Presenting your company to potential acquirers is unlike any other kind of presentation. You’ve pitched products, investors and partners, but when the product itself is your company, it requires a new approach for what could be the most important presentation of your life. Corum’s global team of dealmakers walked through nine practical tips for giving management presentations during the tech M&A process. What should you present? How should you present it? Who should be involved? We covered key insights based on decades of experience to help you prepare. Plus, deals, trends and valuation metrics from across the technology industry.

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Introduction
 
Bruce Milne
 
Good day to you, wherever you are in the world. Welcome to Tech M&A monthly for August 2017, featuring nine practical tips for presenting to acquirers. I'm Bruce Milne, CEO of the Corum Group, your host for today's webinar.
 
We have a jam-packed agenda, so we'll get right to it, starting with a special report on our Langara fishing celebration, and an interesting interview on how fishing is like M&A. Then we'll go to our August research report. Then we'll hear the nine practical tips for M&A presentations, tips from the professionals, followed by a minute or two for Q&A.
 
Langara Fishing Celebration
 
Let's get right to our report on the Langara fishing trip and hear from Jim Perkins.
 
Jim Perkins
 
At Corum, our thirty-year tradition is to host our annual fishing trip to the Gulf of Alaska for Corum clients who have sold their company in the previous year. We just returned from our adventure two weeks ago. My previous trip to Langara fishing lodge was 20 years ago as a Corum client. This trip, now as a senior advisor, I hosted my clients from around the world. The transformation of the experience was amazing. In 1997, there were no guides assigned to us in the small 9.9 horsepower tin-can boats. It was kind of hit and miss, but we still caught fish and the whale watching was incredible.
 
This year, with 200 HP fishing cruisers with deep sea electronics, we enjoyed an even more outstanding experience, and the majestic whales were still there: humpbacks and orcas greeting us as they did 20 years ago. It was magic.
 
For the first-time fisherman from Europe and North America, it was—and I quote many—the fishing trip of a lifetime.
 
Bruce Milne
 
I agree, Jim, the fishing was amazing. Our big fish award goes to the Gurock brothers from Berlin. They wanted to learn how to be guides, how to brine and bait, handle the gear, change for different types of fish, repairs, and everything involved, including how to deal with the sharks and seals we sometimes have to compete with and they were very successful. Hats off to Dennis and Tobias.
 
How is fishing like M&A?
 
The question we presented to a number of our guests on the trip was, “How is fishing like M&A?”
 
First we'll hear from Scott Faros, who sold his company to Ticketmaster.
 
Scott Barrows
 
I’m Scott Barrows, CEO of ZeroHero, and Corum Group helped me in my recent sale to Ticketmaster. I would say that you could go out there for 18 hours and never get a bite, but you have to keep getting out there, no matter how cold and rough it is, because someone will like what you're putting out there, so it will be worth the time and effort.
 
Bruce Milne
 
Indeed. Persistence. You cannot give up. Often times in the merger industry, people take their company out, don't get a quick response, and move on to the next client. We find that in this business you have to keep at it, keep penetrating the companies that you are looking to get interest from. Be persistent.
 
Next is Moe Arnaz, who sold to Asentinel.
 
Moe Arnaiz
 
I’m Moe Arnaiz, founder of a company called eMOBUS, and we sold to Asentinel at the end of 2015. You won't catch anything if you don't put your line in the water, and you want to have as many lines in the water as possible, and I think that's where Corum helped us — getting as many lines in the water as possible.
 
Bruce Milne
 
Good advice. Whether it is the A list or the B list, strategic investors, financial investors, or international investors, you need to be talking to all of them to create an auction environment.
 
And speaking of international, our next speaker is Mike Schmalz, who sold to a Chinese buyer.
 
Mike Schmalz
 
My name’s Mike Schmalz, I’m the president of Digital Extremes. We’re a London, Ontario-based gaming developer. We sold our company to Le You Technologies, a Hong Kong-listed technology company. It was a challenge. I think there is luck involved. You have to be working with good people who know what to do and where to take you and how to show you the ropes when you don't know exactly what to do and... hope for good weather.
 
Bruce Milne
 
Hope for good weather. Thanks, Mike. Now to Rex Hale.
 
