M & A Rainmaker

Cloud Computing is destined to be one of  the most active Hi-Tech sectors for Mergers & Acquisitions in the U.K. in 2011 according to this article

http://www.itpro.co.uk/629173/cloud-computing-companies-to-boost-m-a-in-2011

which comments on Deloitte’s bi-annual survey of U.K. based Hi-Tech companies.

Within Cloud Computing Hosted Telephony and Unified Communications is one of the growth niche’s.

Innovative companies like FutureLine, which is being supported by Cisco Systems, are addressing specific market segments e.g. Highly distributed SMB’s.

A Cisco spokesperson said:

“We are seeing an increasing demand for managed and hosted solutions in the voice space and this is especially the case for smaller businesses with less than 20 employees. FutureLine have a refreshingly new approach by addressing the key fundamentals of quality, security and ease of use and deployment. This is all underpinned by partnering with Cisco who fully understand how to manage different media provided by the various consumption models.”

Andy Brocklehurst
RSM Cisco Small Business

Following the last blog

http://mandarainmaker.co.uk/wordpress/2010/12/21/driving-internet-leads-for-uk-smb-using-hubspot-inbound-marketing-part-2/

we got the 2 landing pages done as discussed earlier.

The visit/lead tracking system is working and we can see recent visitors details. These can be transferred to a CRM system and Salesforce.com is probably the easiest one to do this with although other are possible. We will address this shortly but for now the visit and lead records will be held within HubSpot ( they are always held in both places anyway ).

We had done some work around keywords/phrases – looking for words/phrases that were relevant but not too competitive – and we input these to the HubSpot system. We also had the HubSpot system look at the keywords/phrases being used by typical competitors. The HubSpot system identified which keywords/phrases were ” stronger ” than others.

The HubSpot system will show where the visits/leads are coming from in terms whether they are direct ( someone types in the FutureLine url ) via a Google search or from e.g. The FutureLine Blog, Social Media or Press Releases.

Typical Social Media sources would include:

– Delicious

– Digg

– LinkedIn

– Reddit

– Sphin

– Twitter

– Yahoo Answers

– Yahoo Buzz

– YouTube

We set up the FutureLine Blog and discussed the type and composition of beneficial blogs. It was noted that there should be ” Call to Action ” pieces at the end of each blog. HubSpot gets many of its leads via the HubSpot blog.

We also discussed what defined ” strong ” links and noted examples of these. They include e.g. links from high ranking blog sites; links from Press Release sites.

We also discussed the fact that we could ” buy ” traffic using Pay Per Click or Media buying ( CPM ).

We determined to get the ” Call to Actions ” set up on the website together with the landing pages that we had built.

We would also do more work on keywords and phrases and when we had arrived at the best words and phrases give consideration to including these words and phrases on the website and in blogs.

We would also do more research on the ” Top 10 questions ” asked by FutureLine’s customers and prospects.

I was just Googling around when I came apon this link:

http://www.fasttrack.co.uk/fasttrack/leagues/dbDetails.asp?siteID=1&compID=675&yr=1998

If I remember correctly Voyager was in the Fast Track 100 about 3 years running.

Having acquired Spider Networks in 1996 we were growing at a phenomenal rate with 1998, 1999 and 2000’s turnover getting up to around £13 Million.

By 1998 we were heading for an exit in around 1999. Of course this turned out to be one of the best decisions of our lives because of the dot com crash in March 2000.

http://en.wikipedia.org/wiki/Dot-com_bubble

Whilst Voyager was growing in the period of the dot.com Boom it never was a dot.com company. Actually it was what was referred to at that time as a ” Bricks and Mortar ” company. That is to say that we had real revenue and real profits and we provided the infrastructure for what we called ” Large and Medium Sized Businesses ” ( LAMBs ). Voyager Networks was a Corporate Value Added Reseller ( V.A.R. ) and Voyager Internet was a Corporate Internet Service Provider ( C.I.S.P. ).

In the above Wikipedia description of the Dot Com Boom it is interesting to note the difference between what Cisco did and what Nortel did. ( Voyager was almost solely a Cisco reseller and a Gold Cisco Partner ) Not only did this ensure the survival of Cisco after the dot com crash but also it’s survival and prosperity through the recent recession

http://en.wikipedia.org/wiki/Late-2000s_recession

At the outset of the recession I believe that Cisco had about $28 Billion in cash reserves.

The mentality in the 90’s for most dotcom’s was expanding their customer base as rapidly as possible, even if it produced large annual losses. It was:

Think big, Start big ( Spend loads ), Move fast.

The mantra for today, post the dotcom crash and the recent recession is:

Think big, Start small ( Spend as little as you can ), Move fast.

John Chambers, the CEO of Cisco has another mantra aswell:

Visualise, Strategise, Execute.

This was actually how we did things at Voyager in the 90’s – We thought very big ( as Nigel used to like to say ” Punching above our weight ” ), we strategised about how we could achieve our goals, we executed our strategy in a low cost way and we moved very fast.

That, for example is how we built The Voyager National Network and became a Managed Network Services Provider long before it was fashionable to do so.

Nostalgia is actually pretty well what it used to be – to me anyway.

Cisco phone systems provider Poundbury Systems ( http://www.poundbury.com/ Telephone – 01305 259849  ) is providing futuristic phone and video conferencing systems for Dorset based Small and Medium Businesses under the banner ” Futureline “.

