Acquiring Minds – $14.5m Exit After 5 Years

Episode Date: January 8, 2026
Host: Will Smith
Guest: Adam Vandermyde, Former Owner of Petro West

Overview

In this episode, Will Smith interviews Adam Vandermyde, who acquired Petro West—a B2B blue-collar business in fuel infrastructure—and sold it five years later for $14.5 million, netting an 80% ownership share. The conversation covers Adam’s background, the unique “try before you buy” CEO offer that derisked his entry, the strategic changes implemented to professionalize and grow the business, surviving a near-disastrous project, and why and how he timed his exit to perfection. Adam shares candid insights into the personal and operational challenges, culminating in a life-changing outcome.

Key Discussion Points & Insights

Adam’s Background & Initial Reluctance

• Background: MBA graduate, strategy consulting, then a stint as COO in a PE-backed firm, with M&A and operational leadership experience.
  [05:09]
• Reluctance: Multiple rejections of the Petro West opportunity due to risk aversion, lack of small business funding experience, personal situation (family with four children), and COVID uncertainty.
  "I realized I didn’t know what I was doing when it came to buying something for myself." (Adam, 08:42)

Unique ‘Try Before You Buy’ Entry

• Offer: After multiple “no”s, the sellers (encouraged by Adam’s brother-in-law, the business broker) offer Adam the CEO role with an LOI and agreed purchase price, letting him run and assess the business before committing to buy.
  "We hired you as our CEO. You run the business, you kick the tires... If you add any value, that's yours." (Adam, 25:00)
• Compromise: Sellers require Adam to buy 5% of the business upfront (~$250k), ensuring skin in the game.
• Outcome: After six months as CEO, Adam is convinced and moves forward with acquisition.

Deal Structure & Financing

• Final Price: $4.5 million (~3.5x EBITDA).
  [39:23]
• Financing:
  • 50% seller financing
  • 40% SBA loan
  • 10% equity (including Adam’s initial 5%)
• Equity: Adam ultimately owns 80%. He strategically brings in an operations leader and a sector expert as minority partners, structuring equity to minimize their exposure to SBA personal guarantees.
  "I ended up owning about 80%, and then had smaller portions for others." (Adam, 37:41)

Professionalizing & Growing Petro West

• State of Business at Acquisition:
  • $15M revenue, ~$1.3M EBITDA, 60 employees
  • Heavy focus on construction (65–70% of revenue), less on recurring service contracts
• Strategic Shift: Adam refocuses Petro West from a construction company to a service company with construction capability. (Service contracts = higher margin & “stickier” revenue.)
  "We flipped it on its head and became a service company that also did construction." (Adam, 15:55)
• Initiatives:
  • Professionalizing back office (moving from folders/paper to robust processes)
  • Introducing customer-focused roles (customer concierge)
  • Data-driven sales outreach (reengaging former clients)
  • Expanded preventive maintenance and subscription offerings
  • Restructuring the organization to improve span of control and add managerial capacity
• Results after 5 Years:
  • Revenue grows to $23M
  • EBITDA grows to $2.3M
  • Service revenue increases by nearly 50%
  • Highly improved customer retention thanks to enhanced service levels

Adversity: The California Project Crisis

• What Happened: A construction project in California fails post-installation tests due to a supply chain-driven product substitution—requiring them to rip up and reinstall underground piping at their expense.
  [48:22]
• Financial & Operational Consequence:
  • Over $1 million lost in EBITDA that year
  • Five times, they had only “two weeks of cash left”
  • Restructured seller note payments; extended bank lines; partners injected more capital
• Resolution: The company survives with no legal or reputational damage, ultimately emerging stronger.
  “It was the scariest, toughest, hardest thing I’ve ever done, without a doubt.” (Adam, 52:56)

Leading Change & Company Culture

• Approach: Listened closely to employees, implemented their ideas, made changes bottom-up, prioritized transparency (company-wide updates, engagement surveys).
  "I went as fast as I felt they could absorb it based on the feedback." (Adam, 58:58)
• Political Capital: Demonstrated improvements built trust, making further changes easier.
• Culture Shift: Moved from tightly-controlled, secretive management to empowered, trust-based leadership.

