Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

*********************

There’s a certain mystique to successful programmatic acquirers - but is it justified? So many HoldCo and Independent Sponsor investors turn up their noses at would-be founders who lack M&A or PE experience… and I think they’re missing out.     

So imagine my excitement at meeting Jeremy Schuermans at a Belgian Rollup Druid Gathering M&A event a few weeks ago. In his mid-30s, Jeremy teamed up with two friends to “buy an SME” on the side of a cushy corporate job flogging wood flooring. Thus Companions was born: part search fund investor, part micro-PE, and part Swedish-style HoldCo. 

The deal was struck on the eve of COVID, and the target’s clients were - you guessed it - B2B event organizers.

Undeterred, Jeremy & Co rolled the dice once more.

Now dedicated to Companions full-time, they acquired an HVAC contractor with a photovoltaic (PV) installation arm. Unfortunately, that didn't go according to plan either. Profits initially surged nearly 5x, then collapsed due to a cut in PV subsidies.      

OK, where is this story headed?

Less than 4 years later, Companions’ portfolio has ballooned to 19 companies structured in 11 verticals, with consolidated revenue of €130M. What happened in between - and what is Companions?  

Jeremy and I discussed: 

***

Quick one before you immerse yourself in the interview… You may have seen that we’re helping a U.S. Testing, Certification & Calibration HoldCo recruit their first-ever Head of M&A for the DACH region 🇩🇪 🇦🇹 🇨🇭

The HoldCo grew from 0 -> 30+ acquisitions in under 4 years. Still 100% founder-owned. Now ready to write to write their next chapter: in Europe.

Jobs like these don't come around very often. You will own the entire deal cycle: from the first convo through to closing. You will work directly with the founders.

You will have between 5 and 10 years of M&A and/or Private Equity experience, ideally gained within a Buy & Build platform, combined with native-level German skills. What’s on offer? A highly competitive compensation package (attractive cash comp + chunky equity) PLUS an opportunity to build the next Phenna.

Interested? Hit reply. Simple as that!

***

Alex Prokofjev (AP): Jeremy, let’s start with the Companions backstory. I looked at your LinkedIn profile: 7 years at Procter & Gamble, followed by another 7 years at the Belgian flooring giant Unilin. At Unilin, you were eventually promoted to Global MD of the Wood segment. You left a C-suite position at a €3B revenue company in 2021, in the middle of COVID. What happened there?

Jeremy Schuermans (JS): I started my career at P&G because at the time it was known as the “university” of corporate companies. Lots of internal education. Lots of after-work fun too. I already had a very entrepreneurial mind back then, but needed some discipline and structure. However, after 7 years I had grown tired of the rigidness and the corporate jargon. I wanted to become a bigger fish in a smaller bowl, with broader responsibilities in a more agile company. Unilin offered that. If you prove yourself at Unilin, you get promoted fast and do a lot of things. There is a lot of freedom.

Then, I took a small break to work on my startup called Ivex. We were developing flying cars. The company still exists, having pivoted to supply AI for self-driving cars. It’s profitable and growing. After the break, I returned to Unilin. However, I had already picked up the entrepreneurship bug. 

But what kind of entrepreneurship? Everyone around me was investing in real estate. I thought that buying an SME would be more fun, and a learning opportunity. So in 2019, with two friends, we acquired Onetec: a €1M turnover hardware and software vendor to B2B events. We hired a younger manager as the CEO. The start was very smooth… and then came COVID. There were zero corporate events for about 3 years. We lost all our savings. Now, the silver lining is that Onetec still exists, and we actually sold it to the CEO. That was the very beginning of the Companions story: we did a small deal and we failed, but it was a valuable lesson.

AP: So you bought a business with €1M in revenues, and it almost went bust during COVID. How do you go from this - without M&A or private equity experience - to raising €12M from Family Offices and building out Companions?

JS: It was very tough! We didn’t know how to raise money, we didn’t know what to present or who to talk to. In the first round, we were still invested in startups and real estate, and we mixed them with our plan of acquiring SMEs. Needless to say, our pitch to investors was unconvincing. 

Then we decided that, with the last savings we had, we would acquire a first company in order to prove that our idea and our model could work. So at the end of 2022 we acquired our first company, an HVAC business doing €12M turnover and €300K EBITDA. We put in two young managers from my network: a friend of my brother and a family member.

Then we dumped all the startups and sold the real estate in order to continue. And finally we managed to convince friends, fools and family to give us €4M. We acquired 3 or 4 more companies. In mid-2024, we raised again. This time, everybody followed, with two Family Offices coming in as anchor investors. We were off to the races! More than 2 years later, we are still living off this capital. We might need to do one more round, but I hope not.

