Gridiron Capital featured in Crain’s Cleveland

LeafFilter president credits private equity partnership with ‘supercharging business’

October 31, 2017

Matt Kaulig knows a thing or two about growing a business.

The former University of Akron quarterback started his first LeafFilter gutter guard office in his basement in 2005, logging sales of $300,000 that year. Two years later, Kaulig opened a Hudson office and sales jumped to $1.75 million. In 2008, with Northeast Ohio pretty well covered, he added three LeafFilter locations in Pittsburgh, Columbus and Toledo and finished the year with $5.4 million in sales. Kaulig launched three offices a year from then on and by the end of 2015 – with $89 million in sales – he bought the business outright and founded LeafFilter North Inc.

What Kaulig didn’t know much about – at that time, anyhow – was how a partner like Gridiron could help him.

“Honestly, I was not sure what private equity meant,” he said. “I did not even know what EBITDA (earnings before interest, taxes, depreciation and amortization) was.”

In the last 18 months, he’s gotten to know both very well. In September 2016, LeafFilter closed an investment deal with Gridiron Capital of New Canaan, Conn. The private investment firm, which specializes in partnering with middle market companies, provided strategic, marketing and operational expertise as well as a capital infusion, according to Kaulig.

“We did $112 million in revenue last year,” he said.  “These guys came in and supercharged our business, and we will do almost a $180 million this year.”

During the first of two fireside chats, Kaulig sat down with panel moderator Gregg Eisenberg, managing partner of Benesch, and Joe Saldutti, managing director of Gridiron Capital, to share his company’s experience with private equity.  

Eisenberg: Matt, the business is going great. It’s growing every year exponentially. You are expanding geographically, adding people. Why did you seek out a partner like Gridiron?

Kaulig: With an investment partner, you take a lot of risk off the table. That is the main thing it meant for me. You want things to go on forever. You want things to be great. You want to keep growing exponentially, but stuff happens. Stuff happens with the economy, with products, with competitors. You just don’t know. I had built a business to $100 million over 11 years, and I could keep doing that forever and hope everything goes well, or I could take some chips off the table, so to speak.

Saldutti: Also, there are opportunities in the marketplace where we saw we could bring value as a partner. Every time Matt opened a new office, for example, he was digging into his own pockets. It was great for him to have a partner to grow the business together.

Eisenberg: Why did you decide on Gridiron?

Kaulig: It was really meeting Joe and the team. You don’t sign anything, you don’t do anything, until you go meet everybody. They’re doing diligence on the business, but you are doing diligence on them. … What Gridiron brings or brought was all the business expertise. These guys are smart, and they know what they are doing.

Eisenberg: Joe, it’s a pretty robust market right now. How did you decide you wanted to do a deal with LeafFilter?

Saldutti: It starts with the LeafFilter leadership. We genuinely liked each other, and we could talk openly about the business. Even during the due diligence process, there were some gaps that we found, but it was not an obstacle because we could talk about how we could solve those gaps together. Also, we had to step back and say, ‘Can we really support this business and help it grow? Do we match up well?’ Because if we do not match up well and it is just about capital, then it is not a good partnership. We saw some things – whether that was evolving the organization to be scalable, bringing new ideas to product development or saying, ‘Hey, you guys have got almost 200,000 satisfied customers, and you only sell one thing to them and it never breaks and has a lifetime warranty. Why don’t you sell more stuff to them?’  We just thought we could really help them grow the business.

Eisenberg: What has happened since the partnership was established?

Kaulig: My strategy was to begin to open up about three offices a year, because when we open offices, we rock. We start making money right away. Obviously, when we told that to these guys, they said, ‘You need to open more offices.’ Well it’s the people; it’s not so easy. So, one of the things we did was hire a vice president of talent, get more recruiters and develop what is almost a recruiting agency to hire people and get out in front of it. As a result, last December we decided to open one office a month. We have opened 12 offices in the last year. We would not have been able to do that without Gridiron Capital’s professionalism, their leadership and even their contacts.


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