the industry that it's it's cool it's great there's obviously some very successful businesses in that in that space I just I didn't understand them you know I come from a you know let's make great product let's let's sell that product let's figure out better ways to optimize it so that we can you know do better for a consumers or customers and make more money for the business so so I like that you know make something and sell it that was that was easy for me to understand um and I like I like the fact that it was Niche you know the manufacturing side of this was was really interesting for me because I think in Niche manufacturing one of the hypotheses that I had certainly when I was looking at some of this was traditionally when you're an owner in a manufacturing Niche business like this you want to manufacture that's what you're good at that's what you've been good at for years and years and years that's your specialty that's your capability when it comes to sales and marketing you actually want to stay as far away as that as possible you want somebody else to do that and when I looked at this business that was exactly what I saw I saw um you know a really great manufacturing process that had been honed over 20 years good margins of course good connections and Logistics but when it came to how the brand was showing up um on the marketplaces I mean it was all over the map we had resellers we had you you know different pricing no pricing strategy um different logos everywhere so so so that was a really big kind of aha moment for me to kind of say interesting you know this this thing could be a lot more consistent and deliver on the brand promise but it's going to need some heavy lifting there because it has not been the focus of the owner previously um couple other ones I think that were really really important is I think you know exposure to the US is a Canadian business and and you know I talk to Searchers quite a bit now and one of the things I tell them Canada's got lots of opportunity for for some great businesses but having that exposure to the US it's just you know it's 10 times plus bigger yeah you need that and this was a business that was 40 minutes from the Montana border 80% of it was sitting there in the US lots of opportunity expand and grow so I love that um Redwood Cedar interesting material that's that's a tough one to actually get access to it's it's native to the Pacific Northwest so we procure all of our Redwood Cedar from British Columbia actually a lot of the companies in the US in the space um you know import from British Columbia so we procure all that we have Supply relationships with a lot of the Mills we have a broker on the ground in BC that's been with us over 20 years so the connectivity to these Mills and the ability to kind of take um you know Cedar and be able to get that and manufacture that consistently you know not a lot of companies have that ability and and we certainly had those Supply relationships and access to that wood which is you know obviously really really critical when you're manufacturing this kind of specialty wood product and Andrew the the the it being Cedar Products I don't know the first thing about wood so forgive me but is that is that a premium wood I mean the the gentleman the named the entire business around the fact that these are Cedar products recall audience the name of the business is All Things Cedar so what is the significance of this wood Cedar's a a fascinating and I didn't know much about it either before I took over the business and started researching on it but what's really great about Cedar is it's naturally resistant to insect and rot so it just has natural preservatives in there that that allows it to weather and and doesn't you know doesn't break down like a lot of other other wood it's very low maintenance so it's a perfect material for outdoor um you know it's it's it's native like I said to the Pacific Northwest um and I think you know it's it's got the sensory appeal to it's got a it's got a great uh you know it's got a great look got a great texture got a great feel um you know this the smell of Cedar you know it's got a lot of those attributes that you know people love uh putting in the backyard putting in their home and then I think you know the other side of that which is interesting about Cedar and contrary to kind of popul belief you know it's much more sustainable and environmentally friendly than kind of the man-made um Alternatives that are out there right now and you know those are composite materials that are coming in from you know other parts of the world certainly cheaper but obviously you know there's there's a big push right now for you know sustainable practices and and Cedar particularly the cedar that we procure and and that gets manufactur it comes from sustainable sources it has responsible Force management practices so a lot of those things that you know that consumer is looking for for a company that's trying to do right by the environment the carbon footprint Cedar's a great wood for that as long as you're getting it from the right uh the right sources yeah fascinating um okay great and were there other Mo Moes I think I might have cut you off yeah there's there's a few other I think you know um over the 25y year Horizon on this business there has been you know really zero dollars and efforts they've had no sales and marketing ever in the business and obviously my background was was a good fit for this um and and what why that's important is the business has lived and thrived online which is great given obviously where the consumer is shopping and how that's going to play out over the years but brick and mortar is a key part of this business and and you know we've never sold a single item in a brick-and-mortar retail store over the 25 years so even though we're in big retailers like Lowe's uh Walmart um you know we haven't really pushed that button to to say okay we've been providing you A Drop Shipping service over the years but um how about we think about you know becoming your supplier for your inore uh Shoppers which you know you get touch and feel the product a lot of stuff so so that's a huge opportunity no SEO you know no real kind of marketing on the back end of this um and what was interesting about when I started to dig into this what was fascinating was organically this business over the years because you know to the seller's credit he created this website in 1999 and um you know it's it's it's there I think by the time maybe this this comes out we we'll have the new website launched but um I kind of want to keep the existing website at some level because it's it's it's such a part of the history it's quite Antiquated but I mean that that website's been around since 1999 Google trust it there's a tremendous amount of backlinks to this website so when you search seed or Furniture when you search some of these keywords into Google you know the first maybe Couple come up are sponsored but we're right there we're top we're top five or six and that's without any investment you know so so there's certainly some interesting areas there to explore as we build it and you know I'm a huge believer that in an Ecom business an Ecom business can be much much stronger if you have direct access to your consumer about 20% of our business actually goes direct to Consumer through