Chenmark (Holding Company) Operating Manual: Boat Tours to Dough Manufacturing


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Chenmark is one of my favorite holding companies.

In 7 years, they've bought 30+ companies from landscaping to bout tours. All self-funded.

Here's a breakdown:

Chenmark Companies:

• 3 Landscaping / snow removal co's

• Boat tour businesses, Maine & Florida

• Network of paint distributers, Canada

• Frozen dough manufacturer, Canada

• Mosquito control business

• Fruit tree farm, Tennessee

First Deal:

• Landscaping & snow removal in Maine

• Couldn't raise money so creative deal

• Self-funded: SBA + large seller note

• Friends & family equity covered rest

• Sellers ok with a large seller note


• Own 100 companies for the long term

• Optimize for long-term free cash flow

• All co's have own CEOs / managers

• Be internally funded

Average Deal Now:

• Historically 50% equity, 50% debt

• Typically paid around 4x, freak out over 4.5x

• New deals aggressively debt financed since they have low debt HoldCo-wide

Seller Note:

• Seller note always - ties the owner to a successful transition

• No earn-outs, doesn't make sense for owners retiring

• If they really don't want a seller note it is a bad sign

• Deduct from seller note if claims inaccurate

Go Fast, Go Slow:

• Bought 5 companies in 2/3 years, took 2 years off to digest

• Internally funded so have to build up cash again

• Set shared services up to integrate faster

Shared Services:

• Tech - Protect cybersecurity and build a layer on top for better reporting

• Recruiting - Biggest problem and everyone bad at this, adds a lot of value

•  Marketing - Local firms are a bad value, not a founder competency

One Team. One Dream.

•  Operators get a cut of cash flow across the portfolio.

•  Creates a team environment and incentive to share knowledge across companies.

•  Can buy up to 100% of annual bonus in Chenmark stock during annual liquidity window.


•  Recruited through search fund community often

MBAs and undergrad business programs with few years of experience.

•  Try to bring in-house to teach approach, give operational experience, and match with new acquisitions if they want to run it.


• SBA loan + large seller note to get started

• Buy little monopolies. Run them for cashflow

• Matchmake between operators and capital. Get incentives right.

• Reinvest cash to buy more companies.

If you are interested in buying, growing, and selling small companies, check out my course & community on it at

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