Posted on Monday March 6, 2023
Aizik Zimerman completed his acquisition of J. Blanton Plumbing in his freshman year at Booth.
For many students pursuing Entrepreneurship through Acquisition (ETA), the primary goal is a quick exit.
But Aizik Zimerman, who enrolled in Chicago Booth knowing he wanted to find a small business to buy and operate, is in it for the long haul.
The sophomore MBA acquired a Chicago-based plumbing company last year after a lightning-fast search and became the first student in Booth’s ETA program to complete an acquisition while enrolled in school. Rather than turn it around, he intends to grow the company into the country’s largest home services company and build training programs to build a pipeline of workers.
“I hate the ‘exit’ philosophy, I think it’s so backward,” Zimerman said. “The people who really make an impact in the world don’t just do it for five to six years.”
Zimerman, the first in his family to graduate from high school and attend college, credits his family’s background for shaping his ambitions.
His father, a Holocaust survivor, was just out of high school when he immigrated to the United States, where he worked as a bricklayer and got a job in a restaurant.
Sam Zimerman was able to buy into the restaurant cheaply, and as he slowly built wealth, he bought other businesses and eventually became the owner and operator of large Cleveland nursing homes.
“He did ETA before it had a label on it,” Zimerman said. “It changed the history of our family.”
Zimerman’s parents both died while he was in high school, leaving him an inheritance that he wanted to use wisely to start his own business.
After attending college at Miami University in Ohio, where he majored in finance and accounting, Zimerman worked in investment banking and private equity to learn how to structure deals. To gain operational experience, he led a sales team for a venture-backed company and worked as a general manager at Uber Eats.
Ready to begin his entrepreneurial journey, Zimerman enrolled at Booth to have the time and space to figure out exactly what type of company he wanted to buy. He chose the school for its deep connections to the local business community.
“I saw Booth as a 50-year investment as an entrepreneur in Chicago,” said Zimerman, who took Booth’s ETA course and the Polsky Center’s PE/VC Lab and is also a Kilts Marketing Fellow.
Zimerman focused his search on plumbing and HVAC companies in the Midwest that are among the “least sexy companies of all time” but offer great opportunities. The market for these essential services is huge — $2 billion in the Chicago area alone, Zimerman said — and geographically fragmented, limiting competition. In addition, many owners retire with no succession plan, and few young entrepreneurs start new businesses in this space.
“There are 100,000 plumbing companies in the US, and 80% will go bankrupt because the owners retire or they’re too small to sell,” Zimerman said. “Who will serve America? Who will be the next owners of sanitation businesses that support our daily lives?”
Zimerman spent his first few months at Booth observing plumbing and HVAC business owners to build relationships and learn everything he could about the industry. He hired someone in the Philippines to create a database of potential acquisition targets for him, bought a handwriting machine to compose prospect letters, and then filled the list with Garrett’s popcorn letters and gifts.
Its focused criteria ensured a highly efficient search. Within three months of beginning his search, he had signed a letter of intent to purchase one of Chicago’s largest pure-play plumbing businesses, and three months later, in October 2022, he completed the deal to purchase J. Blanton Plumbing, a three-generation family business with 40 employees, retired by its owner.
Although private equity firms are hot on plumbing and HVAC companies, and owners report being inundated with lucrative offers, Zimerman said his personal history and long-term vision made him an attractive buyer for those interested in the are concerned about preserving the legacy of their family business.
He funded the search himself and raised outside capital to fund the Blanton acquisition, finding investors largely through the Booth network. That excess investment now lives in his holding company, Monarch Services Group, through which he plans to expand his footprint by acquiring other household services businesses, including HVAC, electrical and landscaping, and expanding organically into new markets.
“I’m going to build a $500 million company in 30 years,” Zimerman said.
First things first, Zimerman continues to juggle a full-time course load at Booth while serving as CEO of J. Blanton Plumbing, which is already benefiting from his leadership. He set up a new organizational structure, changed inventory and pricing management, restructured the call center so it never misses a call again, and started a “No Drip” members’ club that offers bi-weekly home inspections.
The company’s biggest challenge is labor, which is expensive and scarce. Resolving that will be especially important as he plans national expansion. Zimerman plans to invest in training the next generation of plumbers by fighting bureaucracy that impedes entry into the industry and attracting young people to the profession.
“I think plumbers are like superheroes and heart surgeons: people don’t call us for fun, we step into their lives during an emergency,” Zimerman said. “We must glorify the craft and our technicians.”
Article by Alexia Elejalde-Ruiz, Associate Director of Media Relations and External Communications at the Polsky Center. A veteran journalist, Alexia was most recently a business reporter for the Chicago Tribune. Reach out to Alexia via E-mail or on Twitter @alexiaer.
polsky.uchicago.edu
https://polsky.uchicago.edu/2023/03/06/forget-the-exit-this-booth-eta-student-plans-to-hold-onto-his-newly-acquired-plumbing-company-for-the-long-haul/
