Introduction
buying multinational companies requires strategic vision and global expertise. This interview with Adam Salmen reveals how he acquired a $25-50 million revenue multinational steel equipment business through Nova Stone, overcoming significant hurdles in the process.
Founder Success Story QnA
You’d always wanted to be an entrepreneur, Adam, but worked in corporate for 15 years. So, what was it that led you to finally jump into entrepreneurship?
I wouldn’t say that I was corporate specifically. I’ve been on this entrepreneurial path for my whole career really. I went to Babson’s master’s degree in global entrepreneurship. I worked in the startup realm, moved to San Francisco, did that in like 2009, 2010. I found the startup world to be kind of fickle. One of my professors at Babson introduced me and I was writing some case studies in the entrepreneurial world at Babson and after doing the global entrepreneurship program working and living and studying and doing consulting work in US, Europe and in Asia. I was brought in by Bayer Material Science to go do corporate strategy in China. So, that was where I jumped out of living in San Francisco doing the startup world and went in to help big companies be more lean and entrepreneurial thinking. I’d spent several years in Asia doing corporate strategy and what they call strategic marketing. Then my girlfriend at the time who’s now my wife moved over to China with me and we moved to Europe in 2014. Spent several years in labor cusen in Germany. Had a couple kids along the way. It was 2020. We’d been abroad for like 10 years or so and I’d been doing other entrepreneurial things maybe on the side. A lot of my colleagues were just saying like, ‘Adam, you’re way too entrepreneurial, you don’t fit into the corporate mold where you kind of just play steps on the ladder.’
One thing that you’d said to me in the precall was that a professor at Babson steered you away from quote arts and crafts. What did you mean by that?
We’re always tinkering around with like, can we do this thing? Can we do that? In terms of new ideas, like the startupy ideas, can we get this here and sell it? When we were in the global entrepreneurship program, can we like manufacture the shirts for the Babson store? He’s like man that is arts and crafts stuff, think on a little bit higher level, think about global industry. He was a Swiss professor, spent time at IMD in Switzerland also at Babson and he’s like you really need to go after like large industry and he was actually the one who made the introduction to Bayer Material Science. And so I really got this foray into large heavy industry on a global scale.
And so when you take a smaller slice of a bigger pie, that means that Nova Stone in this case takes more equity in the final enterprise. Can you share what the terms are that they provide?
I don’t know that I want to get into the terms so much, but they do get a part of the carried interest, which is in line with what I’m getting. And so we split that part up. With the search fund model, there is a percentage of carried interest which comes along. Meaning after equity investors get their money back and their preferred rate of return, then based on different performance metrics, you will get carried interest tranches which vest over time performance and just consummating the acquisition. I am not sharing Nova Stone’s terms here because I’m not sure I even know them exactly, but it’s probably in the ballpark of what many of the accelerators are, which are the traditional search terms. Those are basically 25% carry – 25% of the final proceeds of the entire project go to the searcher but those are in tranches of 3/8 and a 3/8 and a 3/8 based on tenure and performance.
Okay. Tell us then about what the parameters are of what your search looked like. You’ve touched on it a number of times the sort of flavor of company that you wanted but can you be more specific?
I was looking for global companies obviously global industrial upstream so basic materials basic chemicals B2B so business-to-business you don’t work with consumers. Really looking for something which I was kind of touching on before which is this global and industrial nature. Looking for enterprise value under 50 million. Of course, if I’m going to have other investors and make it worth it with my wife, like I had to be kind of over $10 million in enterprise value.
You said all these interesting companies that you found. That’s one of the fun parts of this, you know, where you’re playing here. This industrial global upstream, you know, this is a very unfamiliar world to me. Give us an example or two. And then also what size business I imagine businesses like this are very large businesses.
One was a company which was making roof racks for Toyotas and the Tacomaomas. They had gone through the process to automate their production. They would build it and then they’d have robotic laser cutters that were cutting these things out having robotic welders. There was one company I became friends with the sellers. They had a great exit. Then if we went more into the B2B space we found this really cool company in Minnesota which makes prefabricated tensioned fabric buildings. They were manufacturing buildings and they would sell them all over the world. Another one we ended up chasing was technical ceramics, gases, ore and moving lots of earth. We wanted something with good margins, not very capital intensive and not a lot of working capital necessary.
Let’s hear about this company.
