Sellers' Panel Overview

February's webinar featured our biggest sellers panel ever, so I was a bit more excited about this month's web event than usual. We had four live participants who took part in a round table discussion on the process of selling a company. Each seller had conducted a deal within the last eight months, one at the new year, and one as recently as weeks before the webinar!

 

Mike Taylor sold Instantiations, a software tool development company, to Google in August of 2010. He shared how quickly the Google deal took place, which was even more surprising because Instantiations had been circled by a different potential buyer for more than a year. He noted that having more than one buyer seemed to be key, as it not only motivated Google to move quickly, but the original interested company accelerated their pace as well. His other big takeaway was to be persistent and not give up, as his company was in the water for 14 years before the right deal came along.

 

David Geller's company, WhatCounts, is an email service provider that was acquired by the Mansell Group, with backing from a PE firm. WhatCounts provides email solutions to some of the world's top news agencies, like MSNBC and Fox News. This deal concluded in December of 2010. David shared that he was surprised that there weren't more late night negotiation sessions, and that the whole process was not much like it has been portrayed in popular entertainment. He also said that there were several points where the deal could have fallen apart, but because he and his company were prepared for difficulty, they were able to slog through to resolution and closing.

 

Laurent Othach is the CEO and founder of 360 Solutions, a real-time workforce optimization utility that utilizes real-time data and sophisticated algorithms to insure rapid workforce response to fluid situations. His company was acquired by IFS, a Swedish-based ERP provider, as of October 1, 2010. This was his third M&A transaction, and he said he was pleased with the amount of response he drew this time for his company's availability. In particular, he felt that attracting numerous interested parties is vital for getting the best deal, not just in terms of money, but in terms of finding a good fit. He also noted that in preparation for a deal, knowing your market is key, and that you should disclose everything you can think of to avoid surprises.

 

Rui Domingos works in private equity, and he was a shareholder in Altitude, a Portuguese software company that makes specialized applications for oil tankers. The majority of Altitude's stocks were taken over by two European financial firms in January of this year. His process only took seven months, with two-and-a-half of it dedicated strictly to the SPA. He disclosed that he thought the deal almost died a number of times, particularly due to the specificity of agreements. He noted that a company must prepare itself to sell, through all levels, because keeping a sale secret is next to impossible. He also suggested that being upfront with any difficulties is the easiest way to defuse potentially hazardous situations.

 

As you can see, there was some very in-depth analysis of the victories and pitfalls involved in a successful M&A transaction. If you want more information, you can read the webinar transcript or listen to the entire M&A webinar. Be sure to register for our next web event in March, where we'll have another panel discussion, this time with members of international private equity funds.

Posted by , Chairman Emeritus on 23 February 2011
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