Bootstrapping Two Freight Companies to $60M: The HTL Freight Success

Bootstrapped Acquisitions in Logistics: The HTL Freight Story

Acquiring a business can be a daunting task, but for Brian Boland and Onu Okebie, it was a path to unprecedented success. These two entrepreneurs turned a single freight brokerage into HTL Freight, a national logistics platform valued at over $60 million in just four years. Their journey is a testament to the power of bootstrapped acquisition strategies in fragmented markets.

Why This Matters

The logistics industry is highly fragmented, with many small to medium-sized businesses operating independently. This fragmentation creates opportunities for savvy entrepreneurs to consolidate operations, optimize efficiencies, and create significant value. Boland and Okebie's approach offers a blueprint for others looking to navigate this complex landscape.

The HTL Freight Journey

The Spark

Boland and Okebie's entrepreneurial journey began during their MBA program at Emory University. An entrepreneurship through acquisition course ignited a lightbulb moment. They realized that acquiring a profitable business wasn't just for private equity firms; it was something they could do themselves. This realization led to an emergency meeting at Okebie's house, marking the beginning of their business acquisition hunt.

Finding the Perfect Business

While still in school, Boland and Okebie spent countless hours analyzing listings, cold-calling owners, and flying out to meet potential sellers. Their diligence paid off in 2021 when they found a small freight brokerage in North Carolina. Valued at $1.5 million with about $500,000 in EBITDA, this business was their first acquisition. They used a combination of personal savings, an SBA loan, and seller financing to acquire full ownership without diluting their equity.

The Acquisition Blueprint

Boland and Okebie's approach to business acquisition is built on three fundamental principles:

1. Optimize Working Capital and Upgrade Technology: Immediately post-acquisition, they focused on optimizing working capital and upgrading technology. This approach helped them generate cash flow and improve operational efficiency.

2. Professionalize Operations: They professionalized operations to ensure smooth and efficient business processes. This step was crucial in generating cash for subsequent deals.

3. Delay Outside Capital: They intentionally stayed bootstrapped through their first three acquisitions to build a track record of success and retain full control. This strategy allowed them to approach investors with a proven track record, raising over $3 million on highly favorable terms for their fourth acquisition.

Scaling HTL Freight

Within nine months of their first acquisition, Boland and Okebie acquired a second company. A third acquisition followed a few months later. By the time they approached investors for their fourth acquisition, they were proven operators with scale. This allowed them to raise significant capital while surrendering minimal equity. Since then, they've completed a fifth acquisition, growing HTL Freight into a national logistics platform with operations across multiple regions and over 70 employees.

Practical Tips for Aspiring Acquirers

Conduct Thorough Due Diligence

Boland and Okebie's success can be attributed to their meticulous approach to due diligence. They spent countless hours analyzing listings and meeting potential sellers. This thoroughness ensured they found a business that aligned with their goals and had the potential for growth.

Optimize Working Capital

Immediately post-acquisition, focus on optimizing working capital and upgrading technology. This step is crucial in generating cash flow and improving operational efficiency. By doing so, you can create a foundation for future growth and acquisitions.

Professionalize Operations

Professionalizing operations ensures smooth and efficient business processes. This step is essential in generating cash for subsequent deals and creating long-term value.

Build a Track Record

Staying bootstrapped through the early stages of acquisition allows you to build a track record of success. This strategy enables you to approach investors with a proven track record, raising significant capital while surrendering minimal equity.

Important Takeaways

The Power of Bootstrapping

Boland and Okebie's approach highlights the power of bootstrapping. By staying bootstrapped through their first three acquisitions, they built a track record of success and retained full control. This strategy allowed them to raise significant capital on favorable terms for their fourth acquisition.

The Importance of Operational Excellence

Operational excellence is a key driver of value creation. Boland and Okebie's focus on optimizing working capital, upgrading technology, and professionalizing operations helped them generate cash flow and improve operational efficiency. This approach was crucial in their success.

The Value of Strategic Timing

Strategic timing plays a critical role in business acquisitions. Boland and Okebie's decision to approach investors after building a track record of success allowed them to raise significant capital on favorable terms.

Conclusion

Brian Boland and Onu Okebie's journey from college graduates to successful entrepreneurs is a testament to the power of bootstrapped acquisition strategies in fragmented markets. Their approach offers a blueprint for others looking to navigate the complex world of business acquisitions. By conducting thorough due diligence, optimizing working capital, professionalizing operations, and building a track record, aspiring acquirers can create significant value without surrendering equity control.