Rex Hale
 
I’m Rex Hale, and the company I sold was Hospicesoft. We sold it to Optima Healthcare Solutions, out of Palm City, Florida. Good fishing here has been an experience, most often, when there was a good guide in the waters, they knew how to fish, where to fish, how to bait the hook in a way that got the right fish. That's very similar, I think, to M&A, where you take an M&A advisor who’s sailed these waters before, and has fished these waters before. They know the market, know the buyers, know what they’re asking for and what they’re looking for. So in a tense situation where you might want to dig your heals in, the consultant can tell you ‘Oh, this is what they’re looking for. This is what the buyer wants to know. If we can just explain this, we’ll mitigate this situation and clear it up.’ That's been very helpful. Steve Jones from Corum Group helped me, and did a fantastic job in those situations to help us have a successful sale.
 
Bruce Milne
 
Thanks, Rex.
 
Same time next year, we'll be going again in mid-July and just like in this picture I'll be wearing my lucky red shirt. Some of you who are listening may be joining us there. I hope so.
 
Corum Research Report: Valuations continue to surge
 
Now let's move on to the Corum research report, with Elon Gasper and Yasmin Khodamoradi.
 
Elon Gasper
 
Thanks, Bruce. We begin with the public markets, which surged in July to historic highs again, buoyed by the wave of upbeat earnings from Alphabet, Amazon, Apple and the proverbial Animal Spirits; momentum carried into this month, climbing almost steadily till Korean tensions escalated. European markets went up as well as much of Asia on good news there from heavy industry and tech, too.
 
With this long bull market and the need of big companies to keep up with disruptive tech trends, we continue to urge software executives to take advantage of these great conditions for exit. The tech M&A weather has never been better for sellers. Part of that is shown in the Corum Index, where the down arrows in our market year-over-year indicators of volume and size are mainly reflecting a scarcity of companies for sale; at the same time, nimble Private Equity players have added to the demand side by taking their game to a new level, competing successfully against strategics at earlier stages of the deal pipeline, pushing all buyers to reach across borders and delve even deeper into the ranks of older companies—often held by other PEs themselves—as they explore synergies to try to assemble businesses of high performance and critical mass.
 
New tech megadeals stacked 4 of our 6 market sectors higher, though still no megadeals in Consumer this year. The new megadeals included: among Verticals, health information vendor WebMD joined the network of vertical websites and services owned by KKR-backed Internet Brands for $2.8B, at just under 4x revenue and about 16x EBITDA; Britain’s Civica, which serves public sector agencies with digital transformation products and services, was nabbed by PE firm Partners Group for $1.43B; with other megadeals to be covered in the following sections, let’s look at sectors now, starting with Horizontal. Yasmin?
 
Horizontal Software Valuation Metrics
 
Yasmin Khodamoradi
 
Horizontal multiples stayed relatively steady last month and deal flow continued for many subsectors, including the HCM space, which is undergoing a new wave of consolidation as mobile-friendly, data-driven solutions rise in demand, with PE funds leading the charge.
 
Inverness Graham, for example, bought employee timekeeping & payroll SaaS SwipeClock, its first acquisition in the space. And Riverside-backed Alchemy Systems boosted its learning management portfolio, buying Montana-based employee training and collaboration SaaS Wisetail LMS.
 
In the ERP subsector, Sage purchased accounting SaaS provider Intacct for $850M at nearly 10x revenue, helping them gain traction in the North American market and add larger companies to their SMB base.
 
The BI subsector saw continued interest in artificial intelligence, as Hubspot made its first acquisition in 2 years, buying AI-enabled customer data analysis SaaS Kemvi to enhance its CRM offerings.
 
In the Adtech space, advertising optimization SaaS provider Rocket Fuel was taken private by Vector Capital-owned Sizmek for $125M. And The Rubicon Project bought real time bidding automation outfit nToggle for $38.5M to help advertisers manage inventory better.
 
Waterfall, a mobile marketing automation SaaS was acquired for nearly $26M at 3x revenue by Upland Software to enhance its mobile messaging platform. Similarly, Boomtrain, a machine-learning startup that sends personalized notifications to customers was acquired by NY based marketing automation platform Zeta Global.
 
In the supply chain subsector, UK-based procurement SaaS developer PROACTIS spent over $130M to merge with SCM SaaS provider, Perfect Commerce to grow their geographic footprint. And Atlanta-based Aptos snapped up retail merchandise lifecycle SaaS TXT Retail, for $99M to help retailers boost omnichannel growth.
 
And in megadeals, payment-tech saw a flurry of activity as payment processing giant Vantiv acquired its London-based rival Worldpay for over $10B, gaining significant market share in Europe. And in Sweden, payments processing specialist Bambora was purchased by French payment tech provider Ingenico Group for $1.7B to gain scale in online transactions.
 
Internet Software Valuation Metrics
 
Elon Gasper
 
Internet market multiples rose significantly more in terms of EBITDA - plus 10% - than sales, as this sector continues to serve as a share versus profits value battleground.
 