our own website so while Amazon Wayfair Walmart while these are really important we don't have as much concentration sitting with a Marketplace that can really Define your fate with some algorithm or something on the back end where all of a sudden you're relevant then you're not we actually can own that that customer relationship directly which had not been done in the Years uh leading up to when I acquired it but certainly there was a reoccurring Revenue that was coming in year after year customers are searching out this type of product we can build relationships with and we just hadn't done it so so that was a huge it still is probably one of the biggest opportunities in the business moving forward so 20% was not on the platforms it was direct from the website and your and your goal is to increase that share of the pie from 20% up exactly I'm a I'm a big believer like I think if you're just you know traditionally what you see on directed consumer businesses on shop fire whatever that is they're usually smaller um and then the ones that really scale scale through the Platformers and the marketplaces uh I think we can do both but I I love to get you know my goal is I'd love to get 50% of this business through direct consumer and then have the balance sitting in a combination of marketplace as well as brick and mortar retail and really kind of you know manage manage the business that way I I really feel that this particular category there's a lot to be said around you know that direct relationship and 20% of that business sitting there going that way already with this kind of an Antiquated website and no real customer relationship work that's been done I think there's opportunity to grow there so yeah I'd rather own that versus rent it and I think when you rent it you're sitting on these marketplaces and that's great business to be in but super tough because you're kind of at the whim of those algorithms on the back end you know it's funny Andrew about the seller because on the one hand you know classic seller at the end of his career and has kind of let things sit for literally decades including his 1999 website which by the way I'm looking at right now and is just so beautiful I I I love 1999 website it isti but um but on the other hand the guy in 1999 was super Progressive I mean he basically had a DTC Furniture business totally which by the way you know hard C first of all that's well that's 15 years or 13 years before D Toc became the thing and in an incredi difficult category to be to be doing D Toc in I mean moving moving adarand shars you know across North America ain't easy um so so there was a time where he was we he was very very Progressive I guess I guess he was just resting for the remaining 20 for the last 20 years because that was such a big lift no but just any more color to that history as to how he could be so Progressive in 1999 20002 2001 and 2 to do a dtoc Furniture site way back then but then to kind of rest on his Laurels it's it's a it's a great point I I would tell you that um I have I had I had a fabulous seller still do and we have a we have a we have a phenomenal relationship we meet weekly and you know he is one of those individuals that without him knowing really permeated this kind of um beginner's mindset in the culture of the business and look a lot of Founders have this uh for sure and they have to at some level right because you're constantly evolving you're changing and this is why startups are so hard but you know you're right will like his his foresight to kind of say two things really I think that really made this business unique and different many things but two that kind of stick out for me and you nailed one of them he made the decision to build a we he built that website you know Night Time by himself you know he was actually you know if you look at it some of the verbiage on that website he was trying to build SEO you know he understood that concept back in 99 early 2000s so I mean huge kudos to him for doing that super super strategic in how he was thinking about that the other thing he he made a really critical decision on was he he wanted us exposure early on and and I think what's great about this business in the proximity to the US is getting like if a consumer right now buys you know we can get it and we have customers all the way in east coast of the US to the sunshine States we can get it to them in like six to eight days so it's the next day it ships out of our warehouse and part of that was you know he built these really strong logistical connection relationships with a 3pl and you know over the years is just refine that so so even though we're a bit of we're a drop shipper you know if if I have a prime badge which I do in some of my Amazon products I can actually get the product to somebody in the state of New York f F than Amazon can by shipping it out Canada right so so there is absolutely some really critical capability building that the seller did and full kudos to him he's he you know he certainly had beginners mindset and I like I think a lot of sellers we we as the search Community come in you know we have these mbas and you know we think we're you know we've got all this awesome experience but man these these sellers they are quietly been executing for years and years and years and to your point they've been well ahead of the curve than most of us well it also that that history there or that background is is a perfect demonstration of what you're buying you know buying something of value this is Decades of of this guy chipping away at his business in in a positive way I mean building these relationships refining the relationships with the 3pl uh you know building SEO Google juice just just by existing I mean it's really um some of the some of the stuff that some of that great value that you get for buying rather than starting from scratch as we all know um and and just a little bit more about the business because I I I want to make sure we have time to return to the the deal structure itself which is a big part of the story and and you know we could spend a lot of time on the furniture manufacturing business I I love I I love Furniture uh especially wood furniture I'm no expert but I you know I'd love to learn what what the inside of a business like this looks like but we don't have time for all of that but um so if you're selling on Wayfair Walmart Amazon this is uh I don't know how how to put the it's not it's not a premium product it's a consu like kind of consumer middle of the road uh brand forgive me if I'm wrong no it's a it's um it's a good point I think if you were to take the All Things Cedar kind of brand identity from previous owner and one of his guiding kind of principles in building the company was he wanted to make great quality Cedar outdoor furniture accessible to uh people um regardless of where they shopped so you know we we have great margins on our business but yeah there are there are others that play in this space that are you know a th% more expensive than we are um you know we have what's interesting about the business and I think you know mentioned this in the preall but there's probably close to 200 unique kind of different items over the years that we have templates on that we kind of manufacture hand manufacture all this probably you know 75 to 100 to too long as far as that tail goes