The Sale of Vuture

Transaction Details

• Company: Vuture
• Vertical: Marketing
• Founders: David Brady
• Transaction Type: Full Sale
• Buyer: Campaign Monitor (Insight Partners)
• Financial Advisor: Vista Point Advisors

We had successfully built a software company out of a marketing agency.

When we decided to find a partner to grow with, we asked ourselves, "How do we find the right buyer?"

Vuture’s Origin & Growth

After working in marketing for many years, three friends and I founded a marketing agency in London.

We did typical agency things: planning strategy projects for clients, building campaigns, doing design projects, etc.

We quickly realized that to make it in the agency game, you have to be super good. If you’re not absolutely amazing, then every year is another struggle to build up your book of business, always trading time for money.

In 2006, we thought, "Is there something we could build, some technology we could create that would optimize and automate the work we do? Then we could get licensing revenue."

We came up with the bones of a marketing automation product, though we didn’t call it that at the time.

Using our agency revenue, we funded the development of a technology that would essentially replace our own jobs and bring in recurring revenue.

By keeping costs managed, we were able to grow in our target sector with little competition. After developing a key integration with a popular software that held 95% of our target market, we eventually reached £10M in annual turnover with high retention—around 96% per annum.

Deciding to Pursue a Transaction

We were doing well, to the point where we decided it was the right time to sell.

There were several reasons why we felt the time was right to sell.

For one, the majority of our personal wealth was tied up in the business, so we were each running a high risk profile. We’d never taken cash out of the business over the 14 years of running it, and we felt it was time to dilute our risk.

In addition, we were interested in growing the business. At a certain level of maturity, you need to start investing in systems and services like HR and product management. We had the choice of investing in those on our own or finding the right strategic partner who already had these capabilities. We preferred the latter.

Choosing to Work with an Investment Bank

Having made the decision to sell, we now found ourselves asking, "How do we go about that?"

We’d never sold a business before, so we came to the conclusion that we needed a team of bankers to help us.

Initially we were looking for bankers in the UK because that just made sense to us. We interviewed a few different flavors of investment banker locally to see what we liked.

As I was reaching out to various banks, I reconnected with Vista Point Advisors, who had reached out before from their headquarters in San Francisco.

In our first meeting with Vista Point, we were attracted to the level of excitement they had, which we weren’t getting from some of the other bankers we were talking to. Vista Point’s background in software made them attractive candidates to hire as our investment bank.

At the same time, we worried about their location. How well did they understand the UK market? Would they be able to work across time zones?

After some consideration, we decided what we really cared about was finding a banker that really got our business and that understood how to present our business in the most effective way.

We wanted an outfit that could match us with the right buyer to help us capitalize on the work we’d done for the past 14 years. Vista Point seemed best equipped to do that.

On top of that, a big swing in Vista Point’s favor was that our buyer probably wasn’t going to come from the UK—a small market compared to the US. Having a US-based bank could be an advantage.

We decided to hire Vista Point.

The Process & Finding a Growth Partner

As we began the process with Vista Point, we expressed to them that we wanted to find a strategic partner to help us grow our business.

Part of that goal was ensuring we had a strong cultural fit. We wanted an organization whose values mirrored and matched our own, since we intended to stay on with the business after the sale.

Based on those criteria and together with Vista Point, we built a buyer list with a mixture of strategic and private equity buyers numbering about 30. With their support, we went around pitching to each buyer.

As first time sellers, we appreciated the handholding from Vista Point.

If we fell short when presenting to buyers, Vista Point was quick to step in. They kept us focused around closing the deal, but not to the point of doing the deal at all costs. They always told us, "At the end of the day, it’s got to be your decision." They never wanted us to do a deal we weren’t comfortable with.

We built a strong working relationship with Vista Point—they could be blunt with us when we were failing in the process and we could be blunt back.

Time zones didn’t make a difference—the team at Vista Point would work whenever it was required.

Several of the bankers were on quite a few 3:00 AM calls to make the time zones work. It was like having someone local.

Vista Point was careful about keeping us aware of risks, because we didn’t want a deal falling out of bed at the last minute.

When we had a pool of buyers serious about buying, Vista Point was keen not to get into exclusivity with any suitor until we were almost certain we were going to get married. They were able to keep interest going from multiple buyers for as long as possible so we could get the best deal possible.

During negotiations (which Vista Point was heavily involved in), buyers threw us a few curveballs in the form of performance-based earnouts. These earnouts would make part of the payout contingent on company performance after the sale.

As first-time sellers, this structure was scary because it had a big impact on our sale value. Vista Point was conscious of the risk and was able to negotiate for terms everyone was happy with.

Moving through the process, we leaned more toward strategic over private equity buyers. At the end of the process, we had three strategic buyers we would have been happy to close a transaction with.

The Outcome

One of these buyers, based out of New York, was particularly interesting to us. We liked this buyer because they shared similar philosophies with us and made the effort to come see us in London. When their offer came through, it was a good deal for us. We entered exclusivity and started deep diligence.

Though diligence was quite onerous, Vista Point had walked us through several steps to prepare for this stage of the deal. Because of those preparations, we could often reel off the answers to questions the buyer posed.

Satisfied with the results of diligence, we happily closed the deal with the partner who would help us grow our business, just as we had hoped.