Lois Melbourne and her husband started Acquire Solutions, a software business that helped large companies manage their employees. After 18 years, they had grown to 85 people and received an offer from a private equity firm.
Lois Melbourne and her husband started Acquire Solutions, a software business that helped large companies manage their employees.
The Melbournes self-funded their business over 18 years, eventually growing it to 85 people when they received an offer from a private equity firm rolling up software companies in the human resources field.
The offer represented enough money for the couple to permanently retire in their forties, but it did not come easily.
To get the deal done, Melbourne had to negotiate with an army of lawyers representing the private equity buyer. She also had to find a way to tell employees who were like family members to her that the business was being sold. The stress of the negotiation and a feeling of loyalty to her staff left Melbourne in tears as she tried to explain to her team why they had sold the business. In this episode, you’ll learn:
- How and when to tell your employees you’re thinking of selling.
- How to get your senior managers to help with the negotiation.
- The pros and cons of selling to a private equity firm.
- How acquirers view the collectability of international receivables.
- The definitions of escrow and warrants and how to negotiate each.
- The surprising role a good advisor plays in getting your deal done.
- The importance of having a digital archive.
Do You Have a Positive Cash Flow Cycle?
Unlike a lot of software companies, the Melbournes were able to keep 100% of their equity as they grew their business to almost 100 staff, which comes down to having a positive cash flow cycle, something we’ll cover with The Valuation Teeter Totter exercise in Module 10 of The Value Builder System™. Get started for free by completing your Value Builder questionnaire now.
About Lois Melbourne
Author and speaker, Lois Melbourne, co-founded Aquire Solutions in 1994 and sold it in 2011. Thanks to her co-founder, Chief Technology Officer and husband, Aquire created innovative talent management, and human resource analytic software which Melbourne and her team sold to enterprises all over the world. As an entrepreneur and CEO Melbourne helped organizations align their best workforce with their missions and goals. She is most proud of the culture they developed within Aquire which fostered a productive, creative, dedicated workforce that enjoyed their work.
While working with every industry in multiple countries, Melbourne experienced the power of people truly in jobs they enjoyed and for which they were well suited. She also saw the pain of people excruciatingly mismatched for their job. While mentoring students, she made the connection that we must help kids, even at very early ages, connect with careers they purposely pursue. Inspired Kids Become Inspiring Adults is the motto of My Future Story, Melbourne’s current organization. As an author, speaker and facilitator, Melbourne creates kids’ books focused on careers, coordinates career fairs for students, helps organizations develop meaningful internships and scholarships to develop our future inspired workforce.
Do You Know An Entrepreneur With A Story To Tell?
We’re constantly on the prowl for interesting stories from owners who have sold their businesses. We look for owners who have sold a business that was generating $1 million or more in revenue, who are willing to share their story candidly with our community. Forbes ranked Built to Sell Radio one of their top 10 podcasts for entrepreneurs and we have more than 100,000 downloads, so your story will get shared with a great community of like-minded owners. Nominate yourself or someone you know today.
At Built to Sell we’re all about shifting the balance of power from the buyer to the seller. If you support our mission, please write a review on iTunes—and if you have any comments or questions you can find us on Twitter and Facebook. Tune in every Wednesday for another episode of #BuiltToSell Radio with John Warrillow.
If your company has an open culture where employees are friends, how do you tell them you’re thinking of selling?
Rocky Romanella was CEO of Unitek, a $450 million business he sold in 2015. This episode covers the sale of Unitek, and taps Romanella’s experience as a buyer of companies. Before joining Unitek, Romanella was president of UPS’ Residential & Retail Operations and oversaw the integration of more than 20 UPS acquisitions.
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