where you have to you have to streamline the portfolio but it's part of the story right All Things Cedar you know if if you want a sauna Cedar Bench if you want a you know planter box you want a porch swing like in Cedar we've got it um so I think that's that's that's an important part of it so there's a there's a good product portfolio there there's some some good capability around Innovation that we can build upon um and then the other thing I didn't mention interesting about the business is we also have really interesting relationships with teak uh supplier in Indonesia so another big part of this business is we have teak access uh that gets handmade customade that comes across from Indonesia I and there's a there's a market there for Teakwood as well uh which is a different type of fiber than than Cedar but equally uh durable and certainly um you know part of of the story and and that's a that's an interesting kind of part of our business and the third arm is as we're thinking about this business which is one of the challenges with it SL opportunities is it's quite seasonal so over the years the seller was trying to figure out ways to normalize what I call those shoulder Seasons so we we got into some accent Furniture some indoor furniture as well too that we can kind of sell all year round so primarily focus on that outdoor Market um inque and in Cedar primarily Cedar but we also have an arm that does some some indoor accent furniture that we acquire from from overseas as well great and maybe just a couple minutes on the business of furniture manufacturing you mentioned 12 employees so these 200 skews and you made it very clear that none of this is out Source the whole point is that you are the manufacturer so these 12 employees are building 200 different products yeah literally um and I would tell you that it's it's uh you don't have to be a you know a cabin maker or you know a professional Carpenter um you know to work we have a great you know team there that has been there's some good tenure there um but you know over the years what's really great about this business is is the previous owner templated this so one of the things when I was walking in the in the manufacturing building when I first was doing due diligence I looked up on the wall and there's hundreds of these templates on the wall and I said what are those he's like well that's that's how we make our product I said what happens if there's a fire in the building all the templates are gone that's that's the history of the company right there so one one of the first things we did to your point was because there's such a selection here and I don't know where we go with it yet but you know we're certainly creating a lot is you know we had to make duplicates of all these templates because they are built and there's there's you know that IP is there where you know we can get some somebody in there we can train them for three months and as long as they're comfortable with you know band saw you know they're they're making some really good Cuts but it's all templated and it's all good quality Cuts based on the template that the owner has created over the years it's really really cool so safe to say we got those templates created duplicates that got them offsite cuz I mean that really is the business mhm MH and is that not how other Furniture manufacturers do it these templates I don't again know anything about this uh yeah I think they do I mean I think there is when you have the bread of the portfolio that we have and you know I I think it becomes even more important to have that because you know over the years unlike a lot of sellers um you know my seller was I I want to have the widest selection possible of products even if I'm only selling five or six of these a year somebody wants that and I'm going to make sure that we we have it available for them so I think it makes sense for you know a big portfolio like we have to have something like this if you're really concentrated and you're building you know saunas or you know coal plunge or whatever it is you know Adon neck chairs you might just have a blueprint and your your team can just execute that at scale uh we don't um and maybe we get there with a little bit more concentration on what that portfolio should look like but uh but I think just given the scale of it we need that template and probably um you know a little bit more customized than I'd say some of the other uh companies that are in our space and what about competition for some reason I I have the sense that this would be highly competitive I mean I I I I don't know why I have that sense but I whenever I'm on Wayfair shopping for a piece of furniture um or of course Amazon is is just brutally competitive um es espe especially if you're you know North America produced as opposed to competing with um Chinese manufacturers and who are using composit not real cedar but I don't know may maybe you differentiate by offering real cedar so maybe that neutralizes that threat but ju anyway just talk to us a little bit about what the the marketplace out there looks like for um for for for winning market share and the furniture consumer Furniture space I think you're right I think it is competitive um and I think Co probably accelerated did some competitiveness into that I think naturally just the access to that Redwood Cedar which is a really um sought-after fiber or or material for people that really want to enhance their backyards so so it is sought after and so and where we're situated and of course where it comes from is an advantage in its own right it makes it really difficult if you're you know importing all this wood from other parts of the world to to make the economics work so I think that's one thing I think the second thing is as I looked at this and looked at the competitors there was um couple things that were really common from what I saw from competitors and that was they were very they were very focused on direct to Consumer so so they they had these great products but they had built these companies and and the ones in our space which is really interesting in its own right I mean these are 30 to 50 60 year second generation kind of wood manufactured companies and they are there including the US there's several of them in the US one owner maybe second third generation family now taken over but they have not transacted so so they're making money and and they're successful they've been successful by going direct to Consumer they've been successful on really having a really clear focus on where they want to be and they they have a really kind of Niche product that they're kind of hero skew is based upon and that's pretty consistent very rare did I see when I looked at the competitive set did you have a company that did those products but met you where you wanted to buy them and I think this is a really interesting Dynamic on how the consumer shops the marketplaces they they have a propensity to buy at lows or they want to buy a Wayfair or or Amazon if you're not there it you know sure they're doing their research but but there is a natural inclination to buy on a particular Marketplace for whatever that reason is and and I think where all think Cedar is different is we meet you there if you want to buy from there we're there with our products and we figured out a way to actually get it to you in