We were able to find a multinational company that supplies steel manufacturing equipment to America’s steel manufacturers. We have operations in Canada, US, Mexico, in Asia, we’re selling into South America, we’re selling into the Middle East, we’re selling into Europe. It’s a global industrial company which helps keep vital assets such as steel manufacturing intact. This company has a super wide portfolio. They have a network called manufacturing group which is a network of manufacturers that we vetted with ISO standards. One of the cool things about this company is they help at all of the steel equipment you would need in order to manufacture steel. It can go from the mining equipment down into the coke and sinter plants. It can go then into this iron making process. And then iron going into steel is really refining out some of the impurities.
In all of those countries you just named, there are steel is manufactured. Those are where your customers and you have boots on the ground. You either have a location or you have an agent on the ground that is selling into these customers.
That’s right. Our remit to a large degree is North America where we focus. We have offices and kind of we call them product managers because they’re really stewarding our process with the customers. Are not necessarily just sales people because there’s a lot more of a consultative aspect but we have people and enterprises in Canada, US, Mexico and then we work through an agent network in other parts of the world into Brazil, Chile and then we have a kind of a Middle Eastern agent network in India and in Bahrain we have other agents in Germany. And so, we’re truly a global company. And all of our customers are the steel manufacturers of the world.
Numbers around the business, can you share that?
Topline revenue between 25 and 50 million. EBITDA is in the high single digit millions.
What was the hair in this particular deal? I’d say what are some of the things which investors had to get comfortable with?
One is the scale. This is not something which searchers usually go out for. Two is probably the industry dynamics around the steel industry. You know it can be linked to infrastructure spending which can be cyclical. We got more comfortable with that because there is an MRO aspect and steel manufacturers have to pay $4 billion a year just in the United States to keep the lights on with the MRO spending. Based on the revenue of this company, we thought that it was just a drop in the bucket and there was definitely room to smooth out any cyclicality in the industry. We also had concerns about the consolidation of many disparate company entities around the world being a really cumbersome process. This company had done really well at cobbling it together but needed some accounting work to make it super efficient. And then I think just the geopolitical aspect of the steel industry like if there’s anything going into an election year it’s you know we want the American steel workers to stay productive.
Adam, I want to hear about the fundraising. What can you tell us?
Fundraising is a messy process. It’s like a revolving door. There’s always people going in and going out. It happened that not all of the investors who came in initially wanted to stick around. With the unique nature of this business, someone’s like, ‘Wow, man, you are dancing with giants.’ One investor said, ‘I still remember that quote on their rejection letter – this is just too big and I don’t understand it and it’s away from my core skill set as an investor.’ Whereas in the past I would have said okay well this deal’s dead, I kind of was like no I really have conviction around this opportunity. We were able to cobble it together. At one point, we had this idea that maybe we would try a crowdfunding round. We put it online and we were able to raise over $1.3 million that we raised and the night before the fundraising closed, we got a call from the SEC and they said like, ‘We don’t think this is compliant.’ And so we quickly backstepped and we ended up giving that over a million dollars back. It was not able to go forward. But I’m happy about that because we have a lot of investors now. None of which are the thousands of people like it I don’t know how to handle K1s for those types of investors. Ultimately, it was you know for me to kind of share the vision and the conviction and the opportunity. Finding a great debt partner is amazing. I was so lucky that I found Key Bank who did a great job. They were there early on saying, ‘Yeah, like we like the financials. We like the opportunity. We’re in on this thing.’ Having like a wavy lender is something which I’ve seen other searchers really struggle with. Key Bank did an amazing job.
When did you close, Adam?
We closed on the 1st of October, 2024.
Have you found it to be the business that you thought it was?
I would just say like one thing or caution to any searchers like you please don’t buy a PowerPoint presentation and don’t get fooled by a SIM or just the financials. What I bought was sitting across the table from the sellers and judging them that they were upstanding, smart and ethical people. I can say, ‘Yeah, I totally have bought what I thought I was buying.’ Now, there are small things where it’s like, ‘Oh, I didn’t know that didn’t work or this thing or whatever.’ But overwhelmingly I bought a really smart team that’s making good decisions and there the POS are real, the margins are real and the opportunity is real. The company’s been in business for 30 years like you don’t just happen upon that right so it’s robust. I still work really closely with the founders and they’ve been teaching me a lot. I had a lot of faith what I bought was that relationship with the sellers and I have complete confidence in that.
Any final reflections on now that you are on the other side of an acquisition where in fact you did buy a large revenue-wise business in an enormous kind of a large TAM you know multinational steel manufacturing business. Any further reflections on that? Was he right?
