Do you own a software business?
Well, that’s interesting. So do we.
Are you thinking of selling?
Oh wow. We buy software businesses!
What are the chances?
I know right. Maybe we could be a good investor.
What are we looking for?
Software businesses to become part of our family.
Is this you?
- You operate a niche b2b software business
- With an established client base
- Selling business-to-business
- With annual revenues above £500k
- Have low Churn Rate. Ideally below 10%
- Ideally more than 30 Customers
- Based in UK or Ireland
- And are profitable
If so, we’re interested. Regardless of where you are in your journey. We’ll work with businesses at various stages.
For example, you might need support to reach the next level. To free your non-productive time. Let someone else take care of admin, so you can focus on doing what you do best.
Or, your business might be mature. Growing slowly. That’s ok.
Maybe your current shareholders are looking for an exit. Perhaps they wanted a galloping unicorn and you’re managing a steady trot. That’s fine with us.
Perhaps you want to retire. Need someone to look after your client base? We could give them a new home.
Whatever your individual circumstances are, we can be flexible.
Software is our blood
We’ve been around for a couple of decades. As our market started to change, we’ve changed with it. We’ve built software our entire life. It runs our business and we licence it around the world.
Now we’re looking for businesses like yours, to bring in to our group. Maybe we’ve found a way that works for us both. A way that means you can achieve the outcome you want. And write a new chapter in your story.
Gavin Cockerill
CEO Grafenia plc
Who the plc are we?
It’s possible you’ve heard of us. It’s also possible you haven’t. You might know some of our brands or recent acquisitions. Always at the heart of what we do, is software.
You might be a customer (well, thank you). Or have cursed us as a fierce competitor. You might even be a shareholder (thanks once again).
For nearly two decades, we’ve been a public company, listed on the London Stock Exchange. Living life in public has its challenges, but it also comes with many advantages. One of those is access to capital, and patient shareholders.
ROLL YOUR BUSINESS INTO SOFTWARE CIRCLE
Want to be part of this?
We want to extend the range of businesses in the Software Circle family.
We’re looking for more software businesses to become part of our platform.
If you build software that’s well known in your niche, we’d like to talk. Maybe you’re the dominant player in a specialist area. Or maybe your software does something weird and magnificently obscure.
Ideally, you’ll have a broad client base. You won’t be reliant on a single client for more than a third of your revenue (or profit).
You might have different reasons for thinking about selling. To exit. To grow. To retire. We could be the investor you’re looking for.
Right, are you right?
THE RIGHT SECTOR
Whilst we’re fascinated by blockchain and driverless cars and drones and maglev trains, we’re only interested in acquiring vertical market software businesses. Sorry.
THE RIGHT REPUTATION
You own an established software business, with a flawless reputation. We won’t uncover a history of dodgy dealings or skeletons in your repositories.
THE RIGHT SIZE
You’ll have annualised recurring revenues of at least £250k and your business will be profitable.
THE RIGHT TEAM
You’ve grown something to be proud of. You’ve put strong foundations in place and have a team who you trust and rely on.
THE RIGHT STAGE
Maybe you’re thinking about an exit now, or in the future. Either is fine. Just be open with us about your preferences.
THE RIGHT FIT
Our combined team will need to get along. We think cultural fit is insanely essential. If we don’t click, no offence. But it won’t work if we don’t.
Where could I be located?
Honestly that doesn’t matter. Change your Zoom background to be a fake beach or leave your shutters open, so we can see the actual sea. Doesn’t make any difference. One rule… no shirt, no skyping.
Our leadership team is based in the UK, so we’re most familiar with acquiring British and Irish companies. As long as you can communicate in English, we can work with businesses from anywhere.
We’re all very used to remote working. We won’t need you to relocate or start wearing flip-flops in an office.
BECOME PART OF OUR NETWORK
What happens to my brand?
Your clients know your software. They know your name. It makes sense to keep the brand you’ve established. You won’t need to rebrand.
You’ll continue to support your existing clients and acquire new ones the way you’ve always done.