In a megadeal, the financial advice online content producer Bankrate was taken private, again, by digital marketing company Red Ventures for a billion and a quarter at 3x revenue. 
 
Another online content publisher, for the energy industry, Alerian, a Texas-based outfit with strong cash flow and profitability, was acquired by Hong Kong’s ZZ Capital for over half a billion plus almost a quarter billion more in potential earnout.
 
Dominos are still falling in the Travel and Leisure subsector with ticketing services providers’ consolidation in particular continuing after our Q2 sale of ZeroHero to TicketMaster, that Scott mentioned in the fishing segment, and Eventbrite’s purchase of Ticketfly; the new ones included the  purchase of ExtremeTix, a Houston-based resale website, by Etix for a reported $16M; New York-based ticketer TheaterMania, snapped up by Canada’s Rubicon-backed AudienceView, apparently to combine platforms for scale and other synergy; finally in India, Wasteland Entertainment, the ticketing arm of events company OML Entertainment, joining Alibaba’s subsidiary One97 Communications under its PayTM brand.
 
More news from top buyer Amazon, announcing its acquisition of Graphiq, an online search startup, apparently aiming to upgrade Alexa and leverage Amazon’s lead in voice assistance to flank Google’s core business.
And finally, we note the swirl in the food ordering field seems to be reaching a later stage, with buyers sorting out their positions as Yelp nets $288M for selling Eat24 to GrubHub in its third purchase this year.
 
Infrastructure Software Valuation Metrics
 
Yasmin Khodamoradi
 
Infrastructure multiples held steady last month while security sector deal flow dominated.
 
Symantec continued to strengthen their Enterprise Security division, buying Israeli anti-malware and threat isolation security software firm Fireglass and Skycure, a California-based mobile threat defense startup with AI and machine learning capabilities, reportedly paying around $200M for each one.
Brighterion, which provides AI and machine learning solutions for fraud detection & prevention was acquired by Mastercard. And in the Seattle area, G2 Web Services, a merchant risk intelligence SaaS company, was bought for $112M by Verisk Analytics. Komand, a security automation & orchestration SaaS specialist, was bought by Rapid7, the latest company to jump in the automation bandwagon. Lastly, endpoint security SaaS provider Observable Networks, was acquired by Cisco to boost its growing security business.
 
Elon Gasper
 
And just one more before we wrap it up: we note Disney’s announcement the day before yesterday of its purchase of controlling interest in streaming video software innovator BAMtech. Founded by Major League Baseball, BAM will now enable Disney and its ESPN sports broadcasting subsidiary to launch and grow their own Netflix-style direct-to-consumer internet video ecosystems, jilting the actual Netflix; the plan is no more Disney movies there, Bruce.
 
Bruce Milne
 
My five and six year old grandsons may have something to say about that. Should be an interesting war.
Thank you Elon and Yasmin for that great report.
 
If you have any questions, we'll have a minute or two for those at the end.
 
Special Report: 9 Practical Tips for Presenting to Acquirers
 
Now to our special report on nine practical tips on presenting to acquirers to get optimal value. We'll hear from the experts, starting with Peter Prince in London.
 
Peter Prince
 
When preparing for a management presentation, it is essential to give a clear and concise story that will project your company well, with its greatest assets to the fore. Not only that, but you must lure your audience in with impactful opening statements which compels the listener to want more. It’s your aim to get the salient point out quickly so to immediately provide a framework for your audience to understand the essence of your company. Very often what you say in the first 5-6 minutes of your presentation will determine how the rest of the information is received. You must get to the point as soon as you can which will allow your listeners to “get it” quickly and therefore want to hear the rest of the story.
 
When making a company presentation it can be described as the “art of the impassable.” In other words, the listeners do not want to learn something brand new, but want to validate what they believe to be intrinsic value in your company. Therefore use the tried and tested method: tell them what you are going to tell them, tell them, and then tell them what you’ve told them.
 
Bruce Milne
 
Thank you, Peter. As many of you know from our annual reports and going to the World Financial Symposiums and other events, we have an advisory board that reads like a who's who from Google, Microsoft, SAP, etc. Henry Hu of IBM probably said it best in a recent webcast. “Get to the point right away.” When you see 300-500 opportunities every month, you need to get to the heart of what you're selling right away.
 
Now to Berlin and Julius Telaranta.
 
