From screen printing to seven acquisitions—what does it take to build a powerhouse in the decorated apparel industry? And what surprising lessons can scaling a “niche of niches” teach about entrepreneurship, technology, and M&A success?
In this episode, Jeff Cooperman, Founder of Front Nine Capital, reveals his journey from CPA to serial acquirer—exploring how he’s turned overlooked, mom-and-pop apparel companies into a thriving, tech-forward organization ready to supercharge growth in a fragmented market.
You’ll discover…
- The surprising question Jeff asks every business owner before making an offer
- How a single “epiphany moment” can redefine a company’s trajectory overnight
- The secret upside to acquiring legacy businesses with minimal tech presence
- Why mergers and acquisitions in small markets are seeing unprecedented momentum
- The game-changing insurance tool that’s making deals safer for small business sellers than ever before
Mentioned in this episode:
Transcript
Patrick Stroth: Hello there. I’m Patrick Stroth, trusted authority in executive and transactional liability and national practice leader for mergers and acquisitions for Liberty Company Insurance Brokers, where we provide peace of mind with great care. Welcome to M&A Masters, where I speak with the leading experts in mergers and acquisitions, and we’re all about one thing here. That’s a clean exit for owners, founders, and their investors.
Today, I’m joined by Jeff Cooperman, founder of Front Nine Capital. Front Nine Capital was created in 2015 to purchase and operate businesses in the screen print, embroidery, and promotional product industry. Jeff, it is great to have you. Welcome to the show.
Jeff Cooperman: Thanks, Patrick, I appreciate you having me on here.
Patrick: Jeff, before we get into Front Nine Capital, let’s start with you. How did you get to this point in your career?
Jeff: Yeah, it hasn’t been a straight line, Patrick, I can tell you that for sure. But thanks again for having me. It’s exciting to be here, and I’ll talk about my journey in my little, you know, corner in the business universe. So, you know, I went to college, and like every other 18-year-old, I had no idea what I wanted to do. So with that, I just decided to study accounting and finance.
I figured, you know, if I don’t know what I’m doing, I should probably at least, you know, understand those things. It will help with my career and and that’s what I did. So I graduated with both of those degrees, and I went to go work in New York City for a national audit and tax company.
And I just kind of went at it, and I got my CPA, and I spent eight years in public accounting, and I was really focused on manufacturing, distribution companies, media companies, and some not-for-profit companies. And Patrick, I always had that entrepreneurial itch, and I knew that accounting probably wasn’t the long-term play for me, but it was a wonderful experience. I worked with really awesome people. Got to see a lot of different businesses operate.
Got to see some things work. Got to see some things that didn’t work. And, you know, just really enjoyed my time. So after eight years, I said, you know what I’m going to I’m going to see what’s out there for me, what’s next. So yeah, with the support of my family, I decided to leave in 2015 and took a few months off, and I figured out where I was going to go.
Patrick: You’ve founded Front Nine Capital, which I’m sure is good for you, you got a very popular name in there, but you didn’t name it Cooperman Capital. So how’d you come up with that name? And then let’s talk about how you found what I call the nicheiest of niches here.
Jeff: Yeah. Well, as the name suggests, I do enjoy the golf. I wouldn’t necessarily call myself a golfer, but I try to be. The front nine has, there’s so much optimism and potential when you tee off on the front nine and I did that to exude in the business is the potential that we can have, what we can do, you know, in the mission that we’re trying to do, and, you know, helping companies either exit or merge or, you know, whatever it is that they’re looking to do.
And, you know, I thought, Front Nine Capital, hell, let’s, let’s go ahead. Let’s start it. I didn’t know what industry I was going to end up in. I just said, hey, I like the name, and I like the idea and the ring to it, and let’s go ahead and do it. So that was in about the middle of 2015, and I started looking around. I knew I had that backbone in some of those industries I just spoke about.
Manufacturing, distribution was kind of my strongest place of expertise in my audit and consultation days. So I kind of figured, let’s start looking there. And what I found was a, I stumbled into the screen print and embroidery industry. I was living in New York City at the time, and there was a company in Rockland County, New York, which is about 20 miles north of New York City, that was in this industry.
They were called Mainly Monograms. You know, they were for sale at the time, the owner was looking to exit and leave the industry. And I didn’t know really much about it, but I decided to dig in, because at the time, I figured, hey, it’s, you know, it’s decorated apparel. I’m trying to figure out what Amazon and Apple, and Google aren’t going to put out of business in the next five years. So I thought, well, maybe this one might stick around for a little bit.
