We help technology consulting clients increase enterprise value by successfully executing transactions which fortify, extend or transform their businesses. Our principals have run three of the most active acquisition programs in the sector over the last 15 years, resulting in over 50 closed transactions, and bring deep insight into full lifecycle M&A efforts. Our program draws on established best practices to provide a unique value proposition. We help our clients minimize wasted time and money, maximize value accretion and minimize transaction risks by:
- Developing at the outset clear program goals with well-defined criteria for evaluating potential candidates. Too many acquisition efforts are “shotgun” approaches without clear direction, resulting in time wasted on conference calls and meetings with candidates that don’t match up well with strategic goals and a poor reputation as an unprofessional “tire kicker” among the community of potential selling firms.
- Identifying candidates who match up well against the evaluation criteria. Our deep experience in the industry provides proprietary insight into the pool of potential targets and allows us to quickly isolate those firms that fit the developed profile.
- Utilizing long-standing relationships with the leaders of candidate firms to cut through the inbound noise of unfocused and frequently unknown soliciting bankers and suitors and have substantive, timely conversations about the opportunities offered by our clients.
- Providing a customized, individual story around the benefits of an acquisition by our clients while thoroughly screening candidate firms against our detailed evaluation criteria. Many bankers utilize a standardized mass email template approach to contacting candidates and do not have the relationships to allow for an early-stage open exchange of information to determine the degree of mutual fit. Our goal is to develop interest by all candidates that fit our criteria while screening out those who do not before wasting client time in unproductive discussions.
- Evaluating the relative strengths and weaknesses of candidates before investing substantial time in formal due diligence and legal documentation so that issues may be confronted and reflected in the proposed deal valuation, structure and integration plan. Many buyers rush past these difficult issues to get a deal done and have very high deal failure rates during due diligence and a lower success rate after closing.
- Developing and negotiating deal valuations and structures that provide attractive return on investment to our clients while minimizing risks through protective structures. Technology consulting firms’ relative lack of long-term committed recurring revenue and heavy reliance on human capital retention bring unique challenges to appropriately valuing and structuring transactions. Our industry focus and extensive transaction history result in creative insight into how to best deal with these challenges.
- Coordinating formal due diligence efforts and working closely with our clients’ attorneys to validate the investment rationale and document the appropriate provisions. We have unique insight into transaction norms and negotiation ranges for technology consulting transactions and play an active role in negotiating provisions around areas such as escrow amounts, durations and payment triggers, indemnification caps, baskets and survival periods and the scope of representations and warranties.