Independent Sponsor Success Stories

Thomas Murphy: $2,000 for every $1 Invested

Thomas Murphy started his career managing a tiny, failing UHF television station in Albany NY. Over time Murphy bought TV stations across the country and diversified into newspapers and cable TV.

The company became known as Capital Cities Communications Inc. In 1985 the company acquired American Broadcasting Cos for $3.5 billion. Berkshire Hathaway helped finance the deal by investing $517.5 million to acquire an 18% stake in the combined entity.

The business was sold in 1995 to Walt Disney Co for $19 billion. “Those who bought stock in Capital Cities in 1957, Mr. Murphy calculated, would have reaped $2,000 in 1995 for every $1 originally invested.”

independent sponsor private equity roll up
Source: James R. Hagerty | "Thomas S. Murphy Built TV Empire With Help From a Pal, Warren Buffett - WSJ" | The Wall Street Journal | 05/27/2022 | Visit

Acquisition of EggCartons.com

Here’s how a Harvard MBA student purchased a company with “less than $50 million in revenue” without investing or spending any of her own money. (VIDEO)

Sarah Moore used the university’s library as an office and hired 50 unpaid interns through craigslist to search through 400,000 private companies over the course of 18 months.

She actually had to have fake student IDs made so that her interns could get into the library.

When she found businesses she liked, she got very clever. One example: She would send company’s a FAX with a picture of herself wearing a sweatshirt that read “I want to buy your business.” She sent thousands of faxes and sometimes gets recognized in public because she sent so many.

Eventually she found EggCartons.com, which met her criteria for a stable and simple business.

Here’s how she bought it: She contacted 100 banks before she found one that would provide an uncollateralized loan for 75% of the purchase price. And the seller provided seller financing for the other 25%. She even got the accountant that audited the business to roll their fee. So she didn’t have to invest any of her own capital.

To fund her search she would even enroll herself in research studies, and she temporarily went legally blind in one after testing a new deodorant.

I couldn’t get specifics on financials, but per the podcast where I heard this story, the company has less than $50 million of revenue.

I love this story because it demonstrates what’s possible in PE. You have to network like crazy, but the reality is that whatever two people negotiate is possible.

entrepreneurship through acquisition independent sponsor private equity
Source: Shaan Puri and Sam Parr | "How This Harvard MBA Bought A $50 Million Dollar Business For $0 - YouTube" | My First Million | 07/27/2022 | Visit

Acquisition Ace: Dick Heckmann

Dick Heckmann made his first fortune rolling up small companies “doing almost anything related to water: treating wastewater, making filters and valves, delivering water to homes” under the name U.S. Filter Corp. The effort started with the acquisition of a “crappy little company” called American Toxxic for $1.6 million in 1990. Nine years later, he sold U.S. Filter to Vivendi SA for $6.2 billion, earning himself $200 million on the sale.

After that he focused on sporting equipment: “Mr. Heckmann was off to the races again with K2 Inc., a maker of skis and other sporting equipment, where he became chief executive in 2002. He bought dozens of companies, including Rawlings, a maker of baseball gear, and moved production of skis and metal bats to China. In 2007, Mr. Heckmann sold K2 to Jarden Corp. for about $700 million.”

The most amazing part of this story is the origin story. Heckmann was a college dropout who sold cleaning products as a door to door salesman in the 1960s. He considered himself a true “salesman at heart.” He moved on to selling life insurance before attempting his first acquisition: a tiny maker of rescue beacons for airplanes. The acquisition proved to be a disaster and the company went bankrupt in short order. He considered it a learning experience and went on to acquire Tower Scientific, a medical equipment manufacturer. He sold the company in 1977 and made $3 million the sale. He was 34 at the time.

independent sponsor private equity roll up
Source: James R. Hagerty | "Super Salesman Dick Heckmann Turned Water Into Big Money - WSJ" | The Wall Street Journal | 11/05/2020 | Visit