like seven to eight days flat packed with great instructions and if you want to buy from our website you can do that too and if you want to have a direct relationship with us awesome too but having both of those is not common uh and and I think that's really the advantage for us so so I think we're really ahead of the game when it comes to accessible products that are on those marketplaces as well as you know the next phase of this which is how do you build the brand how do you be more consistent on the brand showing up and when you look at those they're like All Things Cedar that website that you had that you just looked at if you were to find these they're exactly like that they have been around for so long they have not done anything to professionalize or build those Brands okay great Andrew this is a fascinating business I I I really love it um let's but we got to return now because we're we're starting to bump up against our clock here the deal so because there's a lot here um so let's let's return to that where exactly did we leave it so you were there had been uh a little bit of decline in sales and so you were going to lean a little bit on the the the the terms that had been in the LOI so tell us ultimately what the deal how it shook out yeah exactly so the triling 12 months was kind of coming in around that 700,000 in iida and that that was kind of holding true the the revenue number was was coming down you know basically the pre-pandemic levels and so so there was a little bit of a hit on margin a little bit hit of of of eida there versus what they initially had proposed in the first Loi so um so I acquired uh the business um for I'm just going to look at my notes Here was about a four four times multiple uh on business so um you know we were doing tring 12 months close to about 700,000 there so um that that was kind of the core structure real estate was included in the business it was a share purchase deal will so so that was and and I wasn't necessarily going down the path of real estate but because of where we are located in the proximity to Montana uh it was strategic to keep that manufacturing footprint there um and you know the seller was very adamant that he wanted to trans transact with the real estate as well and um wasn't necessarily my first choice but uh we were able to work something out as part of that whole structure to include the real estate in there so um so we included the real estate and that was you know north of about a million dollars of of real estate there as well too and my push was to put a seller Noe in about 35% that that was the goal oh yeah um and that's bold yeah bold yeah so this was this was the retra kind of pivot when I started to see some of the numbers move you know I was kind of one time zeida on the initial Loi which was the goal for the seller note and as we started to move a little bit I felt that I wanted to push harder there um so we agreed to do that and and the seller and and the broker you know we worked through that but there was a gap and the seller wanted to close that Gap and make sure that there was even more aligned efforts over the next few years in the business so what we de decided to do was we had about A500 $600,000 difference on valuation and we put an earnout uh in that as well too um so we had you know cash on close we had the 35% seller note and then what we did to balance the difference on that Gap is we put in an earnout that really is four years in length capped each year uh close to about $600,000 that makes up that difference and that's an eida threshold or not so if the EA metrics of the business don't meet um you know in around that $700,000 range you know the earnout does not happen um so so there's some protection on the on the floor there as well as you know I think there's opportunity to kind of grow the business and one of the things that I negotiated as part of that was um I'm good with that makes the multiple a little bit higher but part of that agreement on the earnout was any new business that I'm able to bring in that's not existing today so think of Home Depot or you know Target or Ebay you know another Marketplace Etsy any of these new businesses that I'm able to go acquire as a new owner do not count into that uh earnout as far as e it goes so there's some incentive there to maintain the existing business and make sure that it's stable but there's also an incentive for me as new owner to go grow the business and reap that benefit uh as as as we scale it I have had many Canadians um reach out and say that they like more stories of other Canadians uh and of course one of the big attributes of a of a Canadian search is that there's no SBA indeed one of the attributes of any non us search so so everybody will be who's not an American will be you know sitting forward in their chairs here um so let's hear how that worked what were you how are you going to finance this yeah and and I think think you know as we look at Canada US I'm certainly not an expert on SBA but I think there is probably more similarities than there are differences you know in in Canada of course we have we have five big Banks and you got some obviously some Regional kind of credit players but you know I think a lot of what we're seeing in the new SBA terms as far as capital injection and amortization and you know the structures of some of these probably are moving more to where um Canada is currently and where I was able to structure this deal so as to answer your question as I was thinking about kind of okay if I can get this seller note to be that and I can get this earnout in do I really need to go get outside investors um and well one of the things that I decided you know when it when it comes back to that no screen weekend decision I said I'm going to buy a business in 2023 I said there's there's some things that I can do to increase increase the probability of that um there's some things out of my control but there's going to be some things that I can do that will enhance that and one of the things that decided was to work with um a local company here in Calgary um and shout out to them they're they're become great friends of mine and called Village wealth they're they're a big follower of your of your show as well too and certainly uh pass it over to Searchers that come through their their office but Village wealth has um an arm called airwell and airwell is really a let's call it a lack of a better term of financing kind of broker type of approach so what I was able to do is partner with them to say can we get this deal out can you help me raise can you help me raise capital for this transaction so we we put it out um they helped me kind of structure it we put it out to you know I think eight or nine lenders um traditional Banks the Big Five in Canada as well as kind of some four of the regional players and I think we'll we had seven term sheets come back and and Andrew when you say raise money you mean just debt not ra you don't mean raise money from investors uh well we were going to start with going to see what the banks were going to put back on that term loan or term sheet and then whatever Gap that we had there I felt that you know there was enough connectivity with with Village that we probably could have found the right investors to come in with me uh that wanted wanted a pieces so that that was kind of