Tequity Helps Technology Startups Find Their Best Strategic Buyer

Written by Sean Murphy. Posted in 5 Scaling Up Stage, skmurphy

Tequity advises software and technology companies on how to get the best valuation from strategic buyers with a good cultural fit in an acquisition.

I’m Kevin Tribe. I’m the managing director of Tequity.

We do merger and acquisition advisory work for software and IT companies across North America. We do transactions, primarily in software and IT services firms. We crossover a little bit into digital media and  telecom occasionally but we would work with companies who would have enterprise value from two to forty million dollars.

We search for strategic buyers. In ten years of doing this, virtually all of the transactions we have done have been between a selling company and a strategic buyer who brings other assets to the party and can leverage those to provide maybe a better cultural fit, maybe a better valuation or maybe better terms for the transaction.

The thing that the clients would come back and say, “When I didn’t know who to ask, I always felt that you were pulling in our favor and I could trust your recommendations.”

It’s not a cookie cutter business. Every client, every situation, every company, their assets, their people, their software, their markets, their customers are different. It’s fun to help them cross the finish line and see that kind of big check that comes along with the success of completing a transaction.

Tequity’s focus is sell-side M&A advisory services to shareholders and executives of lower middle market B2B software and IT services companies. Clients are typically North American headquartered (although we have recently worked with clients in the UK and Australia). Buyers can be global, depending on the project.

They target companies that have revenues of $3m to $25m–they have worked with larger clients but the bulk of their projects tend to be between these brackets.

They work extensively with potential clients before engaging to understand strengths, weaknesses, attributes that will be attractive to buyers, the model, the technology, the bench:

  • They first thing they seek to understand is the founders’ objectives of the shareholders so that they can help make a joint assessment of how achievable they are likely to be.
  • After that they will prepare an opinion on the likely range of market value after analyzing information on many key aspects of the firm.
  • If there is mutual agreement on objectives then they move forward.

SKMurphy Perspective

We have recommended to a number of clients over the last 8 years that they attend workshops and webinars by Corum as they start to explore how to find the best fit with an acquirer that is going to give them a good valuation. Most recently EMOBUS was very satisfied with the results they saw with Corum’s help. Tequity is another firm we are starting to recommend not from any dissatisfaction with Corum or their programs but because we always like to be able to offer several quality options for categories of strategic advice and guidance that we cannot assist with.

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