Selling your business is a momentous step. Growing a software company from its humble beginnings to the point where it commands your desired value takes time, hard work and dedication. That’s why, for many business owners, it can be like selling a part of themselves.
To help make the sale process as smooth and stress-free as possible, we’ve highlighted some key considerations to keep in mind.
Why you’re selling
There are various reasons why you might be considering the sale of your business. The team here at Vesta have spoken with hundreds of business owners over the years, so we’ve definitely heard a good story or two!
For some, the decision is based purely on financial reasons; for others, it comes down to lifestyle factors. And all are equally valid.
Some of the most common reasons we come across include:
- Approaching retirement
- Embarking on new opportunities
- Looking for a better work-life balance
- Wanting to capitalise on the market
The key here is understanding your own unique reason for wanting to sell, so that you can be sure you’re making the right decision that paves the way for your future.
Your involvement after the acquisition
This is a significant decision for you to make. Do you want to remain with the business when it’s sold or embark on an entirely new challenge?
We’ve had the pleasure of working with many business owners in the acquisition of their software companies over the years, all of whom have brought exceptional value and experience to us and our wider group. We see this as a great opportunity for us ourselves to learn from their knowledge and, as such, give all owners the choice as to what they do moving forward.
As we commit to working with them to achieve their personal and professional goals, many of our business leaders have chosen to take on exciting new roles and responsibilities within our portfolio of companies.
David Swanston, for example, who was previously the Managing Director of CRB Cunninghams, remained in his position for 8 years following the company’s acquisition. He has since taken on a more central role within Vesta as our Portfolio Leader, and is now supporting our Group Leaders to bring the best out of our businesses.
You can hear from David in the video below, and read more about his journey here.
Maintaining customer relationships
We believe the best way to maintain excellent customer relationships post-acquisition is to let the existing management team carry on as they were, as they know their vertical markets best.
The decentralised structure that we operate means we don’t seek to take over the day-to-day running of any of our businesses. Instead, we offer the added support and resources that our expertise can provide to help them grow.
The due diligence process
Due diligence is a crucial step in the transaction process that is designed to assist both us, the purchaser, and the current owner.
From the seller’s point of view, it assists in the organisation of the paperwork and information required for the disclosure process in the Share Purchase Agreement (SPA), which is drafted by legal advisors on both sides to frame the transaction.
Because due diligence involves gathering as much information about the business as possible, the list can be fairly exhaustive depending on the circumstances. Our own process typically covers (but is not limited to):
- Finance
- Legal
- Employment & HR
- Assets & liabilities
- Insurance
- Pensions
What the future holds for the business
Knowing that the future will be bright for your business offers full peace of mind when it comes to selling.
As a buy-and-hold acquirer, we can proudly say we’ve never sold a single business. Any acquisitions are brought under the wing of our larger group to enable us to invest in their long-term, sustainable growth.
What the future holds for your employees
Naturally, being fully assured that your staff will be protected after you’ve sold your business, is central to your final decision.
We’ve long realised that as a group, our people are our greatest assets. Joining us means we commit to providing your employees with opportunities to develop their talent while learning from their counterparts from across the globe. We’ll help them to realise their career goals, with plenty of scope to progress into new and exciting roles.
One of our recent Investors in People features follows Jeronimo Alvarez through his journey with the group so far. Jeronimo was originally employed by Greycon, who were acquired in 2018. He later joined Vesta as part of our M&A team in the Latin America region, before most recently being promoted to Group Leader. He now helps acquired companies to grow, including implementing best practices to ensure future success.
Check out Jeronimo’s journey so far.
Selling your business is likely to be one of the biggest decisions you make. To find out more about why Vesta could be the perfect home for your software company, please get in touch with our team today.