plan B but we wanted to throw the The Lure out and see if anyone would bite and and the goal was because I I negotiated pretty hard in the seller note the the thought was would they would they recognize that seller note as capital injection from me um and and you know traditionally whether it's you know SMB um or sorry SBA or you know getting debt in Canada you know traditionally the lenders want to see some skin in the game rightfully so and that number right you know I think it's now the SBA it's 5 10% is kind of the number but if you know that varied I think 20% was some one of the lenders that came through on that so so I expected that that was going to probably come to the table and you know I had some some money saved aside to make sure that I could afford this but if it got to a point where you know I had to put that all in plus closing costs plus figuring out what I was going to pay myself post transaction you know was this really going to paper or was it going to have to go get some some Capital um so we got the term sheets back and I would tell you that out of the nine you know five were really serious um that they really wanted to to underwrite this deal they liked it they liked my background they felt that that was a good fit uh two out of the five were pretty open to um you know not having any Capital injection they were they were going to take the the vendor takeback that I was able to negotiate and they were going to include that in as part of the capital injection that it put into the deal wow so so that was interesting and you you know and one of the great things about that sorry Andrew but just to be clear so the audience this is crystal clear that means other than your deal costs you're not having to BR if if this is the deal that you CH the terms and the deal that you choose to go with you're not bringing any Capital to the deal proper correct great just wanted to yeah you know highlight that yeah know it's it was It was kind of interesting to me too because you know that that was not what I had thought or not what I had researched certainly not what was coming through from all the content I was digesting about the space and ETA so when that kind of got presented by saying hey Andrew I think you know you've done a really good job negotiating this deal we like it um we actually think you don't need any outside investment so if you want to take this deal down by yourself and Own 100% of it we'll count that vendor takeback that seller note as Equity that you're putting in this deal and including the real estate will which is interesting as well too so that was part of the whole package right M and and so that was that was that was a a great kind of uh I guess decision at that moment where I once I kind of got that in the lens of an opportunity to kind of see if I could make that work coming back to this investor that was potentially there not sure we were going to make that work it became pretty obvious for me that if I didn't need to have him at the table or another investor at the table because the bank was going to count that towards Capital injection from my end um let's rock and roll I don't need I don't need anybody to take this deal down let's do it and uh and that's what I did two two important follow-up questions Here Andrew um first just big picture so you you you're you haven't told us the end of the story the deal that you actually went with but you said you went out to nine Banks and five came back with pretty serious offers um so for Canadian listeners or for anybody who's trying to do anything that's not an SBA loan you know I don't know if the Dynamics you experienced were Canada specific or this is something that can be extrapolated to any kind of country with a developed lending system MH it doesn't seem like it doesn't seem like the that it that it was going to be very onerous on you one way or the other in terms of the equity you had to bring to the table to do a deal I get I'm I'm trying to reconcile in my mind that we hear As Americans that the SBA is this great enabler of doing of doing these deals and that you know Searchers and other countries are envious of us but it seems like you had no problem finding great financing options from your Banks they just didn't have the three letters next to them SBA so yeah reconcile that for me I think I think that's a that's a great great summation of my experience and and I think that cash flow lending in general from from the banks in Canada even though we don't have you know a setup like SBA you know they're still looking at you know Canada's Got This major major opportunity around this succession transition that's happening just like what's happening South of the Border so if there is these deals that are papering and they they they figure there's a good operator that can come into them um you know they're willing to work with you now not I'm generalizing you know for sure but that was my experience and speaking with some other you know successful um Searchers in the space that's been their experience there's some differences for sure on amortization schedules it's a bit longer uh with SBA um there's certainly some caps in that $5 million kind of cap on on SBA versus what we have in Canada um but you know there's there's some other things we can do like the earnout I mean gives you some flexibility on the that does not exist there right so so so I you can get creative you don't want to Beautiful Mind this thing too much where you're confusing everybody including the seller but you can certainly get creative and and my experience with the banks was you know and and certainly this experience where we were able to take it to multiple different lenders and compare term sheets was boy there's there is not a standard that they're going to hold you to they want XYZ but if you're a capable serious buyer and the business looks good and the plan that you kind of put forward papers there's many different options I mean we had you know one of the things that I was able to negotiate too was a principal holiday in the first year you know and that was important because you know we have we have about a you know SE seven years is probably what you see on the am schedule here in Canada it's kind of traditional you know um you you know I think SBA is 10 depending on what what it is right so so it's a tighter kind of schedule there but you know one of the first I shouldn't say first one of the most important things is that first year and one thing that I made really important that I saw from one Lander was they were willing to give a first year principal holiday so just interest get yourself organized get your feet under you figure this thing out and then we'll start you know the the full principal um and interest payments you know in in in the second year so that was a huge that was a huge Advantage for me as well too we were able to negotiate that so I was able to kind of take the best of each one of these offerings and they were all unique in their own right and then pick a lender that I had a great relationship with and I I got lucky there too um and I was able to say here's what's on the table they knew the process they knew that there were some other people at the table wanting to take this deal down and um we were able to kind of come up and say Here's here's my wish list and they came back and said here's