Juluis Telaranta
 
When scheduling your first management presentations, start with less-likely, so-called “B list” buyers, as well as “rabbits.” Those are the buyers who respond quickly to every deal but usually at low valuations. The B-list buyers are those who will need more time to understand your business anyway, so starting early and giving them that time makes sense.
 
But starting with them also gives you practice. You may have a lot of experience selling your product, but now you’ll be pitching your company instead. You will learn a lot about the nuances and expectations during these first few presentations. Better to hone your message before getting to the most likely buyers.
 
At the same time, don’t underestimate B-list buyers. We get 40% initial interest from them and sell 25% of companies to them. They are important in the process.
 
Bruce Milne
 
Thank you, Julius. Let's go on to the next presenter, here at HQ, Jeff Riley.
 
Jeff Riley
 
My tip is to limit participation to critical team members. You need to make sure that you have all the key players, but only the key players, presenting. You also need to make sure that they are all properly prepared and aligned. This means that everyone needs to understand the key messages and be committed to the plan. You don’t want anyone departing from the script, as buyers will quickly pick up on any clues that suggest the team is not on the same page. Also, the team’s cohesion and professionalism provides insights into the likely future performance of the business. Finally, this is a chance for buyers to get to know the leaders who will take the business forward. So it’s important that everyone gets a chance to shine.
 
Bruce Milne
 
Thanks, Jeff. Here's Steve Jones in Utah.
 
Steve Jones
 
Generally, you’ve got about 1 hour for your 1st presentation for your buyer. So you should speak for only half of that time, and leave the remainder for Q&A. Let the buyer guide the discussion. That means you’ve got time for about 20 slides, and that’s it. So it’s crucial that you don’t go off message. There’s no need to go into a history lesson, or talk about why you rented a building with five corners. Cut to the chase with the compelling value of your offering. You should highlight the market opportunity, review the traction and momentum of the business, and as Peter said, stick to the critical data. Now certainly if there’s something relevant in your history that showcases your uniqueness, by all means you should include it — but only as an emphasis on your value. You only get a short window to capture the attention and imagination of a prospective buyer. So set the hook in that meeting; you’ll have all the time in the world in you need to talk about your journey later on.
 
Bruce Milne
 
Thanks, Steve. One of the biggest mistakes we see is people doing a history lesson when presenting, and they quickly lose their buyers.
 
One of the toughest things to do is present a good, effective Executive Summary. Let's hear from Rob Griggs in the Midwest.
 
Rob Griggs
 
You and your adviser should craft a concise, clear executive summary document that crystalizes the unique opportunity your company presents to buyers. This document should follow the best practices we have discussed, so mapping your presentation in alignment to the Executive Summary will save significant time in communicating that value. 
 
It is critically important to have consistency of your positioning message in all buyer communications, too; the executive summary, the presentation, and all follow-up correspondence must be as tightly aligned as possible.  Knowing your value, communicating it regularly, consistently and supportively through all forms of interaction to the buyer is a testament to your professionalism and capabilities.
                                                                                                                                                
Taking the appropriate time to create your executive summary, your presentations and all communications is a valuable investment of your time. Be precise and concise—buyers will appreciate your clarity and thoughtfulness.
 
Bruce Milne
 
Thanks, Rob. Now back to Jim Perkins, one of the most successful dealmakers in the world. Jim?
 
Jim Perkins
 
Excitement for what is possible after the deal is done is highly infectious.  Building success scenarios for competing buyers will improve the deal value and firmly set out what the buyer and seller have planned following deal completion.  What new markets become accessible following the deal? For example, opening up the Asian market as a result of landing a great Chinese buyer will definitely add value.  What new products are possible with the help of the right strategic or financial buyer?  Clearly describing the competitive advantage to competing buyers will drive extra deal value. How will one buyer change the market versus another, and take a commanding lead in the space? Painting all these scenarios with competing buyers will improve deal value and structure for the seller. Finally, we see sellers helping their buyer make better future acquisitions with the sellers’ involvement!
 
Bruce Milne
 
Thanks, Jim. It is important to create an auction process to get the optimum outcome by bringing all the parties on.
 
Now to New York and Dr. Ivan Rusic.
 
Ivan Ruzic
 
One reason to keep your presentation short is to leave plenty of time for questions. Buyers will try to trip you up so be ready.
 
You will almost always be asked general questions about the proposed transaction. For example: Why are you seeking an acquisition or partner?  What does your ideal partner look like? Why do you think we’re that partner? Who are the key personnel and what are their intentions after the deal? What are you personally looking for?
 
You will also face specific questions about your strategy and vision, your products and technology, your sales and marketing efforts, your customer base, your competitors, your organization and your people.
 
