Back in 2021 we sat down with Des O’Mahony, the Founder of Bookassist, which Vertus Group [formerly known as Jonas Software’s Club & Hospitality Portfolio] acquired in 2017. He gave us his insights into the acquisition process experience for Bookassist and what life looks like post-acquisition at the company.
How did you discover Vertus Group, and how were we compared to other acquirers?
Vertus Group [Jonas] really discovered us rather than the other way around. The M&A team had been in touch with me on an ongoing basis every six months or so and had been reasonably persistent to have conversations. I have to say when they were initially in touch with me, I wasn't that interested in the process in general.
It had nothing to do with Vertus Group [Jonas], but I wasn't thinking in terms of either investment or acquisition of the business. But because that dialogue had built up over a number of years, then it was far less of a surprise for me to jump in and get involved when the time came.
Why did you decide to sell to Vertus Group?
Fundamentally, I think it’s because it solved my issues. Yes, I wanted to deleverage and de-risk a little bit, but more importantly I thought there was great value in the company [Bookassist], and I thought there was value in me staying in the company and driving it forward. It allowed me to continue doing what I really liked and to continue taking the next steps towards making the company even better.
A lot of people were interested in buying the company because it had been successful, but a lot of it was about breaking up the company or about an asset buy. This would mean they would buy the contracts, but most of the staff would be sent home. While some of the offers were lucrative in and of themselves, I did not feel good about what would ultimately happen to the company.
The discussion with Vertus Group [Jonas], however, was very different. If you want to continue running the company with your strategy and your ideas, then you can do that, and the future of the company will be safeguarded. Vertus Group [Jonas] has never sold companies and that really appealed to me. I had no idea that kind of model existed prior to those discussions. Once I was made aware of those options, it quickly became apparent that this could be a good solution for everybody.
What was the pre-acquisition process like?
The process turned out to be relatively short from the very first meeting, which was August of 2017, to closing the deal in December 2017. The primary thing that stood out to me about the whole process was the fact that there were very strong and open discussions at all stages.
It was clear after a number of small discussions that there was a model for how the business was valued. It was very important to me to see that there was a sensible way that the business was being valued and in fact, the valuation that we started with in the discussions was the valuation we ended with. I had seen before in Venture Capital scenarios where a really nice carrot is dangled and by the time you get to the end of the discussions it has been whittled away.
It was an honest discussion from day one and a very positive discussion. It also focused on “how do we build the business to the next level,” not just “what is it worth.”
Can you describe life at Bookassist after the Vertus Group acquisition?
It didn’t change much day-to-day and still hasn’t changed an awful lot. For most of the employees, it wouldn’t have changed significantly. The biggest immediate impact was that we needed to change accounting systems and practices. Vertus Group [Jonas] is part of Constellation Software Inc., a publicly traded company and the numbers from our business roll up into the parent company. It was moderately painful to have to go through the process of changing it, but once that was done it gave me a completely different vision of the business. Because of the way Vertus Group [Jonas] structure their accounts and the way that they structure KPIs, I was able to get good insight into the performance of my business in a way that I had not seen before.
Despite the process itself being an immediate “all hands-on deck” to get this changed quickly in the first few months, the result of it was very positive what followed.
At Vertus Group, we like to talk about autonomy, buy-and-hold forever, and our culture of sharing best practices as key differentiators. How has your experience aligned with these differentiators?
They have been very key. I’ll start with autonomy. One of the key issues for me was to be able to continue with the kind of strategy and approach to the marketplace that I was interested in. There is a lot of strength to be leveraged and Vertus Group [Jonas] recognized that and let business leaders fulfill those dreams where they want to, and I think that’s important.
Interestingly, if you’re not delivering on your numbers and things may not be working, the approach from the portfolio level above is “how do we help you?” It’s not a criticism issue, it’s more “how do we all work together here to get that business moving?” If something is not working, you can fall back on so many other people who have been through problems or issues in their business and they can share that experience with you. There are literally hundreds of people that you can tap into within that family that you couldn’t have done as an independent business.
From a personal perspective, it’s been a very strong learning experience for me in terms of how business is run because prior to this, I had no business training. I was running my business, and it was successful, but it was really run with how I felt things should be done. Now being able to tap into that community, I’ve learned an awful lot more and it’s been a huge learning experience for me.
What tips and advice would you give to a business owner thinking of selling their business?
Business Owners need to know why they want to sell and be honest with themselves. Sometimes you simply want to sell because you want to make some money, and that is fine, but a lot of people don’t want to say that. I think honesty with yourself about why you want to take this step is important. It is perfectly fine to say, “I’m getting older, I want to sell” or “I want to move on and do other things.”
Second, when you get to the process it is critical that you know your numbers. I often see companies where, like myself, you have technical people who have a great passion for the product they have, and they will talk for hours about why it’s great. The bottom line is unless that passion drives numbers in a positive direction, then it’s a misdirected passion. What is important is that everything I believe about my business translates to numbers. You have to know your numbers and you have to know the direction they are going in.
Finally, it’s important to be honest in the process itself. If you have positives, you should speak up. If there are negatives in the business, you should get them out early and say, “Okay here’s a negative. How are we going to solve this one and fix it?” If you try to hide stuff, by the time you get to the end of a process and something suddenly comes out, you have destroyed the trust you’ve built along the way. You more than likely will get a reduction in valuation because it looks like something is not the way it initially seemed. More importantly, you may actually damage the rapport that you’ve built up with people during that period.
