Jason Boer presents a compelling case for an acquisition of Big Leads, a customer acquisition platform specializing in targeted lead generation for in-market consumers. Big Leads operates primarily in four industries: mortgage, credit, insurance, and education, offering its services through diverse online marketing channels, including email, search, social media, and native ads. Founded in 2002, the company is entirely self-funded and has grown steadily, delivering nearly 10 million consumers to partners in 2021 alone.

The company’s unique value proposition lies in its multi-channel approach, combining digital advertising, affiliate marketing, and content strategies to acquire high-quality leads. Big Leads has built a reputation for providing businesses with well-qualified leads, helping them grow sales efforts. With a client list including some of the largest players in the mortgage, insurance, and education sectors, the company has established itself as a trusted partner in the lead generation space.

Big Leads has experienced solid growth, particularly in the mortgage and insurance sectors, with 2021 seeing a notable increase in revenues, largely driven by a pivot in the company’s operations. Despite this growth, Jason notes that the company is still operating without a formal sales or marketing team, which presents a significant opportunity for expansion. The company’s growth strategy focuses on targeting new verticals, such as health insurance and auto insurance, where Big Leads can capitalize on existing demand and use its proven marketing strategies to increase market share.

A particularly promising opportunity lies in expanding the company’s home services sector, where verticals like solar installation and bathtub replacement could quickly align with the current business model. Jason also highlights the potential for roll-up opportunities, where smaller players in the lead generation space could be acquired to increase market share and reduce competition. By strategically acquiring smaller competitors, Big Leads could grow its market presence and expand into other high-demand industries, boosting revenues and solidifying its position as a leader in the space.

In terms of financials, Big Leads has a strong track record, generating $61 million over the last three years with an EBITDA multiple of 4.26. Despite macroeconomic challenges affecting industries like mortgage and insurance, Big Leads remains a profitable and stable business, with a growth forecast of 15% across the next year. Jason and his team’s confidence in the company’s expansion potential, combined with a clear path to scaling operations, makes this acquisition highly attractive.

With a unique combination of strong financials, proven growth strategies, and substantial opportunities for market expansion, this deal is set to be a major player in the lead generation industry. However, Jason and his team will need to secure significant funding through private equity firms or family offices to complete the acquisition, as the deal is expected to exceed the capabilities of SBA financing.

Full Transcript:

Happy Thursday, everybody. Not seeing you guys for a couple of weeks. So, yeah, let me give you guys a quick update. Like, the last few weeks for me have been, you know, pretty busy.

I, I missed the call two weeks ago. I was flying to Knoxville for the upper echelon mastermind, which is absolutely unbelievable.

My book came out, yay, which I’m so excited about my book. So all the people that were at the Echelon Mastermind all got a signed copy of this book.

I have some incredible feedback. Thank you everybody for the really, really kind words. This was not easy for me. Right?

So, you you know, I’m a I’m a deals guy. I’m a maths guy. And whilst I’ve got all the technical knowledge that there is on buying and selling companies and doing roll ups and raising capital and all those different things, I could have easily written a technical book. I have a technical bug.

Right? I could easily written another bug, but I decided to write a fable. And the reason I decided to write a fable was because a technical bug doesn’t capture the really important things that we go through when we’re doing deals, psychology, drama, emotion, seller’s remorse, people getting cold feet, lenders pulling out at the last minute, all those things. So I’ve captured all of that drama, throughout the book.

It’s ninety thousand words.

It’s two hundred and something pages. So I’d love for you guys to to to read this. Right? Let’s, let’s move on with deal number two. It’s our good friend, the king of these presentations, mister Jason Borah.

Good morning, folks. We are Belmont Company, a limited liability corporation based in Wyoming. Thanks to David Gerrell. Thanks for that. And today, we are taking you to the big leagues with big leads, a targeted lead generation capability because you can’t spell deals without leads.

So the team for this, right now, you’re looking at it.

Myself, Jason Borer. I am the Calvary to this point.

It is kind of an issue. We’ll talk about that. We’ve got three owners that we’re looking to, transition out. We’ll talk about that more as we get through the presentation. But for now, the Calvary. Who am I?

Jason Boer. I’d like to think I look pretty good in the pea coat. I’m known for the vision strategy guy bring to an m and a team. I’m also known as the growth and scale component throughout my career. And at the center of that has really been in the background as a digital marketer. And with that, I’ve been able to work with some pretty cool clients and work with some pretty cool people as well.

