15 acquisitions, 35% IRR and finding a "Magic Formula"

You know what’s interesting?

The more I meet, talk and see the life(styles) of the owners of traditional niche businesses  — the more I want to invest in industries that don’t go viral but just grow.

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The following is a little weekend-rant I had with myself:

Many investors ask: "How do I buy this company without overpaying?”

I guess the better question is: “Is it going to compound for decades?”

Let’s say you buy a “boring” small business doing $1M in owner earnings.

It grows at just 7% per year—modest by most standards.

Fast forward 20 years...

That same business is now generating $3.87M annually.

You didn’t flip it. You didn’t optimize for exit. You just held.

Not flashy. But incredibly powerful.

That’s the magic of compounding at single digits over decades.

The real question isn’t whether you paid 3.8x or 4.2x earnings.

It’s whether the business can sustainably grow and endure.

That said...I wonder how many buyers of boring businesses truly think in terms of compounding at 5–10% annually over 20 years...

And better yet: how many businesses can actually deliver that?

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It seems like the real game is staying in the game.

Lots of people obsess over exits.

Not too many talk about durability.

It seems that in order to create real wealth? You just gotta stay in the game.

1. Acquire well

2. Operate conservatively

3. Keep optionality

4. Avoid zero

That said — story time!! (see the house below?):

Every second weekend, I drive past this low-key trucking yard about an hour outside of the city I live in.

Nothing fancy. No large branding. No glass office tower. Just a large field, some shipping containers, a few modest buildings, and 100+ used trucks and trailers.

But here’s the kicker – the guy who owns it built a $30 million revenue business out of this patch of land. Net margins between 10–13%, depending on the year. No outside capital. No fancy degrees. Just grit and time.

He started the company two decades ago. Rumor has it his first trip involved a bit of savings, a few cans of tuna, and some cookies to keep him going. That was the beginning.

Today, he employs 20-30 people. Half of them have been with him since day one. Family very involved in the business.

He lives ten minutes from the yard in a quiet €2M home tucked away in the countryside.

No neighbors, no noise, no traffic jams every morning, just a peaceful and quiet place by the lake. Sounds like a dream if you ask me. Control over your time, your business, your life.

Every time I drive past his place, I think of Charlie Munger’s advice:

"Take one idea and take it very seriously."

This guy didn’t chase shiny objects. He didn’t pivot a dozen times. He didn’t overthink. He found a niche in his early 20s, kept his head down, and executed for 20+ years.

Now he sells used trucks, probably eats lunch with his team, and lives exactly how he wants. No interviews. No podcasts. Just a quiet empire in the middle of nowhere.

This is what winning looks like outside the algorithm.

The house looks something like this…

And I'm not even exaggerating.

Again, the guy sells used trucks and trailers and has been in the game for decades.

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Hold forever is a flawed framework

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How has been the week in the small holding company world?

Traditional company

Things are moving forward with the heavy equipment rental company.

Their broker is actively involved and helping us put together a proper structure and financing plan. I know I said this deal could be done with a real estate sale-leaseback — but one of the owners isn’t comfortable with that at this stage.

That said, he does want to partner with me.

He wants to stay involved for another five years and have me step in alongside him — with the idea that I’d eventually take over his position. He is even willing to help with financing.

Either way, it’s an interesting setup, and one that could work if we get the structure right.

I'll keep you posted as things evolve.

Consumer loan company

Last week I shared that we closed one equity investment and expected to close another within 14 days.

We're still in the middle of it.

Who would’ve thought that putting together the final contracts would take this long?

That said, we’re making progress — and once it’s officially closed, we’ll be in a much stronger equity position to support Modena’s growth over the coming months.

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This week’s podcast guest found a “Magic Formula”:

My conversation with Yuen Yung, co-founder of HalBar Partners.

Just a few things we covered in this hour-long episode:

1. “We found an opportunity which averaging over 35% IRR in the last three decades”

2. “We’re going after businesses that have an aging founder. Profitable. So no startups. No turnarounds. Companies which do $1-10M in EBITDA.”

3. “Our average founder we’ve bought has been 72. Average EBITDA has been $3M EBITDA and we’re paying 5x.”

4. “Out of our first 22 transactions – 10 are in North America and 12 in Europe.”

5. “Our typical seller is 72 years old. These are great businesses with no succession plan. That’s the opportunity.”

An exciting model and an even better story.

I hope you enjoy it.

Here are the links to Spotify, Apple Podcasts and YouTube.

That’s all for today.

Thanks for reading and talk to you again next week.

Take care,

PrivateEquityGuy / Mikk Markus