We had a chance to talk with Jacob Swain, CEO of BBB Tank Services, about his business and the family legacy in the tank business.
Below is a hasty transcript, please excuse any typos.
Matt Register: Guys, welcome back to the show, Texas Business Radio. We’re going to continue to bring you very interesting stories with companies and what it is they do. Multi-generational family business is something that we like to talk about fairly often here.
It’s the backbone of the economy. It’s something that as an entrepreneur, you build a company, you want to ensure that you can pass it on. You want to make sure that it lives on and that transition to another generation of leadership is always a challenge. Especially if it is within a family. Right? This is a very interesting one in that there is some private equity thrown in there for good measure. Right? So, a little bit different twist on it. I’m really interested in learning a little bit more. I’m your host Matt Register here is always with Jay Curry. Jay what’s going on?
Jay Curry: I’ve got to agree with you, Matt, because I have not seen… I mean it’s so hard to do a transfer from one generation to the next. It sounds simple but it really is difficult. And to throw in some private equity… This is going to be an interesting story and we’re going to learn some things about the combination of the two and how it worked and it worked well.
Matt Register: Yeah no doubt, get your calls in at 844-814-8144 is our 24 hour call in line. Call in now, call in later, doesn’t really matter to us. Go to the Web site get a question in that way. Texas business radio dot com. Let’s jump into it. Jacob Swain is the CEO and President of BBB Tank Services out of Baytown. Jacob, welcome to the show, sir.
Jacob Swain: Thanks for having me.
Matt Register: So tell me about BBB Tank Services, what do you do? Who do you do it to?
Jacob Swain: All right. Well BBB is a provider of above ground storage tanks services here in Texas and Louisiana. Primarily, we build and repair above ground storage tanks for terminals and refineries. A lot of big players that you’re familiar with, like, you know, Magellan, Martin, Shell, Motiva, companies like that. So, we’ll go in and we will build tanks for them. We will do any maintenance services that need to be done on those tanks and whether that’s welding or we can go in and we can coat the tanks. And we have our own coatings division. We also have a line of products for tanks and we provide floating roof seals; both primary and secondary seals for these tanks.
Matt Register: Well these are not little tanks. Tell me about some of the sizes, because these are the big massive tanks you see on the side of the road all the way down there. Anywhere your refineries are. What kind of sizes you get into?
Jacob Swain: Sure. Well we do… Some sometimes we will do smaller tanks that are 10-20 foot diameter but, you know, there are some tanks out there that are, 300 feet in diameter. Which is basically the size of a football field. These are massive tanks and they’re big projects and, you know, we’ve got some great personnel that work for us that have been in the business for decades and they do a great job going into these refineries and terminals and doing work on them. Whether these are small tanks or large tanks.
Matt Register: Well, we were talking during the break about kind of your competitive advantage. A lot of your competitors are very, very large companies that do a whole lot of services. Now talk to me a little bit about what you guys bring to the table. Because you’re not a massive multinational company that, you know, has processes that take weeks to be able to get to a problem. You guys jump on pretty quick.
Jacob Swain: Right. So you know it’s often the case that one of our clients may call us today and they have an issue that they need dealt with right away. And we can have crews out there in their facility within 24 hours to go out and help them. We have a technical expert, somebody that’s got some real experience in the business. They can go in and work with them, can provide advice on how to solve issues and go out and execute on it right away. So that’s a big difference when you’re dealing with us versus one of the big players. That you’re dealing with one of these, you know, billion dollar corporations. They don’t turn on a dime. They’re not nimble. They’re not responsive. They may not even answer the phone when you call them. You know, we take the relationships we have with our customers very seriously. We’re very concerned about their needs and attentive and we make sure that when they call and they need help, that we’re going to be there and we’re going to move quickly.
Matt Register: No doubt. Agility is something, you aught to be able to run laps around those guys, agility wise.
Jacob Swain: Sure, absolutely. And that’s how we really built the businesses to be nimble and to be responsive. That’s a core part of our company and I think that really differentiates us from some of the bigger players out there.
Jay Curry: You’re also not doing this just around the Houston port or anything. You’re in multiple states, you’re all over Texas, up and down the coast. That’s right. What do you do service in?
Jacob Swain: That’s right. So, the business, it’s headquartered out of Baytown. But we have offices in Corpus Christi, Baytown, Sulfur, as well as in Missouri. So, we historically have done most of our work in Texas and Louisiana but we’re currently expanding out into some new territories. We’ve got a Midwest office that we opened and we’re doing a great job up there. We’ve also done a fair amount of work out west in places like New Mexico and Nevada, but, you know, we do work primarily here in the Houston and Louisiana markets because there’s just, you know, tremendous, so much activity right now.