So let me try and investigate it a little bit. So I did. So I kind of went in there, and, you know, I started doing my due diligence. And you know, what I found in the industry was it’s an extremely fragmented industry, a lot of small players, not saying there aren’t big players. Of course, there are, but there’s a lot of small mom-and-pop type of companies out there that operate within this industry, not the most technological, fast-forward place to be.
So I thought, okay, you know, there might be an opportunity here to get in, maybe do a couple of acquisitions, maybe put some together, and see where I go. You know what I learned again in my audit and consultation days, is a lot of the successful companies that I was involved with had this sort of acquisition-minded strategy.
So seeing that early was something that kind of set the table for me in terms of not just getting into a business and trying to just operate it. But how do I really grow it. Not just organically or all the things that you need to be doing, but you know, what can I really do to supercharge it and give myself a chance?
So in October of 2015 I actually ended up buying two companies at the same time. Mainly Monograms. The one Rockland County was one of them, and then the other one was Star Embroidery out of Newark, New Jersey, and that was the start of it. I put those together into a new factory in March of 2016, and that was the formation of the company and the plan.
Patrick: It’s great when you come in, because there are a lot of these smaller firms that get overlooked because there are so small and yet they’re viable, and they’ve got some potential there. But when they’re founded the way they’re founded, the founders don’t know the next way to iterate larger.
And I guess that’s some of the things you do. What do you bring to the table other than for those that want to exit, well, here’s your off-ramp I’m taking going forward. What are some of the things that Front Nine Capital is doing now for prospective companies in this space?
Jeff: Yeah, actually, that’s a great question. You know, we’ve purchased seven companies to date, from October 2015, through today. And there’s no really one answer. You know, we worked really hard over the past 10 years to build a foundation that we feel that we can continue to add on to these acquisitions and really still perform at a high level. You know, as far as we what we bring to the individual businesses?
Well, you know, I really first try and understand what it is they need, right? What are they doing well, and where are their areas for improvement? Where are the areas for growth? Where are there areas where our ecosystem can really produce a positive impact quickly for them? And that’s where we try and focus on.
So you know, in any one of these acquisitions, it’s not really about taking it and molding it into what we have. It’s really about working with what they’re good at and then expanding on that and trying to give them the resources and trying to give them what we have in terms of how we operate our business, to try and help them, help them grow and, you know, continue on.
You know, specifically, we’ve launched websites for all of our acquisitions. We streamlined back office functions, marketing, customer service, accounting, and artwork. We’ve integrated all acquisitions and all divisions into a cohesive ERP that we run with, and it’s one company that does all our reporting and all our forecasting, and everything that you need an ERP and CRM to do.
We have a state-of-the-art factory. All of our production occurs in one place, that same place that I opened up in 2015. And we know that the factory is going to deliver. They’re going to deliver for high-quality products, they’re going to deliver on time to customer expectations, and they’re going to deliver at a fair price.
So just having that in our wheelhouse, and as a just a standard operating procedure of how we have, how we do things, will automatically just give that little bump to the acquisition or the prospect right off the bat. So, yeah, I mean, it’s just, it’s everything we’ve been building for the past 10 years, and again, it’s understanding what the company does well and trying to grow on top of that.
Patrick: I think you’re creating a formula from your experience on the things to add on. And not everybody needs all those things, but you’ve got that portfolio of capabilities you bring on. Share with me, I know we didn’t talk about this before, but share with me an epiphany moment, because I can imagine an owner, these founders are there. They’ve been running their companies for several years, and you come in and you’ve already agreed to combine forces and do the deal and move forward.
But you come in with an idea of, well, why don’t, we get where’s your website? What do you mean a website? Everybody’s got a website or something basic. Is there some kind of situation where you introduced a concept that you took for granted that we have to have this, and it never hit them? And they were just, you just see the light bulb go off, and they look and they say, you can do that?
Jeff: Yeah, I mean, it’s another great question. And I feel like there’s one in every acquisition, right? No business is the same. It could be as simple as, oh, you don’t have a website, you don’t have a Google presence. You know, that’s the kind of the easy stuff, right? I mean, that stuff we can do fairly quickly.
You know, the business I bought in 2019 the Wild West Shirt company. I mean, that was definitely a turning point in our history. What they do, very simply, is they sell into the gift industry, right? So, if you go on vacation with your family, and you go into a gift shop and you buy a shirt or a hat, those stores, is who that company sells to. You know, one of the epiphany moments we had with them was, you know, just being able to find more customers quicker, right?