So recently, we opened the aperture of the deal origination machine a little bit. We wanted to see what existed in the world beyond, you know, one to five, make sure we were capturing the top end of five, moving a bit towards six in that range.

Apparently, there was a typo in the system because what we got back had an additional decimal place and additional digit to it. And as you can see here, this deal is a bit larger. We’re averaging sixty one million across the last three years, looking at a transfer of value score at roughly seventy one point eight. We used the model for this. The seller psychology is sitting at a sixty five point seven, and that brings us to a market multiple of, about four dot two six.

Now the interesting thing, I hopped on a call with this gentleman, and he asked what my investment criteria were. I said, you know, we’re looking at about one to seven. And he said, well, you’re missing a decimal place. There there’s an extra digit there.

I told him I said, you’re likely out of my league. And, his retort to me was, well, that’s too bad. I I’d rather like you. So, I’d like to keep this conversation going.

So that’s what we did.

Who are we? So Big Leads is a customer acquisition platform. We enable brands to identify, educate, and acquire in market consumers via a scalable mix of targeted online marketing channels.

We have a hundred million, in perform as a performance marketing firm for in market household, finance customers. We have twenty five employees based here in California. We are a hundred percent self funded. We have no institutional investors behind us to this point, and we’ve delivered almost ten million consumers to partners in twenty twenty one alone.

We’ve been also profitable since our inception in two thousand two. Here’s a brief look at the performance across the, the past few years, split between revenue and adjusted EBITDA, and a few of the milestones that have got us there. Of course, twenty twenty one is gonna jump out at you. I’m actually gonna call right after this one, with this gentleman to discuss more about that, why it jumped.

Why It’ll be a COVID bump.

Yeah. It’d be twenty twenty one a little bit twenty twenty one will be a COVID bump for online customer acquisition.

Yeah. Yeah.

So, what I do wanna talk about, is additional ways from that near end learnings to apply it more towards the growth strategy in a bit more detail.

So if you want a continued overview, the core business, we specialize in generating targeted leads through our diverse Internet advertising channels. We’ve got email search, social media display, and native ads. Our customer base spans various industries, specifically mortgage, credit, insurance, and education as our four primary pillars, and, targeting businesses that require highly high quality leads to drive their sales efforts.

We use a multichannel approach for sales and marketing, and we leverage digital advertising, affiliate marketing, and content marketing strategies to attract and convert leads. One of our competitive advantages is, obviously, our extensive experience in lead generation. We also have some pretty advanced use of proprietary software, including marketing automation tools and a strong network of affiliate partners that ensure high quality traffic and reliable compliant lead delivery.

Where do we make our money? Right now, that’s a rough split across the four primary verticals. We’ll talk about some of the additional growth capabilities when we get to that slide.

But this is roughly the split between mortgage insurance, which jumped up, Carl to your point in twenty twenty one when we pivoted the, core business engine that way. And, of course, credit and education are are doing very well for us. And as far as the market analysis, you can see up in the top right, we sit pretty neatly with some of the more household names in this space. And the other interesting item is the roughly eighteen percent of the market that’s built of smaller other players. We’ll talk more about that when we get to the growth strategy and our intentional m and a.

So if you’re looking for a bit more of essentially how the sausage was made, here’s how the machine works across our media network and our demand network and the various channels that we use. We drive you to our platform for on form conversion and optimization, remarketing, retargeting, quality assurance, force distribution and compliance. Then we drive that down to our verticals. In mortgage, we’ve got over two million targeted mortgage inquiries since two thousand two. We’ve powered large banks and lenders and smaller mortgage brokerages.

Within credit, we’ve got a innovative credit score marketing platform that provides consumers, to top credit monitoring firms. Under the insurance umbrella, thousands of life, home, and auto insurance leads each day to the world’s leading company.

Within education, we’ve got high converting compliant education leads for some of the top schools, with our network of targeted EDU sites. And when it comes to our client list, I did my best to, redact, some of these names, but you can see we play with some of the more sizable household names in the space. A leading mortgage company, a prominent home loan provider, a top insurance comparison platform, a well known insurance quote service, and some pretty major players in marketing.

The market overview, it’s it’s looking pretty good, with a CAGR of seventeen point four six from now to twenty thirty.