what we're willing to do and and uh you know got a pretty good structure there and and so is your sense that that there is this awareness among lenders among banks in Canada that they need to be deploying Capital to help with these successions so these businesses don't go out of business I mean maybe not explicitly that there's some kind of overarching plan or some government aligned plan but but but there's some Dynamic there where there's where they're interested in lending into these opportunities it's gaining momentum I I would say that there's there's really two institutions in Canada that I know of that are actually you know teaching the curriculum of ETA um actually University of Calgary is one of them you know my my home city um and another one out in Eastern Canada so so I would tell you the awareness level in Canada versus the US is lower no question um but I would tell you that the momentum of what somebody's lenders are seeing from Searchers like me come into the space as well as the clients that they've been serving for multiple years trying to figure out succession they're they're kind of connecting the dots and I think that's a real opportunity you know I think over the next 5 to 10 years and why some of these companies like Village wealth are really kind of coming up is they're trying to make that process a little bit more seamless because it is a bit clunky But to answer your question I think the lenders don't necessarily understand the size of that transition that's about to occur in the next 10 years and you know it's you Canada it's $2 trillion dollar you know in the next 10 years that needs to transact um 70% of that's probably going to be in the next five years 90% of these business owners have no succession plan at all 50% of them don't even know who to sell their business to so so I think that is gaining a lot of kind of pushing on the other side of the lenders but um I just don't think it has the same awareness level as as some of the SBA lenders in but it's going to get there and we're probably a bit early yeah yeah okay Andrew and then the other question I wanted to ask is while basically not having to bring any of your own money to the deal proper again deal C there are deal costs that also so basically 100% financing a little from over there a little from over here y that that does mean therefore though a heavier uh payment every month I mean that's that so and and you got some what was it called a principal holiday principal holiday uh from the bank so so they wanted you to not have that be so burdensome in year one but ultimately you know you're going to have as heavy a loan payment as kind of as you could um so that means that so I guess the question is you know you were comfortable with that and it's still penciled and you know what did your what did your dscr your Deb debt service coverage ratio look like like you were still feeling like um that there was room to breathe yeah you know and I think this is The Balancing Act I think is is you know if you're going to if you're going to backend load something you know the bank's still going to want theirs and you need to make sure that it's there um you know so so that's the risk of this strategy but you know I'm a big believer in leverage and and not leveraging yourself to the point where you can't breathe but this opportunity around how I structured it was you know we we're going to have you know a seven-year kind of amortization we had a a vendor takeback or a seller note that was six so there was already a discrepancy there but you know we were able to work together seller and myself to really you know almost a bit of a partial standby for for those in you know the SBA a partial standby where you know there's going to be interest but the principle on that um vendor takeback of that seller note doesn't really start to take effect on principle until kind of year six seven and 8 so oh I I I've absolutely backend loaded this transaction for sure um that was intentional that was purposeful with the you know the expectation that if I if I just kind of clip the way that it's been doing I can meet my dsse which is I think it's 1.25 pretty standard terms similar to what you get in the SBA I can I can do that I think there's not a lot of room um you know to to go and if there's sideways things that happen it's going to get pretty tight but but I think I can make it work if I can grow it you know that's a bit of the gravy on top where I can do that sustainably and and and really create extra room um particularly if I'm getting new business that may not be part of that earnout so so it's a tradeoff for sure and you know to to to to have Capital into the deal up front you know there's some decisions being made on that too so I don't take a salary from the business I haven't you know I'm five months in so that may have been a different decision if I would have had to put in all that Capital upfront you know and and so so there's a trade-off there too and you mentioned deal closing costs were a little bit higher because I ended up going with a you know a lending broker to kind of help me close that Capital that I needed to get to so so I made decisions to like I said make sure that I could close and give myself the highest probability to do that and I also backend loaded this so that you know I give myself a little bit of breathing room for the first few years to get myself situated with the expectation that you know I believe in myself and and I believe in the business that it can grow and um that's a risk but if I if it if it works uh it's going to be a pretty good irr no doubt uh and how long do you expect to go without uh taking anything out of the business for yourself you're so you're living off savings now um which again because you didn't have to put much money into the deal you you have some of that cash that you had allocated in your own mind for the deal now you can live off of but how how long are you expecting for that to to go you know may maybe I should ask your wife yeah exactly yeah so um I think we're GNA this is a really seasonal business so our I'm going to be able to answer that question probably in in you know July August we'll know actually by May whether or not you know we're hitting where we need to hit and there'll might be a little bit of of of of um salary that I'll take or dividend whatever that looks like but I've also part of the negotiation with the seller that you know we needed to make sure our our alignment was is I I capped myself to kind of say look I'm not going to take I have a I have a set salary you know that is there I have to live um it's not a it's not a big amount it's 70% less than what I was making in my in my corporate job but it's there and but I I until you're fully taken care of until I fully pay you back including interest I'm not going to be taking more than that amount um and you know he the seller appreciated that so so I'm a bit capped on that front and that's totally fine so you know it's it's it's going to be some lean years for the family and I uh moving forward um I'm going to see where we're at kind of post spring summer this year and whether or not maybe we can draw a little bit to kind of make sure that uh we're not feeling too stressed about the financial situation but um we we'll see how it goes and then you know I think the other side of