The Path to Exit

• Market Timing: Noted influx of private equity into the fueling/construction market—decided to time the sale when the company’s performance and the market both peaked.
  “We’re going to build the West. It’s just a matter of who we’re going to partner with.” (Adam, 64:01)
• Preparation: Hired an investment banker despite in-house M&A experience. Created a competitive buying environment.
  "They absolutely brought way more than value to that, to the conversation.” (Adam, 67:38)
• Key Exit Metrics:
  • Revenue: $23M
  • EBITDA: $2.3M
  • Multiple: 7x (up from 3–3.5x at acquisition)
  • Sale Price: $14.5M
  • Adam rolls $1M into the new entity and remains regional director post-sale

Personal Outcomes, Wealth, and Reflections

• Adam clears ~$9.5M pre-tax, owning 80% of the business at exit (after debt).
• Best Decision: “The hardest thing I’ve ever done, but the best decision I’ve ever made.” (Adam, 76:19)
• Post-Exit Mindset: Surprisingly frugal, now thinking about compounding wealth and new ventures.
  “Now I’ve got another company… of some money that I want to put to work, and I want it to make work as I’m sleeping.” (Adam, 77:09)
• Employees: Every employee received a bonus after the sale; Adam describes the emotional satisfaction of sharing success.

Notable Quotes & Memorable Moments

• De-risking via Paid CEO Tryout:
  “We hired you as our CEO... You kick the tires... If you add any value to the company while you're there, that's yours.” – Adam, [25:00]

• Honoring Customers, Even When You Don’t Have To:
  “We stepped up and did the right thing… There was no bond claims on the job, no legal actions… That actually helped us.” – Adam, [51:10]

• Operating Focus:
  “Every decision we made was: how do we maximize EBITDA? … I just didn’t care about revenue.” – Adam, [68:18]

• Sharing the Win:
  “Jackson bonused every single employee in the company...[T]hose texts and the conversations and the tears and the hugs... That was awesome.” – Adam, [79:04]

• Reflection:
  “The path, the journey has been fantastic. I’m a much, much, much better manager, person, businessman than I was before. And yeah, it’s certainly nice to be rewarded for that as well.” – Adam, [76:36]

Timestamps for Major Segments

| Time | Segment | |------------|----------------------------------------------------------------------------------------------| | 04:44 | Adam’s background & acquisition intro | | 08:42 | Reasons for declining the business initially | | 25:00 | ‘Try before you buy’ CEO arrangement — de-risking the acquisition | | 39:23 | Deal structure, financing, and equity split | | 42:33 | Strategic shift from construction to service, recurring revenue | | 48:22 | California project crisis: "The hardest thing I’ve ever done..." | | 58:58 | Leading rapid, bottom-up change; management style | | 64:01 | Recognizing when to sell; industry dynamics | | 67:38 | Why Adam hired a banker; preparing process for exit | | 70:21 | Managing to EBITDA above all else | | 73:27 | Exit terms: 7x multiple, $14.5M sale, $1M rollover | | 76:19 | Post-exit reflections, mindset, compounding wealth | | 79:04 | Bonusing employees after exit; most satisfying part of the journey |

Summary Takeaways

• De-risking an acquisition can be creative and a major win for both buyer and seller. The “tryout” as CEO allowed Adam to overcome his risk aversion, build trust, and identify real opportunities.
• Professionalization, analytics, and customer focus transformed a solid business into a highly desirable acquisition target. Shifting revenue mix toward higher-margin service and empowering employees were key levers.
• Even with all the right fundamentals, every acquisition involves existential risk. The California construction crisis nearly ended the company. Relationships, flexibility, and leadership mattered as much as any process.
• Exit timing matters: Adam leveraged market trends and internal performance to maximize value, doubling the business and achieving significant multiple expansion.
• Personal transformation and shared victory: Adam finishes wealthier, wiser, and deeply appreciative of his team—ensuring they shared in the exit was a highlight of his entrepreneurial journey.

Connect with Adam: [LinkedIn link in show notes]
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