Travena, who is now the Senior Director at LeaseEagle within the MRI Software family, recently participated in a sellers panel discussion hosted by Corum. Some of the questions posed to the panelists were: What was your motivation for pursuing an M&A process? What surprised you most about the M&A process? And what advice do you have for Tech CEOs considering M&A? Here’s what we learned from Travena.
Looking to grow
With its commercial property lease management software solutions used to manage over 50,000 locations across Australia, New Zealand, and South Africa, LeaseEagle was a successful company. However, Travena was looking to grow the company even further. He recalls, "I was looking for a new shareholder to achieve the next phase of the company's growth into international markets. It was the ultimate objective of what had been a highly successful five-year business strategy. I felt like I wanted to do another five big years to further expand internationally."
Travena approached Corum with the idea of taking on a partner to fund that growth, but wasn't sure if he could get an optimal deal. He says that after nearly 20 years of being completely consumed in building LeaseEagle, the idea of selling the company had some appeal, but he didn't know if he could achieve the valuation to warrant a sale. Furthermore, Travena had initially envisioned bringing in a shareholder to fund the growth strategy. However, a strategic buyer, MRI Software, made a better offer to acquire the company. Though different than his original plan, the offer to purchase LeaseEagle was very attractive. So Travena had to think hard whether to entertain the offer or not. He accepted the offer.
Being Prepared
Something that surprised Travena during the M&A process was the investment of time required. What he learned from the experience was the importance of being prepared. Travena says, "I thought we were ready and we still had a lot more to do, especially when the buyer's timeline expectations can be so intense." His advice to sellers: “You don't want to be seen as slow or unprepared in the eyes of a buyer. Often they're looking at multiple deals at once and so, like anything, the easier things are for them the better."
Travena also noted that the level of detail required through the pitching process and due diligence can be overwhelming. That breadth and depth of knowledge can even be beyond the scope of a company founder like Travena. He found out that it's quite possible to know less than anyone else involved in the deal, including the buyer, the broker or lawyers. That mismatch can be detrimental to a deal, so Travena strongly encourages sellers to get good experienced advisors to assist. He put it this way: "When you are deep in the trenches negotiating your exit, you absolutely need the best advisors who have been there before and know what to expect and how to get the best outcome. Pay for the best advisors you can, ones that truly have live deal experience. Remember, you aren't dealing in hours, you are dealing in value."
Taking on Corum as an advisor led to an optimal outcome for LeaseEagle. Travena says, "I've never sold a company before and after building a relationship with Corum, I was able to see firsthand how millions in extra value can be created with the right knowledge and process.”
Life after the deal
After the acquisition, Travena continues his work with LeaseEagle. And though the M&A process was more intensive than he had expected, it had a happy outcome. Travena recalls, "Ultimately, I sold out completely and I'm now a senior executive in the acquirer. There are now literally four or five people for every role we previously had, which has been a lot of knowledge transfer, but ultimately giving me back my life. After a short time, I realized how much longer and harder it was going to be to get my company to the next level on my own. And so, now I'm very glad that I sold."