AP: Jeremy, a 2.5% EBITDA margin sounds pretty low for an HVAC business. Walk me through your thinking. Did you have a value creation plan?

JS: Today, Companions has a staff of 18, of which 1/3 is M&A and 2/3 portfolio work. Still, I like to do very simple math for every acquisition. When I see a business running at 2-3% EBITDA margin, while other players in the sector can muster 15%, there is no reason why the laggard can't pull up. If a company has few assets or capex, the margin delta is mostly about efficiency, reputation and pricing.

How did we source this deal? Then and now, we mainly work through brokers.

AP: Do you face a lot of competition for those deals, even if they’re brokered? Or are you usually the only buyer?

JS: Today, in this zip code the competition is HUGE. We see an enormous number of MBI candidates trying to buy companies, backed by search fund investors. Then you have Companions-type HoldCos, and of course microcap PE.

AP: In the case of that HVAC business, were you able to subsequently grow revenue and EBITDA from the base level?

JS: In the first year, yes: we grew EBITDA from €300K to €1.4M. This felt amazing! Alas, the company had meaningful exposure to PV [solar panel] installation. We knew that when PV subsidies were cut the market would usually nosedive… but come back within 6-8 months, and keep growing. Except that in our case, the market collapsed and still hasn't come back, 3 years later.

As the hype around solar panel installation has evaporated, both the B2C and B2B sides are struggling. Setbacks piled up. Being a first-generation PV installer, the company had sold 20-year warranties…

AP: Oh no!

JS: …Except that the inverters have a lifetime of 14 or 15 years. Not 20. During due diligence, we hadn't checked the sales contracts from 20 years ago. At one point, all these inverters started to break. Not only were sales down by half due to the subsidy phase-out, but we also had an additional warranty cost of circa €150K per year to contend with. We were unfortunately forced to discontinue the business. This was, let’s say, an eye-opening experience.

AP: Fast forward to 2026. Companions is highly selective. According to your website, your raison d’être is finding niche businesses with sub-€2M EBITDA in fragmented industries, and growing them to €3, 4 or 5M of EBITDA. That sounds a lot like the Swedish HoldCo playbook, except that you don’t necessarily intend to hold these companies forever. So my next question is: what sort of returns do you target? What is your holding period?

JS: We started at sub-€4M, then lowered to sub-€3M, and now we’re in the sub-€2M EBITDA range. Not because we don’t want to do bigger tickets, but because we want to operate below the typical private equity thresholds. The flip side is that these small companies carry an elevated risk profile - which we try to compensate with our setup. We have 12 FTEs helping the PortCos to improve, digitalise, and install processes and pricing strategies. 

Our underwriting is conservative. Our base case assumes zero real growth (inflation only), overlaid with a fixed debt repayment schedule and the CEO’s cost. Our minimum IRR is 25%, but preferably above 30%. EBITDA growth initiatives, add-ons and working capital reductions are the cherry on the cake.

What’s our holding period? We are not a fund; we can hold for as long as we want. For us, the duration is based on the agreements we have with the MBI candidates. Mostly 5-7 years, but sometimes as short as 3 years, if we see a clear value path before starting. Now, if we are 6 years down the road and everybody is happy, we would continue. Conversely, if the manager is keen on a liquidity event or wants to join a larger group, we can start the exit process.

Do we have a clear value creation plan before we start? Yes and no. Obviously, at this deal size, we lack the firepower of a “traditional” private equity fund to do comprehensive work on deals we haven’t won yet. However, consider this. Businesses that have been around for 10 years will probably be here tomorrow… and in 10 years as well. When you see that the industry is moving in the right direction, and the business has a solid reputation and good people, there is no reason why we would not be successful.

Do we already have a potential buyer when we start? No, because we assume that if we manage to grow a €1M EBITDA company organically to, say, €2-2.5M EBITDA – which is always the ambition – and do 2-3 add-ons to reach €4-5M in EBITDA, there will always be potential buyers. It could be the manager, an industrial player, private equity, a family office looking for a long-term recurring business – or it could be ourselves, if the manager wants to stop but we still see opportunity.

AP: When we first spoke, you threw out some very impressive numbers: run-rate revenue of €130M - all of that with only €12M of equity raised. How did you manage to stretch the money this far? Is there a range of multiples you pay? What percentage of the purchase price is upfront equity versus upfront debt versus deferred?