this is similar to I think the SBA end with a good lender is if if we're a ble to execute on the plan you know I think what's what's going to hopefully happen is the lender will kind of say look you you've delivered on the expectations you've delivered on your plan we're going to take the seller out so we'll we'll basically take over that vend or takeback seller gets out um everyone's happy we now you know take that take that debt on and whatever interest rate that we agreed to on that one but that frees you up a little bit on what you can can and can't do as far as paying yourself you know over the next few years so so I think that's the goal if we can do that and then you know obviously similar to what we see in the SBA is you know there's personal guarantees you know and and even though my Capital injection uh was unique and different and some may say that oh my gosh that doesn't happen and that would never happen for my search yeah I you know definitely got fortunate worked hard for it but I also say look my risk is is as equal so if this thing doesn't work I've got a personal guarantee in all my assets that the bank can take and and that's not different so this is risky regardless yeah and you know a lot a lot of people who are listening to this are going to be single without a family and not have a lot of risk so even if that personal guarantee things go sideways things go the wrong way for them um it's very different when you got four five six mouths to feed four kids yourself and a wife so so this is no this is where I say that buying a business is way riskier actually than starting a business from scratch because um you you got lots of obligations on your shoulders um yes sir the I well just on the on the no money down I don't even like using that phrase but let's call it let's call it 100% financing that sounds a little B um Ju Just to did were the were the guys and gals at Village wealth surprised that you that the banks came back with these terms that you were going to be able to assemble such a deal or is this the sort of thing that they see in their day-to-day you know was is it is yours a big exception to the rule um or not or not from what you understand it's not common I think it's not common and but I think what was unique about the deal I had which kind of made it a little bit more common was you know I think we're in this zone now with interest rates where they are that if you're not kind of pushing 20 15 to 20% on that seller note you know it's it's it's there's there's going to be some some disconnect there around around interests and I think that's traditionally what we're seeing from from the lenders is if you're not in there so so I think my ability to kind of push above north3 on that seller note when they saw that and you know and I I had some dialogue directly with these prospective lenders I called them up as I was negotiating said hey if I'm able to do this how do you how do you think about that and you know the the the firm that I went with um you know which is Canada's largest bank RBC they they're awesome they still are um they were just like you know we love the way you're you're structuring this we we think you've got tremendous skin in the game but we what we like even more is the interests are aligned with this seller that's been around for 25 years they're not just going to pick up and leave like we like we like that and um we're willing to bet on that and so so so I think it's not common will but I think if you're able to negotiate you know a combination of this earnout or this vtb the ability for the lender to to to count that as injection into the deal to drisk them a little bit I Think Mutual interests align there pretty well yeah yeah vtb again folks being vend vendor takeback uh or as we call it down here um seller note so no it's it's a great it's a great point I mean what he was saying is you might not have any skin in the game but we love how much skin in the game the seller has the seller's got tremendous skin in the game whereas down here with the you know the 10% seller note I hear this debated back and forth but one side of that debate will say that 10% is a little bit uh of a motivator for the seller but if the seller's trying to retire and ride off into the sunset and it's just not that much of an an Anor for them um whereas 35% really is is is a material and makes all the difference I think it's important because the lenders that we're looking at which which was pretty common was depending on you know bdcs um you know another one which is kind of government run it I can't compare it to SBA but they're kind of like the the you know the the backend system that really supports businesses in this country and and and they they do some lending as well too and they were at the table and you know it was interesting as you kind of got through the traditional kind of uh lenders and then you had BDC the table and BDC was really good and they were very competitive and trying to take this deal but what is common what I found was you know the ability to kind of put your closing costs into it as well too which is another interesting part of this and that was more common so which is kind of interesting for me because if you put your closing cost in it's kind of like you're getting your you know your Equity injection back you know in a way even though you know that that that going to have to be taken care of through the through the amortization schedule but but that that was actually more common which was news to me as well too so so whether or not you're able to get you know the equity as part of the the vendor takeback seller note that's one Avenue to explore for for the Canadian Searchers for sure and I think that's not common but it's definitely there if you can push that note up I think the other side of that is deal costs and the ability for these Banks to kind of say look we'll take care of that um still put in your 10% but we'll take care of that it it almost was about the same amount of capital when you think about it so so I mean it's kind of you know it's it's almost like a wash so Andrew to close us out for extreme Clarity on your deal uh give us the bullet points again final deal that you went with in in the bank sure so the uh the multiple on the business with about 700,000 in eidel was 4 four times so that that was the primary uh part of the business we acquired in that as well to the real estate um so that was just north of a million dollars so let's call the transaction uh just north of about $45 million do give or take in around there um the structure of the deal was we were able to put together about a 35% seller note um or vendor takeback mortgage that um has a six-year amortization uh backend loaned for sure and uh to to manage the Gap that the seller and I saw in the business what we decided to do was put in an earnout structure that was about $550,000 and capped over you know a certain amount that we can pay out each year for four years and that's predicated on an eBid threshold of about $700,000 and only on existing businesses that were able to maintain so if I'm able to drive new business new customers anything incremental over and above that that flows down to iida is is all M to take and will not be counted towards that earnout and the bank that you ultimately went with for your lender was RBC big which will be a