We’re experiencing significant growth, and it’s driven by the importance of these digital marketing strategies and the adoption of more advanced technologies.

The global market for lead generation is currently valued at nine five four seven six million in two thousand three and is expected to expand, quite significantly to be a nine and a half billion market by twenty twenty eight. And this is fueled for a demand for personalized marketing, integration, AI. We’ve heard good things about that, and automation tools and the expanded use of social media.

Essentially, we’re competing more and more for increasingly limited attention spans. So what can we do? We can leverage a lot of these strategies to really get to you and connect.

So let’s talk about the growth strategy.

First up, health insurance. Doubling down on health insurance is a very clear path forward. We did very well with that, in in the past, and we know if we doubled down here using this sort of recipe and the machine that we’ve got in place, We can see an expected growth of fifteen percent across the next twelve months.

Auto insurance, this is front and center for us. There’s room to immediately double the revenue here across the next twelve months.

Of course, this is the fun part, growth and expansion. Verticals and services. Home services, another front and center sort of target for us, and we define that here within big leads currently as solar windows and bathtubs.

Of course, there’s room to evaluate where else this would play. But that offers an immediate adjacency adjacency for our core business engine. And then we’ve got markets like pet insurance, which offer a space where we can own the book and really automate it.

Of course, the net of why we’re all here. Right? Strategic and intentional m and a. So by strategically executing roll ups of those smaller players, that eighteen percent we were talking about, we can grow our market share and really step further towards some of the bigger players, the household names that you saw depicted on the market share chart.

Additionally, bolting on capabilities such as performance and ad tech personalization, that’s gonna yield significant gains for us in cross selling and cost synergies. Got an interesting conversation on the books with a personalization and ad tech capability, to mark, actually.

Financial projections.

If we were just to steady state this, step in, take a look at the, you know, capital growth rate and and watch it go, we’re doing alright. And, of course, if we put a little bit more of the rocket fuel, into this and assume a twenty percent growth, we’re we’re likely to be okay.

That said, I’m gonna take us over to the one sheet.

And this is my favorite part of the call because I get to turn the stage and the mic over to all you brilliant minds and, sort of answer a lot of the questions you’ve got and get a lot of that really good feedback. Can everybody see the one sheet?

Yep.

Yep. I got some questions for you on this, buddy.

Absolutely.

How’s do I?

So ordinarily, I’d be really excited by the numbers.

Mhmm. In this instance, I I’d like so I’m I’m in this business, but from a very different angle. I have a outsourcing service business providing offshore people to mortgage and insurance companies to do a lot of the back end heavy lifting in India rather than the the rather than in the US because it’s a lot cheaper.

Right.

So I know in those businesses in the last few years as interest rates have gone up, the level of revenue that we’re seeing come through, because they’re reducing everywhere, has come down significantly. And the reason for that is, certainly in the mortgage business, there’s not an there’s not as many completions on home loans, and that falls into two categories. There’s the new starts, and then there’s the refi. And the refi market places on its knees because everybody refi’d in when money was free.

Unless they have to move, they’re not gonna move because they can’t afford to move. So that has a knock on effect into the other sectors like insurance as well. And insurance, there’s been some change because there’s a lot of areas where the insurance companies for PNC insurance, for example, have redefined the maps because of fire risk, and some people can’t even get insurance now. So I mentioned this because I I I’d want for you to be confident of your revenues and profitability by line of business, taking those two big things into account and be and reassure yourself that you’ve got these bottomed out and you’re getting the accurate figures, which which can still be very profitable based on those exotic conditions that have impacted that industry kind of thing.

Does that make any sense? So you’ve probably done all that, but it doesn’t come through in Okay. It’s the next level of detail that you might get into on this. And so that’s that’s my two cents worth.

I hope it wasn’t inappropriate to say that.

Yeah. No. That’s great feedback. I agree that there’s more the double click down, something we’re looking to provide in an investor deck, which we should have done this coming week.

But I agree that those sort of considerations are top of mind, and they’re very, you know, text Yeah.

On this. Do so because I’m happy to help you.

Excellent.

Yeah. I’m I’m gonna go to Dan gonna go to Dan Giordano in a minute because this is his kind of wheelhouse, in terms of marketing agencies. Like, my my only comment at this point is, clearly, this is an absolutely world class business. Right?

The the multiples model as of right now only I’ve only modeled the multiples up to the two million dollar EBITDA level. Right? So I I don’t think this is anywhere near a four point three x multiple. I think this is closer to eight, maybe even ten as as a multiple.

