Introduction
Today we’re diving into a powerful business acquisition story with Matt O’Brien. After successfully selling his FedEx route business at the peak of the e-commerce surge, Matt acquired Professional Fence – a commercial fencing company in LaGrange, Kentucky. In just two years, he grew annual revenue from $2.5 million to $4.95 million while maintaining healthy margins. His journey offers invaluable lessons for entrepreneurs considering buying an existing business.
Founder Success Story QnA
Matt, let’s start with that pivot from insurance to FedEx routes
Sure, so it was about a year’s worth of research and due diligence to really find out and understand all that I could about FedEx. It was actually introduced to me by a banker who was leaving his job as a commercial lender and had a client here in Louisville, Kentucky that was seeing these weekly deposits and saying ‘this seems pretty attractive, what exactly is it that you’re doing here?’ He shared that with me on his final day in banking and I said ‘wow, this is interesting, I need to learn more about this.’ So I did years worth of research and homework to try and find an opportunity. I found my first opportunity in Knoxville, Tennessee – one truck, one driver. But to have a contract with FedEx, you actually have to have what’s called two lanes. The second and third lanes I got through an interview process in St. Louis.
How did you get those additional FedEx lanes?
I got them through an interview process. What happens within FedEx is that as they’re growing, often times it’ll be new expansion of their freight lanes with no current owner. I was able to interview and get the second and third lane for free, but then I needed to buy the equipment, hire the drivers, and do all the onboarding. That was in 2018 and from there I had a small business to run.
During your research, were you tempted by other business opportunities?
I looked at all sorts of different verticals and never really went down the road of franchising. What made FedEx most appealing was the weekly direct deposits with no accounts receivables to chase down. You get the prior week’s earnings deposited the following Friday. There’s built-in infrastructure for organization with no sales to focus on – just operational efficiencies and how much you could grow within their network.
How big can you grow within the FedEx system?
They break you up in the linehaul world by what’s referred to as a hub, which limits how dense you can be in one geography. You might be able to put on 15 or 20 tractors in Kentucky, but no more in Tennessee. If you try to do the same in Virginia or Florida, that might be feasible. It’s their way of de-risking by limiting concentration in one geography.
How did you handle running this St. Louis operation remotely from Louisville?
I would try to be there every other month, with some one-day trips where I’d leave at 4:00 a.m. to catch drivers coming back from overnight runs, then those going out during the day, trying to be back for my kids the next morning.
What happened when COVID hit?
As the world was collapsing and everyone stayed home, logistics and goods delivery to front doors exploded. That happened through 2020. As we turned the calendar going into 2021, I realized I either needed to add more equipment or recognize we were at the apex and it was time to sell. We went to market in March 2021. By then I had 14 tractors around St. Louis. We had four full price offers on the first day and closed by August 2021.
What was your revenue and margins with the FedEx business?
Revenue was about $3 million on an adjusted basis. Margins in FedEx land are typically around 20 percent. We sold at 3.5 times EBITDA with about a million dollars worth of equipment value included in the sale.
What advice would you give to someone considering FedEx routes?
FedEx presents good qualities. If you value direct deposits and no sales element to your business, it’s attractive. But the likelihood of finding one concentrated to your geography is very low – your wait may be years. You have to open up your search. Also consider weather – northern United States is more challenging for operations due to snow and cold, with shorter equipment lifespans.
How did you find the commercial fencing business?
I was going to be ‘Mr. Mom’ for a minute after my FedEx exit. We closed on a Friday in August, and the following Monday I got a call from my broker friend asking for help with a local business listing. I was on a call with the seller the next day. The seller pivoted on me and said ‘Why don’t you buy me?’ I said I wasn’t ready, but about a month later I called back and said ‘Did you ever get that listing? That seemed attractive.’
What appealed to you about the fencing business?
Several elements: it was 100% commercial (I wanted to stay in B2B), it had a niche strength in baseball/softball/football fields (requiring specific acumen), and had recurring revenue from temporary fencing rentals for festivals and state fairs.
How did you address the risk that the seller’s son (key employee) might leave?
We engaged him during due diligence on several occasions. We found common ground – we were part of the same church, shared values. There was an element of faith, but we also engaged him in a two-year employment agreement that helped with security. He came to peace with not wanting to be the buyer due to debt concerns.
How did you grow revenue from $2.5M to $4.95M?
We got granular with our numbers, understanding fixed costs (burdens in construction world), updated our pricing strategy, improved operational efficiency with better organization of materials (job packs), implemented SOPs, and tracked metrics like time to get crews out the door. Though we didn’t have a dedicated salesperson, I personally focused on strategic relationships with general contractors.
What would you tell buyers looking at a commercial fencing business?
Focus on the people – what’s the makeup of the team? Do you have key employees driving the business? Also look at customer concentration. And critically examine equipment lifespan versus your loan term – in capital-intensive businesses, if equipment needs replacement before loan payoff, you could end up with debt on debt.