very familiar name to Canadians and the deal they offered was they'd financed the entire difference the the rest of the price uh you had to pay for your own closing costs some of the other deals from the other Banks you were considering that was fli where they would have allowed you to roll your closing costs into the deal but you would have had to bring call it 10% of the purchase price at close you would have had to inject that Capital yourself and as you said closing costs or 10% Capital about the same so really financially that was kind of a wash but but an interesting Nuance to consider for people yeah you nailed it well that was exactly the the structure and um yeah RBC Royal Bank Canada largest bank in this country and I think it's like the eighth largest in the world and uh you know and again I think this is kind of a common theme I think from your your guests that you've had on S of the audience I think the lender is one but inside is who is the direct relationship that you're that you're that you're making with that lender and uh it's part of my journey I've been very fortunate I've had great people and and my my particular Banker my relationship manager at RBC um was phenomenal and you know we we we have a great relationship to this day and he believes in me and you know certainly believes in the in the vision and that certainly helped build that credibility that they were willing to take a little bit more and count you know the seller note as part of that Capital injection uh and to your point before the the thought of the mutual alignment and having that seller be part of this with a pretty sizable stake they loved that and and they felt that that was a really great structure to to make sure that everyone was kind of winning here you want to give your Banker a shout out yeah Joel Snodgrass from Royal Bank of Canada uh out of Calgary here he's amazing and uh you know we we're we're pretty connected um I think one of the secret benefits I had is he's actually from lethridge which is we didn't mention which is where my manufacturing facility is which is about two hours kind of south of Calgary so it's a it's a it's a bit of a commute but um you know he he kind of grew up in that area so he's got a soft spot for leth bridge which certainly didn't hurt uh the deal as I was taking him through kind of the vision and the plan this has just been great Andrew and thank you for um distilling the the deal uh one last time for us I think we've exhausted the topics related to Canadian Searchers and buyers and and really anybody who's who's not using um SBA I mean now now my question is since I'm American and the majority of my audience is American I wonder if if you know people can go out looking for deals like you got not the 35% seller note that because that's going to be a big exception to the rule down here um but but just non SBA financing Solutions and and what those even look like for for Searchers um obviously when you get above a certain purchase price down here it all becomes conventional debt uh anyway but yeah um very intriguing Prospect uh any anything that we didn't hit on anything you want to say to your your fellow countrymen that we didn't already hit on no I think you know don't sleep on Canada for sure if you're searching and and for the Canadian Searchers you know there there are deals I I would just say the exposure to a market like the US is is just going to be that much more important I think than it ever has been as you think about these businesses there's some amazing uh companies that are going to transact in this country uh I think I mentioned you know there's there's two trillion that's going to have to change hands here in this country over the next 10 years so that's a big number um but having the exposure to a market like the US is just is is super critical and and I think that's a big part of why I like this business and so deals to be made in Canada uh there's some great lenders out there they're getting more involved and they're more aware of the space and there's certainly more of us kind of coming to the Forefront in the ATA community and they're willing to listen to us um and uh I think Canada is early days I think the US is much more progressed in Awareness level of of ETA but I think Canada will be there in the next kind of 5 to 10 years no doubt and there's going to be some amazing companies are going to change hands and and certainly you know hopefully this isn't the uh the only one that I'm able to to take on and and grow and expand and and make a difference in Andrew I'm just reminded about your point about having access to the US market you know it's it feels to me like you know you you'll see other e-commerce listings that are like this you know this business is just dtoc so it's not on Amazon at all you know big unlock available to the buyer who starts selling on Amazon as well this whole platform and audience and Market that that the current that the current business the seller hasn't even exploited and so um we could there's it echoes that I'm not saying that that's a good or bad strategy or good or bad business to go after but all I'm saying well I'm trying to say is it feels like maybe an opportunity for a Searcher is a a Canadian business that hasn't gone after the US market so you you buy a business in Canada that's just serving Canada and the lever lever number one to pull is to penetrate the US market rather than looking for businesses that already have a US presence um any quick reaction to that difficult difficult to do I I I I I think that it sounds good and it sounds like absolutely that's the way to do it I think particularly in these industries that have been around for a while the root to Market and some of the some of the access to these marketplaces and to some of the logistical kind of challenges like it it is it's challenging to do and and vice versa for those us companies trying to come to Canada you got to think of Canada as the state of California that's really what our population is just think of Canada as another state like 40 million people give or take right so if California you know makes sense from a scale standpoint then Canada is a good Market but Canada is 10 separate states so it's it's it's it's it's complex um so uh absolutely if you can do it do it but I think it you know it's a difficult challenge to probably start from a standing start and then move into the us because it's so competitive um whereas if you know the company I had has built it over 20 years we've got these relationships we've got these connections we've got this like you call it link juice on the back end that helps us kind of do what we need to do down there uh that's certainly Advantage you know versus I think starting from scratch excellent answer okay sir Andrew storter thank you very much for so much detail on your very exciting and cool deal All Things Cedar check it out everybody uh all things cedar.com go see the 1999 website before it's too late and and and enjoy what the web looked like uh back in the previous Century Andrew thanks a lot man well thank you I enjoyed it immensely appreciate everything that you're doing for the community as well making a big difference thank you thank you for that thanks Andre I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help 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