We partnered with the existing management and acquired a 40+ year-old family-owned business serving schools, colleges/universities, and youth organizations in the State of Wisconsin. Six weeks later, schools nationwide closed. Revenue dropped over 60% in the first year. We managed through the crisis, grew the business significantly, and successfully exited six years later to two strategic buyers.
A regional educational services provider with four decades of operating history, deep relationships with school districts across Wisconsin, and renewal rates that reflected genuine customer dependency. The founders were ready to transition. Their children were pursuing other careers. Management wanted to stay on board. They needed the right partner, not just a buyer.
The investment thesis was straightforward:
Six weeks after closing, COVID-19 shut down schools nationwide.
Revenue collapsed over 60%. The business went from profitable to losing money almost overnight. Every competitor in the space was making the same calculation: cut the team, preserve cash, survive.
We made a different call.
Kept the full team through crisis. Zero layoffs. Redeployed staff to projects that could operate remotely. Maintained school district relationships. we wanted to be there when they reopened.
Secured federal support (PPP, EIDL). Consolidated vendor relationships. Used disruption to renegotiate supplier contracts on better terms.
Spent the recovery period learning what made the business work. Documented processes. Reduced founder dependency. Built transferable systems.
Recruited external talent to bring institutional expertise and discipline to the business. Won new business through improved execution.
Implemented programmatic M&A strategy, executing and integrating three bolt-on acquisitions. Same model, new markets. Proved we could enter adjacent geographies and replicate success.
Expanded beyond K-12 into adjacent institutional customers. Team grew through internal promotions. Distributed management equity to key contributors.
The business had matured. Three acquisitions integrated, management strengthened, processes scaled. The next phase of growth required a broader platform and resources beyond what made sense for us to provide.
We identified buyers who fit the culture, not just the financials. We selected two strategic acquirers whose approach aligned with how we had built the business. The team stayed employed with upside. The business was positioned for continued growth. And five years of disciplined operations produced strong returns for our investors.
That's what a clean exit looks like when you've run it right.
Crisis Navigation - Conservative leverage allowed investment during disruption while competitors cut. Team preservation maintained capability for recovery.
Geographic Expansion - Replicated successful Wisconsin model in Illinois and Iowa through bolt-on M&A. Proved ability to enter new markets methodically.
Talent Development - Zero key leadership turnover. Internal promotions. Management equity created ownership mentality. Culture remained intact through growth.
Operational Improvement - Vendor consolidation, process documentation, talent upgrades. Professionalized operations without breaking what worked.
M&A Execution - Three acquisitions integrated without disrupting the core business. Built a platform for continued geographic expansion.
Seller stewardship - The founders who trusted us with what they built for over 40 years watched it grow and land in the right hands. That outcome matters as much as anything.
Copyright © The Waterbear Group - All Rights Reserved