Your adviser will have a library of the most likely questions so remember to role-play early on with your adviser as the buyer. There is no such thing as being too prepared.
 
Bruce Milne
 
Indeed, no such thing. I would add valuation to that list as one of the first questions you're likely to get. Your comments initially should be to the effect of you expect to be paid in line with the other transactions happening at the moment. “We are currently doing our projections and looking at research comparables and as soon as we have our work done in that, we'll get back to you.” You need to find that off a little bit until you set the hook.
 
Now back to HQ and Rob Schram
 
Rob Schram
 
Buyer presentations are a two-way street.  Not only do you get the chance to convey your company’s unique strengths and value, but perhaps more importantly, you have an opportunity to gain insight on what’s most important to the buyers – what they perceive as the greatest value, and why. 
 
So listen carefully and don’t be afraid to depart from the script to dig deeper and tease out nuances that could have a profound impact on the discussion.  If the buyer isn’t interacting, then engage them with relevant questions.  A conversation allows for a freer interchange – it can be more productive, and more enjoyable.  A side benefit to this approach is that you’ll be able to extract tremendous insight on your industry from top strategic and PE players.
 
If the buyer expresses interest on multiple fronts, that’s great, but it’s best to concentrate on the top priority where your company is a fit.  Trying to cover everything may defocus the conversation.  And always bring the discussion back to the company’s value, not your product strengths.
 
Bruce Milne
 
Yes, Rob, it's so important to listen. You can gain so much from these dialogues: about the marketplace, how they perceive you, the competition, and you can sell for more if you engage in active listening.
 
Now let's wrap up with Allan Wilson, who is cruising in France.
 
Allan Wilson
 
The process of selling your company begins when the buyer reads the executive summary describing your company and its value to them. The selling process ends when the definitive agreement is signed and money changes hands. When you talk with a prospective buyer for the first time, everything you say from that point on should be to reinforce the value that your company brings and how great it will be for everyone after the transaction is complete. A buyer is acquiring your company to fill a gap in their portfolio; they are buying your business to experience an increase in the value of their business. Never stop selling and reinforcing in their minds the thought of how great it will be. Continue to reinforce in them the great decision that they have made and how happy you are that they bought you.
 
Throughout the entire process never be complacent and never make assumptions. Be on the lookout for the slightest glimmer of fear, uncertainty, and doubt in the buyer and slam that door shut by reinforcing all the positive reasons why this will be a spectacular success. I am reminded about the sales pitch of George Zimmer, the entrepreneur who started Men’s Warehouse. His pitch was designed to ensure that his customers kept their minds clearly on the future: “You’re going to love the way you look. I guarantee it!”
 
Bruce Milne
 
I love that. As you might imagine, Allan is very successful at selling companies.
 
Q&A
 
We have room for just a couple of questions before we go. One of the questions was about how many companies are venture-backed. It's only about 15%, although on the other hand, many of the buyers—and I say every client we have now is getting some interest from PE-backed companies, we had a special report on that—there was  quick question on patent pending, you do need to defend those, but it's a larger question. Elon is one of the world's leading experts, but everything helps.
 
One of the question we saw was about where the market is going. I'll throw that to Elon.
 
Elon Gasper
 
Well, no one knows that for sure, of course, but I think one adage will remain true, and that is that bull markets don't just die of old age, there will be some trigger. The problem is, if you're not already in the market, that's not going to help you, if you try to go in after the trigger, things will be stopping. They end suddenly, you need to lead that with getting in the market. The weather conditions for M&A are so good that trying to further optimize your timing cannot be done beneficially beforehand. Get in there, gain the other benefits of the process, calibrate your value, and get closer to having the timing and information you need to make the decision.
 
Bruce Milne
 
There's no such thing as going to market too early. People worry about that, but you build relationships, you don't have to accept an offer, but the relationships may advance to the point where they'll pay a lot more for you.
 
One of the questions that came in is on presentations. “You mention executive summaries as being critical as the base for presentations. Where can we learn more about that?” Good question. We're going to be having a special presentation soon specifically on this issue. I think it's one of the toughest things we do.
 
About the issue on practicing presentations, the best thing is in the crucible of doing a deal, that's the best time to practice and get ready. I would encourage you to join us at our conferences. Selling Up, Selling Out is the boot camp where we talk more specifically about this, as well as the Merge Briefing. The World Financial Symposium is good, and coming up next spring we will have a special advance two-day conference. I would encourage you to attend that for case studies and actual practice.
 
We're right at our 30 minutes, we will get back to you personally if we did not address your question. Thank you for joining us.