Acquiring $10m of EBITDA as Industry Operators

Edoardo Maggini is the Operating Partner at Star Step, a specialty coatings rollup. Founded in 2021 by 3 partners, Star Step pivoted away from chasing a $45m EBITDA carveout to aggregating smaller, founder-led businesses, resulting in rapid growth across USA and Europe.

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Star Step is the buyer-of-choice in a fragmented niche market because they are the only group that actually speaks the language of a PhD chemist. Their portfolio now boasts 5 completed acquisitions producing $10m in aggregate EBITDA, with a 6th deal currently in the pipe. By focusing on ultra-niche verticals like pallet coatings, where one portco has 70% global market share, Edoardo sees tailored deal flow that generalist PE firms are oblivious to.

Scale in the coatings world is won or lost at the procurement desk. Edoardo centralizes purchasing in Texas to minimize raw material costs, the largest expense item. There is furthermore supply chain synergies between their US and European operations, where Star Step through its recently acquired Italian manufacturer could cross-sell its American-made products to its global distribution network (e.g., South America and Africa) overnight.

HR is another differentiator for Star Step. One of the 3 founding partners is an HR specialist from industrial giant PPG. Instead of relying on Indeed and LinkedIn for hiring, they have access to high-end industry recruiters, which helps will roles in BD and R&D. This people-first approach also builds immediate trust with sellers who are happy to see their legacy protected by actual operators.

After initially raising capital on a deal-by-deal basis from family and friends, Star Step is shifting gears to institutionals in order to move faster. Edoardo recently hired a Wall Street placement agent, paying a $20-50k monthly retainer plus a 2-5% success fee. This strategic move offloads the "fundraising headache," allowing the partners to spend their time on pure operations and integration. By professionalizing their capital stack, they are clearing the path to their ultimate goal of $100m in EBITDA (!).