SEO Agency Acquisition: Insights from Julia and Grant Hensel

The Search Process

Julia and Grant Hensel acquired Lexigate, an SEO agency focused on personal injury lawyers, in July 2024. Their search process took about 9 months and involved looking at deals on platforms like Website Closers, Quiet Light, and Flippa.

Some key aspects of their search approach:

• Focused on remote businesses with recurring revenue
• Wanted a business with a strong existing team
• Looked for deals that weren't SBA-eligible to reduce competition
• Differentiated themselves by emphasizing their operational experience
• Flew to Romania to meet the team in person during due diligence

Grant notes that searchers should aim to win deals based on non-monetary factors rather than just offering the highest price. Their ability to close without SBA financing and desire to actively operate the business helped them stand out.

Deal Structure and Financing

The Hensels acquired Lexigate for $2 million at a 2x multiple of earnings. Key aspects of the deal structure:

• Asset purchase rather than stock deal
• Included some seller financing
• No SBA loan used - financed through cash and seller note
• Got new contracts signed with clients pre-close
• Included contingencies around revenue retention

They were able to avoid using an SBA loan, which was a priority for them to reduce personal risk. The 2x multiple was relatively low for the industry, likely due to concerns about AI disrupting SEO at the time.

Operating the Business

Julia transitioned from her role at BCG to run Lexigate full-time. Some key aspects of operations:

• About 60-70% of the team is based in Romania
• Implemented EOS (Entrepreneurial Operating System) for management
• Julia travels to Romania quarterly for leadership meetings
• Focus on retaining and growing personal injury law clients
• Measuring results based on new signed cases for clients

Julia has found her consulting background helpful for quickly understanding the business, though there was still a steep learning curve on SEO specifics.

Managing a Global Remote Team

Operating a global remote team has presented some interesting cultural learnings:

• Different communication norms around context and explicitness
• Varying levels of hierarchy in different cultures
• Importance of adapting leadership style for different team members

Julia tries to adapt to local norms where possible while being aware of cultural differences.

Business Outlook and Growth

After 9 months of ownership, the Hensels are focused on growing the business through:

• Expanding further in the personal injury law niche
• Potentially moving into other local service business verticals
• Improving sales and marketing processes
• Continuing to refine operations and team management

They see continued opportunity in SEO for high-value services like personal injury law, where acquiring even one new client can justify the investment.

Working Together as a Couple

The Hensels have found success in dividing responsibilities, with Julia taking point on Lexigate operations while Grant focuses on his other business. They consult each other frequently but maintain clear ownership of different areas.

Their complementary skills have been beneficial - Julia brings strong operational and strategic focus, while Grant contributes agency management experience and entrepreneurial insights.

Advice for Searchers

Some key takeaways for other searchers:

• Look for ways to differentiate beyond just price
• Be willing to travel and meet teams/sellers in person
• Understand the quality of recurring revenue, not just whether it exists
• Consider cultural factors when acquiring a global team
• Have a clear division of responsibilities if searching as a couple

Grant now invests in other self-funded searchers through a small fund called Entrepreneurial Capital, aiming to provide both capital and hands-on support.

Conclusion

The Hensels' story demonstrates how a thoughtful search process, clear division of responsibilities, and willingness to get hands-on with operations can lead to a successful acquisition. Their experience highlights the opportunities in digital service businesses, while also showcasing the complexities of managing a global remote team.

Article created from: https://www.youtube.com/watch?v=RFDJW3soyBw