18 months ago, we closed our largest acquisition: Eastern Standard, a full-service branding and digital marketing agency based out of the Northeast. It was a deal we spent months on, and the first acquisition where we structured the entire purchase without using cash from the balance sheet.
Here’s the Year 1 scorecard.
The Numbers
We acquired Eastern Standard at a value of $2.4M, structured as cash (funded by co-investors), a seller note, and preferred shares.
The business made $630K in operating profit in the year before we bought it. In its first full year under Onfolio ownership, it did $798K. That’s net income with amortization added back, representing the real cash earnings of the business.
At a 3.0x entry multiple, Year 1 produced a 33% earnings yield.
It distributed $355K up to the holdco and retained $560K in cash on its balance sheet. After accounting for debt service on the seller note and preferred shares, the net cash flowing to Onfolio was positive.
The current value sits at roughly $3.2M, assuming the multiple stays the same. Including both distributions and appreciation, the total return after twelve months puts the MOIC (Multiple on Invested Capital) at 1.71x.
To put that in plain terms: $2.4M in, $1.7M in value created, in one year.
What the Metrics Tell You
For those who like the full breakdown:
Entry multiple: 3.0x operating profit
Earnings yield: 33.3%
Distribution yield: 14.8%
MOIC: 1.71x
Value created in Year 1: $1.7M (71.5% of purchase price)
Why Entry Price Matters More Than Almost Anything
I keep coming back to this point because it’s the single most important variable in any acquisition.
At 3x operating profit, your money comes back in about three years. Everything after that is return. The business doesn’t need to grow dramatically. It doesn’t need to hit aggressive targets. It just needs to keep performing roughly at the level it was when you bought it.
At 5-6x, which is what most buyers are paying for businesses like these, the payback period nearly doubles. The margin for error shrinks and you need meaningful growth just to make the numbers work.
This is why we’re disciplined about acquisition multiples. The blended average across all our deals is 3-4x. That discipline is what makes the compounding model work.
What’s Next for Eastern Standard
Revenue grew approximately 10% year-over-year in its first full year. It began distributing to the parent company in the second half of 2025. For the first few months we had to stay patient while it built up cash supplies. That’s fine. We acquired it for the cashflow.
We’re now consolidating our five agency businesses into a unified platform with Eastern Standard as the anchor. The five agencies are Eastern Standard, RevenueZen, SEO Butler, Pace Generative, and DDS Rank. The consolidation means centralized sales and marketing, shared fulfillment capacity, and clearer accountability across the group.
The goal is straightforward: make each agency more durable and more profitable than it would be operating independently. A client working with one agency can access the capabilities of all five. A salesperson can offer branding, SEO, content, and GEO under one relationship.
Year 1 was about proving the business performs under new ownership. Year 2 is about building the platform and improving margins.
The Bigger Picture
Eastern Standard is the clearest proof point we have that the holding company model works when you buy at the right price and operate with discipline.
Acquire a profitable business at a sensible multiple. Don’t overpay. Let the team run it. Collect cash. Use that cash to cover holding company costs and fund the next acquisition. Repeat.
That’s the entire model. Eastern Standard is what it looks like in practice.
More deal teardowns are coming as our other portfolio companies hit their own milestones. I’ll share the same level of detail on each one.
If this was useful to you, it would probably be useful to someone you know. Feel free to share it or forward it to a friend. One of the hardest things about being a small public company is simply being discovered, and word of mouth goes further than anything else.
Disclaimer: This discusses Onfolio’s financial performance using data from publicly filed SEC reports. It is not financial advice and should not be taken as a solicitation to buy or sell any security. For complete financial information, refer to our SEC filings at sec.gov.