So, for example, you know, they started their selling season in November. Well, why did you start your selling season in November? Well, that’s just what they always did, and they’ve been operating for 50 years. Look, what happens if we start in September? What happens if we do a couple of different things?
Patrick: There are 11 more months in the year, guys.
Jeff: Yeah, yeah. So just kind of breaking the mold as to, you know, it doesn’t always have to be the way it always was, but just having the ability to have these great conversations with the people who are part of the business, and understanding what it is that they do. And kind of like I said before, well, you know, what resources can we bring to the table that’ll help you do what you do better? And with all these acquisitions, we always find something. Whether it’s a selling season change, whether it’s a new website, whether it’s just a shift in production environment.
Like I said, all production is occurring in our New York State factory. So you know, we’ve implemented a ton of technology back there to get products out quicker, efficiently, at a better price for our customers. So all of these things kind of combined are the epiphany. There really isn’t one magic moment. But, yeah, we just try and find the opportunity in every business. And, you know, let the business be what it is, but help it and grow it.
Patrick: Give us a profile of the ideal target you’re looking for, because I can imagine you’ve got owners and founders that want to exit as what happened in your first deal, or others that they’ve been grinding away. They want to get to the next level. They just don’t know how to get there. And you always, the skill set to get to a million dollars in sales is different when you want to go from one to 10 million. And so give us that profile and what you’re looking for. And do owners usually stay on or they go on to the next level?
Jeff: Yeah, so, you know, we worked in a lot of different ways, and really, you know, we first want to understand what it is that the owner wants and what’s their goals, right? So in the first couple of deals that we’ve had, the owner was more retirement-minded, and they wanted a transition and an exit, and that was fine.
So, you know, we sit down, we work with them, we try and chart out exactly how the deal is going to go, not just pre-deal, but post-deal, what their expectations are, and we work with them to achieve them. The most reasonable and fair outcome that we can both agree on for both the owners and the sellers, both the owners and the buyers.
The sellers and the buyers, I should say. Now we’ve had a couple of acquisitions where the owners wanted to stay in the business. They had the passion, they wanted to be a part of the company. They just didn’t have the, you know, quote, unquote passion to be a business owner, which I can understand. So in two of those acquisitions, the owners sold the business came into our company as employees, and are still with us today.
So it’s just a matter of what it is they’re looking to do, and we can adapt and mold to what it is they want, assuming everyone’s reasonable and fair and, you know, trying to move forward all on the same page. So there’s really no one type. Now, you know, in terms of companies, the promotional product, decorated apparel spaces is wide. We kind of are specializing in the apparel side, so the T-shirts, the headwear.
Patrick: Stay away from tchotchkes and stuff like that.
Jeff: Well, yeah, I mean, we do sell those. We do sell and that’s kind of the promotional product side of it. But I’ve looked at companies that, you know, specialized in decorated drinkware, for example. So what I really look for is a customer base that I can leverage into with my existing customer base, because a lot of our customers are buying all these things together.
They just perhaps are buying them from different companies. So if I see an opportunity where we can bring in an adjacent product, for example, like a decorated drinkware item, and offer it as a part of our service to our existing customer base, then I then I would take that opportunity very seriously, and, you know, see if it was a good fit for us.
Patrick: Any limitations in terms of geography or size of the company?
Jeff: No real limitations. I mean, we’ve, we’ve done most of the acquisitions in the northeast, just because that’s where we are.
Patrick: So your base.
Jeff: The one in Bozeman, Montana, for example, has worked out really great for us. It all kind of depends on the business profile. Some businesses it’s a little prohibitive to move. Some businesses can without real interruption, so that’s something that we kind of flesh out in due diligence. And if we think that the business could be relocated, that’s something that we look at.
And if the business can’t be relocated, we still might look at it. We always thought that we could have second operations in a different geography, and if there was a business profile that made sense for that opportunity, then that’s something we pursue. So we’re pretty open-minded.
Patrick: The trend of mergers and acquisitions happening is increasing, particularly for smaller, fragmented industry groups. A lot of times, the perception of I’m selling the business was, well, it was a sign of failure. You couldn’t make it the whole way. You couldn’t send this company off to your children or your legacy. There’s nothing wrong with it, just the children may not want the business anymore, and so it’s got to go somewhere.
So there have been more mergers and acquisitions happening. And one of the things that has really facilitated that has been the creation of rep and warranty insurance, where the seller can go ahead and transfer any of that financial liability from the transaction away, where the buyer and the seller face financial risk, they could transfer to the third party, and they move on.