He’s certainly been a guiding force in my career. Thank you, JP Jane. He’s I hope you listen to this someday. He’s been a great mentor to me. I don’t know, maybe I’ll leave with one final quote. You know, are good things good or are bad things bad? I don’t know. Let’s wait and see. And so I’m really happy to be here. This has been a defining point in my career. But I’m pretty sure that it’s good. But even bad things can lead to great opportunities. And it’s those that kind of run into chaos who are rewarded ultimately. So here’s this next phase of chaos which I’ve thrown myself into. My wife followed me in here and thanks to her for following this crazy idea and hopefully it leads to great outcome.
Adam Salmen Business Stats
Adam Salmen acquired UMECH (United Metallurgical Equipment Companies of Cincinnati), a multinational company that serves the global steel manufacturing industry. Through strategic positioning and leveraging his global experience, he built a business with significant revenue while maintaining impressive operational efficiency. Here are key metrics from his acquisition:
- Annual revenue between $25-50 million
- EBITDA in high single-digit millions
- 28 employees across global operations
- Revenue per headcount demonstrating exceptional efficiency
- Operations spanning North America with agent networks globally
- Serving steel manufacturers in multiple continents
| Business Metric | Value |
|---|---|
| Annual Revenue | $25-50 million |
| EBITDA | High single digit millions |
| Global Employees | 28 |
| North American Team | 8 |
| Geographic Coverage | 15+ countries |
| TAM (Total Addressable Market) | $4 billion annually (US MRO) |
Adam Salmen Method
Adam’s approach to finding and acquiring multinational companies centers around leveraging his global experience while focusing on strategic market opportunities. His method combines industry knowledge with partnership building to create sustainable growth. Here’s how he did it step by step:
- Partnered with Nova Stone to access larger-scale opportunities beyond typical searcher acquisitions
- Focused exclusively on global industrial upstream businesses with $10-50M enterprise value
- Evaluated 83 companies over the search period, submitted 12 LOIs, had three under LOI
- Targeted “big hairy” deals rather than clean small opportunities for better ROI potential
- Used global network from Babson and IMD to validate opportunities and connections
- Conducted extensive diligence (nearly a year) to navigate complex international accounting systems
- Leveraged personal credibility to secure investor backing despite unconventional business model
Adam Salmen Tools
Adam leveraged specific tools and platforms to streamline his multinational acquisition process and enhance operational efficiency post-close. These strategic resources helped him navigate complex global business environments while maintaining clear financial visibility across multiple currencies and entities:
- Axial platform to source multinational deals beyond typical searcher networks
- Nova Stone ecosystem for investor access, legal documentation, and M&A expertise
- ISO certification systems for validating global manufacturer partners
- Key Bank debt financing for stable capital structure without predatory terms
- RFQ management systems for handling customer equipment requests globally
- Multi-currency accounting systems to consolidate international financials
- Agent networks in key international regions to extend sales presence without fixed costs
Key Notes
Adam’s journey offers crucial insights for entrepreneurs seeking significant multinational acquisitions. His perspective challenges conventional searcher wisdom while delivering substantial results. These key takeaways highlight what made his approach successful:
- “Dancing with giants” requires confidence in your unique value proposition to secure investor backing
- “Big hairy” deals often present better acquisition multiples than “clean small” opportunities
- Global supply chains in heavy industry remain resilient despite geopolitical headwinds
- Steel manufacturing’s $4 billion annual US MRO spend provides stable revenue foundation
- Employee ownership stake creates alignment during transition and post-acquisition growth
- “Quality of earnings” matters more than industry cyclicality for proper valuation
- “Putting your name on the building” builds credibility essential for complex multinational deals
Get Started in Just 5 Steps
Following Adam’s blueprint, you can position yourself to acquire significant multinational businesses rather than settling for smaller “arts and crafts” opportunities. Here’s how to get started on your own path to buying multinational companies:
- Develop specialized expertise in global industrial markets where your background creates unique advantage
- Target the “big hairy” quadrant – large deals with problems you uniquely know how to solve
- Secure experienced partners like search fund accelerators to access larger deal flow
- Build rigorous due diligence processes for international accounting and compliance systems
- Focus on relationship building with sellers who value continuity and shared vision over maximum price
Conclusion
Adam Salmen’s acquisition of UMECH proves that buying multinational companies is achievable with the right strategy and positioning. By focusing on global industrial markets where he held unique expertise, targeting appropriately “hairy” deals, and leveraging partnerships like Nova Stone, he secured a business with significant scale and international reach. His journey from corporate strategy to multinational CEO demonstrates that the “arts and crafts” approach to entrepreneurship doesn’t have to be the only path – with proper preparation and vision, entrepreneurs can successfully acquire and lead substantial multinational enterprises.