3 Lessons Learned Closing My First Acquisition

On Thursday 7th October, 2021, I sent an email to Nick, the CEO of Crozdesk simply titled, 'Exit?' It kickstarted a conversation that 6 months later culminated in our recent acquisition of Crozdesk.

We'd partnered together previously, but hadn't spoken for a couple of years. To my slight surprise, when I sent that email asking him if he was up for selling Crozdesk, he coyly responded, '....there could be an opportunity.'

As any self respecting seller would, he was playing hard to get. He told me that he had a few other interested parties who also wanted to close the deal. Unperturbed, I persuaded him to come and meet us in Vancouver to see if we could hash out a deal.

Within a couple of days we'd worked out the basics; it was super simple: 50% cash up front and the remainder tied to transition milestones.

Early on, I had high hopes that we could close the deal within a couple of months, and wrap things up before Christmas. Going into this process, I now see that was completely na?ve. I'd never done a large deal before so wasn't really sure of the process and what actually needed to happen.

It ended up taking twice as long as I'd hoped. We were held back by legal, financials and due diligence. Everything was complicated by time zones and differing tax jurisdictions. There were lots of occasions during that period that I nearly gave up, when I thought the deal wasn't going to go through.

But it eventually did, and transforms BWZ into a media tech company with our new SaaS vendor lead gen solution SoftwareSelect.

Here are three lessons I learned on the emotional rollercoaster of my first acquisition over the past six months.

It really is tough.

Yes, I know, that's what everyone says about M&A. But no one really explained why, or what exactly was going to be tough. So here's what's I found tough;

It's tough securing the financing for a deal.

Despite our solid financials, the fact that we are only three years old and have a pretty complex business model means we weren't exactly flavor of the month with the banks. I spent a lot of time filling in paperwork and on calls trying to convince banks to lend us the capital. In the end, it was RBC who came to the rescue at the eleventh hour. Trying to close a deal at the same time as not actually having the financing for it is tough!

It's tough finalizing legals for a deal.

This was made more complicated that we're a Canadian company, and Crozdesk is based in the UK. Despite having a simple LOI, and an agreement to limit due diligence through warranties, the devil really is in all the little details. There's no workaround for it being complicated, it's tough, and expensive.

It's tough holding the tension of something happening, but maybe not.

The business can't stop and wait to see what happens. So while the deal was still going through, I started running the business on two parallel mental tracks - one envisioning the deal was going through, but at the same time ploughing ahead with projects which I knew would be redundant if the deal did go through.

It meant a fair amount of wasted effort, and a fair amount of confusion internally for the team in planning and executing. During that time, we operated the business a bit bipolarly. It meant we wasted a lot of time and money creating things that we've since got rid of.

Relationships are everything.

So M&A really is tough - and if hadn't been that I'd spent a good amount of time with Nick, the CEO of Crozdesk, while crafting the deal - then the deal would have almost certainly fallen through.

I learned you need something to fall back on when you feel like you're coming up against one of the many brick walls you'll come up against in seeing a deal through.

Thankfully, I liked Nick. I wanted to work with him, and I wanted to find a way to make it happen.

More importantly I felt like I could trust him. Trust him that he was committed to seeing the deal to go through, that what he said was true, was actually true, and that he would put in the effort to make the upcoming marriage a success.

Closing is just the beginning.

Making the marriage a success is obviously the whole point of the deal. But it can be very easy to become shortsighted and see the deal being the end goal, rather than the happy marriage together.

Up to the point of the deal closing, I dedicated a lot of energy into getting it over the line. But now the deal is closed, I wish I'd spent more time figuring out the post acquisition 'What now?' and 'What happens next?' plan.

Yes, we have a beautiful Gantt chart which shows how the immediate technical integration will go. That's pretty straightforward. But how the two teams and businesses become one, and align on culture, values and process is a challenging task. And I know it's where plenty of deals eventually fall apart or are squandered.

So if you're on your way to your first acquisition - prepare for it to be tough, make sure you invest in the relationships important to making the deal a success, and make time to prepare for when the deal's over, and your new life together begins.