Awareness of the installation of High Speed Fibre Optic networks in Dorset has been raised by eg http://www.dorsetforyou.com/broadband and http://www.teamdorset.org.uk/Business/Broadband-Survey?pgid=153 and Poundbury Systems is building on this awareness by offering local businesses low entry cost phone and video conferencing systems from Cisco Systems
( N.B. BT and Cisco are sponsors of the 2012 Olympics ).

Poundbury Systems are offering a package that will provide Small and Medium Businesses with a phone and web conferencing facility starting at

only £99 per month.

Cisco and Poundbury are thinking ahead to the time when Dorsets roads will be full of people heading to and from Weymouth and Portland and the Sailing Olympics and also thinking back to the recent winter months when snow prevented travel around Dorset.

For many reasons we need to ensure that we can conduct business irrespective of whether we are physically at a place or not. Of course there is always a need to meet people in person but many of the business discussions that we have can be conducted via email, phone, video conferencing and the Internet.

If we prepare for extreme road or weather conditions then this is a basis for a high speed, resilient, reliable communications system.

It is also the basis for a ” Digital Dorset ” which will encourage inward investment and migration.

Poundbury Systems phone and video conferencing systems is flexible and scalable – phones can be added incrementally – one or two at a time and at very low cost.

Call Clare on 01305 259849

to discuss your requirements in more detail.

If you are selling a high tech business in Birmingham then the M&A Rainmaker blogsite has some useful information about the process to use

I sold the national Cisco Internet and Networking company Voyager Networks in 1999 and more recently the global Cisco Unified Communications company 5i Limited in 2009 and worked with Ernst & Young in 1999 and Nortons Corporate Finance in 2009.

Both times we used a similar process to sell the companies. It made absolutely no difference that one sale was at the height of the dotcom boom whilst the other was at the bottom of the global recession.

The process is outlined here

http://mandarainmaker.co.uk/wordpress/selling-your-business-2/

along with other useful, related sections.

An interesting article from 2007 in USA Today
http://www.usatoday.com/money/industries/technology/2007-02-23-facebook_x.htm?POE=MONISVA

see
http://www.megabuyte.com/newsletter/&id=1901

http://www.megabuyte.com/newsletter/&id=1888

The original and still the most important purpose of the M&A Rainmaker blog was to impart the lessons that I learned in selling businesses, particularly High Tech businesses.

The process is discussed here

http://mandarainmaker.co.uk/wordpress/selling-your-business-2/

in some detail.

I use the sale of 2 of my businesses Voyager Networks and 5i as particular examples in the selling your business process. One of the reasons for this is that one, Voyager Networks, was sold at the height of the High Tech, Dot Com Boom in 1999/2000 and the other, 5i, was sold in the depth’s of the global economic recession in 2008/9. Yet they both sold and sold well.

A very similar process was used in both cases although there were differences other than the economic backdrop.

When we started Voyager we had no clear strategy for it being a lifestyle business or an exit route business. It only became an exit route business after my meeting with Investec and after innumerable approaches to buy us. This was something like 1996, 3 years into the life of the business.

5i, on the other hand, was started with the clear intention of exiting ( sale or float ) 3-5 years later.

In fact both businesses sold around 7 years after thier start and in conversations with other people who have sold High Tech businesses this seems to be a typical lifetime for a business before it is sold.

In both cases we conducted a ” Beauty Parade ” to find the right M&A ( Mergers and Acquisitions ) partner. In the first case settling on Ernst & Young and in the second Norton Corporate Finance. ( Actually it was probably thier Rainmakers and thier teams that we settled on aswell as the companies ).

I remember that in the case of Voyager we discussed who was going to sell the company ( after we had decided to sell ) and put into the pot Deloitte & Touche, Ernst & Young and one other ( who I forget ). To get to the short list the three partners each put out feelers amongst thier contacts and 3 were chosen for presentations. Our accountants and our lawyers were consulted ( D & T were our accountants ). We ended up using Ernst and Young and our lawyers ( from Leeds ).

With 5i the lawyers and accountants were consulted; board members and shareholders put forward suggestions and a process was followed which resulted in Nortons Corporate Finance being selected.

I have to say that in my opinion both firms were exactly the right ones for us. The Nortons process and culture was similar to the one at Ernst & Young and this was a factor in the decision to go for Nortons.

Now, there are a great number of Corporate Finance and M & A companies to choose from and it is very important to find the right partner with the right processes and capabilities.

It is possible that the right people to use are your own accountants and lawyers but probably not. Or, at the very least, you should look for alternatives. If you are very experienced at selling companies then you may well have lawyers and accountants that you have used on a number of occassions. My advice is directed at people who have not had these opportunities.

In an ideal world you want to have decided wether you are a lifestyle business or an exit route business as early as possible. Also in an ideal world, you want to give yourself time to select the right legal and accountancy M&A partners for you and your business.

If I Google myself it’s mainly the social network entries that come to the top – LinkedIn, Facebook etc etc

Someone sent me this link today

http://viralso.com/linkedin.html

to people who reckon that they can SEO your LinkedIn profile page so that you come to the top of Google. ( Of course we all know that there are no guarantees on this front !! ).

I just thought that it was interesting and a sign of the times !!