I I think this business will cost you at least fifty million dollars, maybe more. Yeah. So you’re way outside of SBA. You’re gonna be into private equity.

So let’s say it’s a sixty million deal. You’re probably looking at fifteen million or so of equity that you’re gonna have to raise and then a big chunk of, senior debt from, from a mainstream bank. So, it’s definitely doable. This this is probably the the biggest of all big boy pants deals. It it’s a phenomenal business.

It’s growing like crazy. This is a major trend in the marketing space.

I know it’s Monday.

I I just think, you’re gonna be, I I I think a trade buyer is gonna come in and blow you out of the water, but, you know, I I absolutely think you should go forward very strong with this, but I think you’ve you’ve gotta start talking to large PE firms or family offices. You know, you’re you’re gonna need, I think, at least fifty million dollars of PE money, you know, into this deal. But but, man, like, if you can get it, it’s like you said the guy likes you. You’ve built great rapport with him. Obviously, your, your level score is pretty high.

His score is pretty low. You tend to find that, you know, in a giant antique business like this, he’s gonna have a world class c suite that’s running this business for him. And this is a really, really fun market to be in, so he’s probably not distressed at all. So great deal, but I think this is gonna be an expensive acquisition.

Let’s go to Dan Giordano. Dan, what a cool deal.

Yeah.

What do you think?

Definitely definitely a big boy pants deal. So great. First off, great job, Jason, you know, on presenting it and packaging it this way.

Quick question. You know? Well, I guess two questions. One is, do you, know is the model, paper lead models, or is it a combination, you know, of they’re just selling, you know, services as far as retainers for some of these companies?

It it’s more of a hybrid model, but I can definitely break that out in a bit more clarity as to to how we’re doing that in contrast to just a pay per lead.

Okay. Alright. And then what is the the reason behind them listening to sell? Is there is there any motivation, you know, specific that you’re aware of?

Yeah. So in our conversations, they talk about this pretty regularly. They’ve been around since two thousand two. And while they’re okay with staying on for another ten years to to cash out, I they speak regularly to the idea of what is next in their lives.

They’re fifty seven, fifty six, and fifty. So one out of those three owners is a little bit of the oddball out, but given the kind of work they’ve been putting into it since two thousand two, they’re open to entertaining the idea of an immediate exit. They are thinking about the next steps in life, grandchildren, family, things like travel that are more important to them. So it’s really we want to move on to the next step in life in contrast to the idea of we want to go start something new.

Is that helpful?

Yep. No. Definitely.

And, you know, totally agree with what Carl, you know, was suggesting because I’ve looked at, you know, the largest marketing company I’ve looked at so far was thirty million that we have an offer in on. And and, you know, the, the EBITDA on that was around four point five, I believe, from what I remember. Right? So yeah.

So I definitely believe that, you know, Carl’s spot on with with, valuation is probably significantly higher. But, you know, there’s ways to work around that like what Carl talked. So I I’d be glad to jump on a call with you, Jason, kinda work through some things with you. I have some ideas how to get it funded, you know, as well and maybe some connections for you.

But, you know, overall, you know, it looks like it’s a pretty solid deal as long as you can, you know, make the numbers work.

So Right.

Yeah. Appreciate it. Great. Thank you. Thank you, Dan. Lydia, what do you think?

Hello, everybody. And, great presentation shows Jason. Excuse me.

I’m personally excited about the deal. I think it’s, with your background, Jason, I think you can really make this work.

I think there is an opportunity possibly, if not to buy it outright, possibly come in partially and replace owners who are looking to exit, but I’m sure you already know that.

Other than that, I actually have access to a large digital marketing network here in Austin. And, if you need any more introductions in the space for more agencies, I I’m happy to, make some introductions.

Amazing. I’d really appreciate that. Thank you.

My pleasure.

Thank you, Lydia. Leonard Feinstein?

Yeah. Hi. Good morning, everybody.

How are you, Carl? Good seeing you a few weeks ago. Yes, sir.

Jason, yeah, great presentation.

I just wanna mention something on the private equity side.

Been talking to a lot of, capital providers in, PE lately, and there is an instrument out there called the unitranche where a lot of these big capital providers are raising funds to invest in people like you whereby they provide a debt instrument, which is typically mezzanine.