What happened with your trucking company acquisition?
We bought a business in March 2023 and divested in April 2024. We caught headwinds from increased insurance costs, rising human capital prices, and decreased freight values. Between operating capital and equity injection, it was at least $500,000 loss. The working capital burn was the main issue – I hadn’t put in enough initially.
What’s your thesis about B2B service businesses in tertiary markets?
Being in city centers is fine, but we found employee integrity is much higher in tertiary markets. For Professional Fence, we’re in LaGrange, Kentucky, a suburb of Louisville. The real value is neighboring counties and the workforce that comes with them. Commutes of 15-20 minutes versus an hour to the city are attractive to employees, particularly rural workers who are consistent and show up to work.
Matt O’Brien Business Stats
Matt O’Brien’s acquisition and growth of Professional Fence demonstrates what’s possible with the right business acquisition strategy. Starting with a $2.5 million revenue business, he implemented operational improvements that nearly doubled revenue while maintaining healthy margins. Here’s a breakdown of the business metrics that show his successful transition from buyer to growth-focused owner.
- Business acquired in late 2021/early 2022 after 9-month due diligence process
- Revenue grew from $2.5M at acquisition to $3.95M in 2023 (47% growth)
- Further revenue growth to $4.95M in 2024 (25% year-over-year)
- Gross margins maintained around 24% throughout growth phase
- Initial purchase price at 2.4x SDE and 2.8x EBITDA
- 8-10 employees at time of acquisition, now operating at significantly higher revenue per employee
| Year | Revenue | Growth |
|---|---|---|
| Acquisition (2021) | $2.5M | – |
| 2023 | $3.95M | 47% |
| 2024 | $4.95M | 25% |
Matt O’Brien Method
Matt’s approach to business acquisition and growth wasn’t about dramatic changes but systematic improvements based on data. He focused on levers he could control while respecting the operational foundation already in place. Here’s how he executed his growth strategy step by step:
- Preserved existing leadership by elevating the seller’s son to president position
- Implemented detailed tracking of fixed costs (‘burdens’ in construction)
- Completely overhauled pricing strategy based on accurate cost data
- Created organized ‘job pack’ system for materials to improve field efficiency
- Developed standard operating procedures (SOPs) for all key processes
- Implemented tracking of crew departure times with measurable goals
- Focused personally on strategic relationships with general contractors
- Maintained focus on people development to reduce attrition and build loyalty
Matt O’Brien Tools
While not heavily tool-dependent, Matt implemented practical systems to transform an operationally inconsistent business into a data-driven organization. The key was using basic tools to establish visibility into previously untracked metrics:
- Manual job pack system – organized materials with clear labeling to eliminate time wasted searching for components
- Simple tracking spreadsheets – initially implemented to monitor accounts receivable days (target: 65 days or less)
- Time tracking protocols – established measurable goals for crew departure times each morning
- Cost accounting system – detailed breakdown of fixed costs to inform accurate pricing decisions
- Basic KPI dashboard – focused on a few critical metrics rather than overwhelming data collection
Key Notes
Matt’s experience offers critical lessons for anyone considering a business acquisition, particularly in capital-intensive service industries. His successes and failures provide a roadmap of what to prioritize and what pitfalls to avoid when buying an existing business.
- Working capital is often underestimated in construction/project-based businesses – double your initial estimate
- Equipment lifespan versus loan term is critical – replacement cycles can create ‘debt on debt’ situations
- People are the most valuable asset – focus on retaining key employees through employment agreements
- Lack of documentation in acquired businesses represents opportunity, not just risk
- Tertiary markets often provide higher-quality, more reliable workforce than city centers
- Rural employees typically demonstrate stronger work ethic and consistency than urban counterparts
Get Started in Just 5 Steps
Matt’s journey from insurance professional to successful business acquirer shows that strategic business acquisition can create significant value. Follow these steps to begin your own acquisition journey:
- Identify industries matching your ‘intangibles checklist’ – look for consistent cash flow and operational simplicity
- When examining opportunities, prioritize people composition and customer concentration over pure financials
- Double your estimated working capital needs – especially crucial for construction and project-based businesses
- Validate equipment lifespan against loan terms to avoid future ‘debt on debt’ scenarios
- When acquiring businesses in tertiary markets, leverage the stronger work ethic of rural employees for operational stability
Conclusion
Matt O’Brien’s journey exemplifies how strategic business acquisition combined with operational focus can generate impressive results. By transitioning from FedEx routes to commercial fencing, he demonstrated that understanding industry dynamics, prioritizing people, and implementing systematic improvements can drive substantial growth. His experience serves as both inspiration and cautionary tale, highlighting that business acquisition requires careful due diligence, adequate working capital, and realistic expectations about growth potential. For entrepreneurs considering this path, Matt’s story provides a valuable blueprint for identifying opportunities, managing transitions, and creating value in established businesses.