Matt Register: Well tell us a little bit about the background of… you were a second generation in the business. Quickly tell us the history of the company. Because I think it’s interesting your dad founded it with three other men. Right. And walk us through that a little bit and then we’ll get to your transition with private equity here in a second.
Jacob Swain: Sure. Well, you know the the business was founded by my father and three other guys, like you said. And, you know, they worked for those big corporations, we were just talking about. And they got tired of working for organizations that really didn’t do very good work, didn’t care about the customers. And they saw an opportunity to go out and really deal with those issues and differentiate themselves. So, they started BBB and they went out and you know they had some great relationships in the industry because people knew and trusted them. They knew that if they worked with the founders of BBB that they were going to get some good quality work. And so, they started BBB and it took off and, you know, over the course of, you know, 10 or 15 years, you know, they started a new construction division, build new tanks, started our own line of seal systems for tanks. And it just kept going from there and we started opening up new offices, expanded out, adding new customers and it’s been a great success story.
Matt Register: God bless America! “I can do it better” is the backbone of this country, right? And then to leave and actually do it. Now, when did you become president of the company? Prior to the transition or during the transition?
Jacob Swain: It happened concurrently with the transition. So, we brought in, you know, some investors in April 2016. It was Main Street Capital down here in Houston, as well as Turning Basin Capital, which is out of Richmond, Virginia. And we brought them in because, you know, we wanted to take the business to the next level. We wanted to expand out into some new territories, add some additional service lines to become a larger player in the tank market. And in addition to that, you know, the the founders of the business. This was part of their exit strategy and they wanted to have a way to exit the business but still be able to be involved and help grow it. And this was a great fit for us.
Matt Register: Oh, absolutely and in Main Street Capital we’re very familiar with it as an investment banker. We’ve dealt with Main Street Capital a number of times, like we talked about during the break.
Jacob Swain: Right.
Matt Register: And private equity very often is going to be that exit plan for those founders. Right?
Jacob Swain: Right.
Matt Register: I find it fascinating that you ended up taking the reins because very often the second generation is not the guy you would hire off the street to do that job.
Jacob Swain: Right.
Matt Register: Well I assure you, if you’re not that guy off the street, private equity will not put you in that position. Right?
Jacob Swain: Sure.
Matt Register: How has that worked out as a second generation CEO with the private equity partner? How is your relationship like with the founders? Right.
Jacob Swain: Well, you know it’s worked out well. I think it was a natural fit for us, for me to take the reins. You know, after the investors came on board. And that’s because I was managing the finances for the business before the deal was done. I was the company CFO. So, I had intimate knowledge of the business operations. I grew up around tank business because my father. I had a lot of knowledge of the industry and it was just a good fit for us. And so we’ve worked well with the private equity folks and they have been they very helpful. So, we’re kind of married. And at this point, you know, we’ve got similar goals. We want to grow the business. And, you know, they’re there to advise us, to give us some guidance and to provide us with the resources that we need to grow the business. So the relationship with them has been phenomenal. I couldn’t say enough great things about Main Street and Turning Basin. And sure, you know, the founders of the business today, you know, they’ve really enjoyed it as well. It’s gone much better than we had originally thought. We thought that there would be some some speed bumps and really it’s been a great relationship.
Jay Curry: One thing I find fascinating is that the son… it takes two different skills right. You have the skill it takes to start a company but there’s still the skill that it takes to grow the company. Right. Are two different things and yet you have to do it within the same family and bring in private equity and it works. So what’s the difference between the skills that you’re having the bring, versus what your dad had to bring.
Jacob Swain: Right. Well I think you know founders of businesses, they have to have a certain mentality to be successful. You have to have that founders mentality where your able to go out and do whatever it takes to get the business up off the ground. And then it takes a different attitude, I believe to grow a business.
Jay Curry: One is almost brute force. And then the other one you got to start thinking more intellectually and getting more process oriented. You know, to take it to the next level, right.
Jacob Swain: Absolutely. And so you know that’s been our focus is growing the business through process and taking it to that next level.
Jay Curry: Congratulations.
Matt Register: All right, well good. Jacob Swain CEO of BBB Tank Services, BBBTankServices.com is the Web site. Jacob, thanks for joining us.
Jacob Swain: Thanks for having me.
Matt Register: Hey guys. Go to the Web site, TexasBusinessRadio.com, we’re going to have links to BBB Tank Services and all of our other guests right here on the Web site. Get your questions in. We get to go to break. We’re going to be back, right after this. Don’t go anywhere.
Sponsored in part by:
In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.