It’s accelerated middle market deals at an alarming rate, where there are, you know, 1000s of deals happening a quarter. But I’m curious with you, Jeff, good, bad, or indifferent, what has been your experience, or Front Nine’s experience, with rep and warranty insurance?
Jeff: Yeah, no, it’s a great question. You know, honestly, we haven’t had to use any sort of rep and warranty insurance on any of the deals that we’ve had to do, and knock on wood and hasn’t bitten us. So I can’t say I have much experience in using that, but certainly it’s something that we’re going to keep in mind to consider, especially as we move forward with the with the strategy of acquisitions.
Patrick: Yeah, I think as even, even these smaller transactions, they may be simple, but they’re not completely, you know, one-dimensional, and there are risks. And you know, instead of $100 million deal looking at a risk of $10 million, you could have a $3 million deal, and that could be a $300,000, $400,000 risk. And so, you know, the margin for error on smaller deals is not there.
The nice thing is that in the rep and warranty market, there is a new program called transactional liability private enterprise. It is a reverse engineering of the rep and warranty product, and it is designed exclusively for deals that are priced between a million and $50 million in purchase price.
So it is now come down rep and warranty has been the domicile for 100 million dollar to multi-billion dollar deals. It has a great track record, paid claims, and facilitated successful closings. But that capability couldn’t scale down to smaller deals, particularly in terms of price. That is not the case now, because at a starting price of about $15,000 per million dollars in limit, it makes sense. So what’s great is now as we see more owners and founders who had started their entrepreneurial ventures decades ago, and now they’re looking for an exit.
This is something where organizations like Front Nine Capital have a home for these, and it is a very good home, or places to go to the next level. Now you’ve got a tool there that will help facilitate the deal closing by eliminating the risk, which is, I mean, if it’s good enough for $100 million deal it’s good for a million-dollar deal.
Jeff: Absolutely. It’s certainly something to consider. I can totally see how that’s a major benefit.
Patrick: What trends, Jeff, do you see going forward for M&A? We’re midway through it in 2025. We’ve got less uncertainty today than we did at the beginning of the year. But what do you see going forward either macro or for Front Nine Capital?
Jeff: Yeah, I mean, I think in the macro side, in terms of our industry, you know, because that industry ownership base is starting to age out a little bit, I think you’re going to see more and more of companies in our space looking for some sort of exit strategy, whether that’s a pass down, whether that’s a sale, I think you’ll see just a little bit more action out there with it.
And you know, we’re certainly ready to take that on and see if there’s any good fits for us. We actually do have one target that we’re looking to do now. We have a tentative close date in August, but you know, nothing’s ever done until the anchor is dry. So I won’t tell that much here, but we’re optimistic that, you know, we have a shot with that. In terms of the industry.
Listen, our industry is no different than a lot of others. It’s moving towards consolidation. Technology is playing a big part of it. Customers want their goods quicker, with less friction. So the investment in technology, the investment in customer service, just being able to produce a little quicker at a fair price for our customers is going to be really important.
And, you know, the ability to consolidate and leverage, you know, a lot of the things that occur with these acquisitions is going to be a critical thing, you know, for us as we move forward, and, you know, for a lot of the players in the industry. So I see this as a beginning point and kind of continuing to move forward.
Patrick: Well and consolidating the manufacturing process too, particularly because it’s onshore here, based in New York. How is that working out as a competitive advantage for you?
Jeff: So, you know, New York’s a great place to be. We have access to a lot of you know, great people in the state who, you know, come to work for us every day. So there are certainly a lot of opportunities there. You know, the geography is great. You know, we have a ton of business very local to our factory that require promotional products, and we’re 20 miles north of New York City, so there’s no, there’s no shortage of companies there that need goods. It’s a great place to be. It really is, you know, the access that we have is really beneficial to us operating a factory.
Patrick: I want to appreciate you coming today. A lot of people, when they think about mergers and acquisitions, they think about, you know, Whole Foods getting bought by Amazon and all these billion-dollar deals, they could be as local as these things down the street, particularly for owners and founders who are defaulting to big institutions or competitors, to think about an exit.
There are organizations like Front Nine Capital out there that have your interests at heart, and together, you guys can move in a direction that a lot of people didn’t think they can go. So it’s wonderful having you as a resource out here, Jeff. And I want to thank you again. Jeff Cooperman from Front Nine Capital. Thanks for being a guest today. Thanks,
Jeff: Thanks, Patrick. Really appreciate you having me on today.