So it’s gonna be a little bit of a higher interest rate, but this business is just bleeding cash flow. But they’ll also tap into their equity fund as well. And then they’ll also give you a deal fee. So if you combine all of that, you can, in some instances, you know, not have to raise anywhere near the full fifteen million, let’s say, but maybe under a million.

They’ll make you roll over your deal fee typically into the deal, but a lot of these, PE groups now are moving into these unitranche kind of things where there’s a combination of debt, and then they also get equity in the business. Now that’s the upside. The downside is they’ll take most of the business. Right?

So they’ll you know, if you’re gonna put up twenty percent of whatever the equity might be or even ten percent, after your rollover, they’ll take, you know, eighty or ninety percent of the deal, but they’ll give you a carried interest, depending upon how much you x their money.

So, you know, they’ll they’ll give you ten percent carried interest, right off the bat, at least, you know, if you if you if you provide reasonable results for them. And the carried interest just means that after everybody gets paid back, you get the first ten percent of the profit.

If you really blow it out of the water, they’ll give you twenty or thirty percent. That’s all negotiable.

But there are, there and I’m happy to talk to you about this offline, but there are instruments out there where you don’t have to come up with as much personal equity as maybe you would have had to a few years ago in.

Mhmm.

Excellent. That’s really helpful.

I appreciate it. That’s awesome. So, hey, Jason. You’ve got some killer feedback there and some killer, like, offers of help, right, from Dan, from Mark, from Lydia, from Lenny.

Like, this is the real power of this call when, like, when you put monster deals up like this, there’s people in this community who have got some chops to kinda help you. So Yeah. So so, yeah, you know, when when you play full out with such world class presentations like this, everybody wants to help you. So, so great job.

Let let’s carry on with the questions, and then we’ll get to Leslie’s deal deal three. We’re we’re kind of bang on track time wise, which is good. Let’s go to, Ayaz Hamid.

Jason, great presentation. I was curious. I think just furthering Mark’s point a little bit, where you mentioned that there’s different sectors who are affected by macro, macroeconomic conditions. Right?

Insurance, mortgage. You mentioned these guys have four or five verticals they have. And the reason that I think they’re verticalized by business lines is because it requires different domain expertise to do different verticals. So for example, b to b versus b to c lead generation is very different, I presume.

Right? Within health care, if you’re selling devices into doctor’s offices versus if your health plan was trying to enroll, patients into their, you know, weight loss program, those are all lead generation examples, and they’re very different sort of use cases. One thing I’d be curious about is, do you know on their team, do they have domain experts for each vertical that can speak the language of the customer? Because that would sort of tell you how easy it is for you to roll out new new verticals in terms of business lines.

Right? My assumption is that you cannot roll out new verticals unless you have in house domain expertise. That’s one thing I would look at in this business in terms of growth strategy.

Yeah. That’s a great point, and that is something the business has leveraged to this point. They they know it is the buy a guy sort of approach. So when they’re entering a new vertical because they have seen areas where you would think it would just, like, point it somewhere else and it’ll work.

It doesn’t. Right? There’s that contextual information that is very different, very important. So we do have that sort of by a guy, approach that you see, to this point on the team.

It’s a it’s a great consideration. I I I too am looking to find out a bit more of how that’s scalable and how they’ve approached it to this point.

And I’ll tell you why I mentioned that because in in advising various technology startups or sort of companies across different sectors, your competition is if you’re going to some smaller company, like, sometimes you have some, like, individual smaller firms or even individuals who are very, very good at, like, very niche verticals.

So for example, I was evaluating company that was doing basically member engagement for health plans. Right? And then and it all these lead generation companies that end up going with one guy who’s really good at basically finding people on Facebook doing just member engagement for weight loss part programs. Right?

And he would they’re paying him a fortune to do that. So it’s almost like, you know, your competition varies in this. It’s a very nuanced kind of a thing, but, that’s one thing I would sort of pick there, Brent, on. But great presentation.

Yeah. Great point. Thank you.

Jason, I got I have a bio for this if you want it.

Sounds good.

Yeah. Let’s talk up offline.

Yeah.

Nice. Alright. Perfect. Any other questions, guys, from the room? Anybody else got any thoughts, any ideas, any clarifying questions for Jason?

Speak now or forever hold you, please?

No?

Alright. Cool.

So, Jason, again, world class pitch. Phenomenal deal.