Bob Ogdon has raised millions of dollars to grow companies like Swiftpage, the private equity-backed software company whose logo overlooks 17th and California streets downtown.
Now Ogdon finds himself on the buy side of the private equity market. Ogdon and his two sons, Dan and Mike, last month launched a family-run private equity firm, Ogdon Ventures.
The group on Aug. 21 purchased Westland Distributing, which sells manufactured home components, for an undisclosed sum.
“It was actually a perfect fit for our model,” Ogdon said. “We buy profitable small businesses that could be dramatically improved by technology.”
Ogdon Ventures raised funds from 30 equity investors and received a loan from FirstBank to finance the purchase. Mike Grande with SDR Ventures represented Westland Distributing.
Westland sells prefabricated parts for mobile homes that big box stores like Home Depot typically don’t carry.
Ogdon said Westland’s customers are primarily mobile-home parks that it services via hubs in Denver; Tempe, Arizona; and West Sacramento, California. But that leaves much of the market – prefab houses outside of parks or outside those regions – untapped.
That’s where the Ogdons hope to use their experience at Swiftpage, where Dan was chief marketing officer and Mike was vice president of business development. The firm also hired Lou Braun as president of Westland.
Ogdon Ventures plans to replace Westland’s PDF catalogs with digital marketing campaigns and an e-commerce website. Bob Ogdon also thinks better technology would allow it to sell products in new geographic areas.
Ogdon said he decided to launch a private equity firm after building cash flow from scratch at startups. Speaking to older business owners, he saw a “generational gap” – mature businesses that are making money, but could use technical upgrades and the moxie of a startup founder to continue growing.
“The model is to take technology to non-technology companies,” said Ogdon, who remains chairman at Swiftpage.
Ogdon Ventures aims to acquire distribution and wholesale, manufacturing and service-based businesses with at least 10 years in operation. It plans to buy companies with EBITDA between $500,000 and $2 million – and to double those earnings.
Most private equity firms aren’t interested in acquiring businesses of that size, Ogdon said. And the people that own such businesses – typically a founder preparing for retirement – have no prior experience with private equity.
But he hopes to turn those potential barriers to the firm’s advantage. He said temporarily operating businesses it acquires allows Ogdon Ventures to win the favor of founders that haven’t fielded buyout offers in the past.
“Because we’re willing to operate the business, we’re not a financial partner only,” Ogdon said. “They want their business to be successful even after they leave.”