If your clients are SMEs, we might want to package your software for the tens of thousands of clients in our network. Or refer prospects to you. Or maybe not. If it makes sense, we’ll do it. If it doesn’t, we won’t.
Do I need to change my stack?
No. We’ve been around long enough to know how complex and time-consuming migrating to a new platform can be.
You’ll keep your technology stack just as it is. Your codebase, your control. Unless of course, there’s a reason to change.
It does make sense to combine our accounting and finance though. To relieve you of the essential, yet boring tasks, you probably do each month. Maybe you’ll want to migrate to our billing and payment collection platform. Maybe not.
What will happen to my team?
We’d expect you to continue to build, sell and support your software, with your existing developers and sales team.
But maybe you’re planning a retirement and a gradual phase out. That could be over a few months, or over a few years. Let us know your preferences and we’ll do our best to accommodate them.
One of the benefits of being part of a bigger business, is some back-office functions can be centralised. Finance, bookkeeping and auditing. And we can exchange ideas on marketing best practice, client acquisition metrics, pricing and retention strategies.
LET’S TALK ABOUT THE FINANCIALS
How do you value my business?
Ah! The million dollar question.
We’re open and transparent about our valuation range. We don’t start with an insane sky-high offer, then chip away at the price. When we agree heads of terms, that’ll be the price we pay. Subject to due diligence, ofc.
We value a business based on it’s earnings, adjusted for director’s costs. Our valuation multiple is typically lower for smaller deals and higher for larger businesses. That reflects the deal costs, which don’t tend to fluctuate.
What if I made a loss this year?
Hey, it’s understandable. Lots of factors worked against business over the past twelve months. You might have swung from a small profit to a small loss.
We look for stable businesses, who’ve had consistent earnings or shown growth over the past four or five years.
When we calculate our valuation, we look at the typical profits over the whole period. That means that blips and weird peaks can be normalised.
We’ll just need to understand what needs to happen to return the business to profitability, but it ain’t a deal-breaker.
How will a deal be structured?
Exactly how we structure a deal will be based upon a number of factors. We’re open minded and look to find the right deal structure for all parties. We’d typically acquire 100% of the share capital of your business. Your shareholders would sell their shares to us at the valuation we agree. You and your team would become part of the group, as employees.
When will I be able to exit?
Maybe you weren’t thinking of an exit at all. You’ve been doing just fine yourself. That’s great. Perhaps we can do more together. Your energy, our support. Your leadership, our sales network. We need talent to help us deliver our goal of becoming the largest permanent home for vertical market software companies, in the world.
You might have been dreaming of retiring to Ibiza soon. Or moving to the country and becoming an Alpaca farmer. You probably deserve that.
Maybe the business can run without you. Super! Maybe you need some time to pass on your responsibilities.
How painful will this be?
The process of selling your business can be arduous. There is a lot of preparation and detailed due diligence. We’re experienced acquirers so we’ll make the process as smooth and as quick as possible.
One thing’s clear, being in business can be lonely at times. Especially when the world is changing around you. There is strength in being part of a bigger organisation. You might be used to working for yourself, calling all the shots. You probably don’t think of yourself as ‘corporate’. We’re a listed company, so you’d expect there are more rules we have to follow.
However, we have patient investors. They favour investing for the long term. It doesn’t have to be painful. Together we can be stronger and build something even better, together.
What’s the next step?
Let’s have a brief chat.
Email letmein@grafenia.com and arrange a time. Just let us know your approximate revenue for last year and and share a link to your website.
On the call, we’ll explain our vision and answer your questions. We’d like to hear about your history and hopefully our combined future. We can chat through the headlines and the finer details without any obligation on either side. If you need an NDA that’s no problem – just let us know beforehand.
After the call, we’ll need your most up-to-date accounts and then we’ll take it from there.
We’re an experienced, well-funded purchaser with a mandate to acquire businesses that fit our criteria and strategy.
We can meet the needs of serious vendors.
Are you in?
Join the Software Circle
Interested in sourcing businesses to become part of Grafenia? Join the Software Circle programme. Look for software businesses to acquire and run, with our support. Email letmein@grafenia.com to start a conversation.