Selling a High Tech Business

Posted by Chris on February 1st, 2010

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

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.

Advice on Corporate Finance in Birmingham

Posted by Chris on January 14th, 2010

If you are looking for advice on Corporate Finance and M&A in the Birmingham area then take a look at the M&A Rainmaker website for practical help and information

Having started a Midlands based ICT business ( Voyager Networks ) in 1993 and sold in 1999/2000 Chris Windley went on to invest in a number of High Tech and other businesses with varying degrees of success. Last year he successfully sold one of these, 5i Limited, to Impera plc ( renamed 365iT plc ) which is currently on a buy and build strategy.

Following this sale, at one of the worst times in economic history and the earlier sale of Voyager ( at one of the best times for High Tech in history ) he documented the sales process used in both sales on the M&A Rainmaker website.

This has been added to with practical information about investing in businesses, marketing businesses and running the salesforces in businesses.

What makes a good rainmaker, and does gender matter?

Posted by Chris on January 6th, 2010

Interesting article in the Law Gazette 

Friday 23 October 2009 by Sue Bramall

Princeton University defines a rainmaker as an ’executive who is very successful in bringing in business to his company or firm’.

I would like to expand that definition to define ‘successful’ as providing profitable employment for a number of employees within the business – they make business rain for their colleagues. To me, someone who generates sufficient business just to keep themselves comfortable is not a rainmaker.

Rest of the article here

and Sue has added more to this in another blog here

Wikipedia on Mergers and Acquisitions

Posted by Chris on January 6th, 2010

Useful information on M&A

Bring on the Rainmaker !!!

Posted by Chris on January 6th, 2010

An interesting article on David Wimers blog:

“Bring on the Rainmaker!”

imagesca3axevrM&A Transactions require one in 2010.

A Rainmaker is described as one who is known for achieving excellent results in a profession or field, or who is believed to be capable of producing rain, as through magical or ritual actions. And whether you’re the owner or another key person in your organization, you need to be beating the drum for rain these days after our year of drought. We all know the worth of water when the well runs dry. Certainly in the M&A Transactional market of 2009, the M&A Advisor has become Chief Rainmaker for 2010. 

more here..

Copyright © 2007 M & A Rainmaker. All rights reserved.