US based Working Professionals Acquires IT Business in India

[Success Story]
Karen & Larry successfully found their Business Match at IndiaBiz
2019 Acquisition: IT industry
Target: Burgeon Software Pvt. Ltd.

“IndiaBiz has really moved me off from my previous Acquisition deal”

                              Introduction
Karen & Larry both have vast experiences working for large corporations in the USA. They always wanted to start something of their own. They worked on multiple projects together and brought complementary skill sets to the table.

They decided to take a plunge in this entrepreneurship journey together. Instead of starting from scratch and building a team; they decided to acquire a running tech-company in India.

Why not India, an Aha moment?

In their professional experiences, they worked with different teams/companies based out of India and they relied upon them for successful projects execution. There they had an Aha moment at one point where they just realized that everything that they were looking for might be there in Indian tech companies. They decided to explore the market in India to explore a lucrative acquisition opportunity.

India Specific Challenges

The most important and equally challenging task is to find the right business opportunity. In India, such information is not easily available within the SME space. Karen and Larry also faced the same challenge. Upon research, they found some suitable opportunities listed on Indiabiz platform. They found the information availability of the businesses on Indiabiz platform very helpful as this enabled them to quickly evaluate the opportunity with their interest and preferences.

Finding multiple businesses available for an acquisition which are suited to our goals was a challenge and the next challenge was to get the different data points in a timely and standardized format (including business details, financials etc.) from business owners in India.”

They found that business practices in India were a little different, everything runs a little bit more organically based upon the needs where else Karen and Larry were looking for a more structure type of environment.

Why did they choose Indiabiz as a partner in their acquisition journey?

Karen and Larry evaluated multiple platforms and advisory companies who could potentially work as their partner for their first acquisition in India. The teams they inquired were prompt but did not take time to build the trust. Also, upon going through vetting process, they did not find the comfort they were seeking in their partner company.

There were some other companies that had really beautiful websites represented, the stature of their team and the quality of their company. They were prompt in the communication but at the same time did not take time to build the trust and just wanted to sell us their services. We did not feel comfortable or confident having them as a partner in the acquisition journey.”

They found IndiaBiz team very straight-forward with their advice from the beginning. The advisory team shared a lot of challenges (which they faced) which could come in the transaction, where it could go wrong etc. Nothing was sugar-coated or may just seem better or worse. Overall, the team created the trust that they were looking for in their partner in the acquisition process. The comfort level made them choose Indiabiz.

How did it go for Karen and Larry?

Indiabiz team began by building buy side thesis for Karen & Larry and then started from a list of 20+ companies and then shortlisted 5 companies who matched with the thesis. Indiabiz team started to arrange management calls with the qualified businesses. Karen and Larry arranged their visit to India to meet these companies and evaluate the business proposition. Indiabiz team helped them throughout the journey of completion of the contract with one of those companies. In between Indiabiz team performed many tasks for them like; standardizing the data from those companies, support in the evaluation, negotiating, structuring, finding due-diligence experts, lawyers, helping them with the banking and in deal negotiation. The team was clear about setting expectations and helped throughout the journey as they went further and further down the acquisition process.

We got to one point (six weeks I think in negotiations) as we’re getting ready to close we were actually at an impasse. I had called Karen said I’m packing up I’m going home. We’re going to rethink India strategy and were going to consider number two option.”

The team also worked with the (sell side) promoter to actually understand the objective. The valuation exercise, the communication between both, the sides and the dedication made it possible to influence both sides to get them to a mutual place where they could close the acquisition process.

Karen & Larry’s Experience with IndiaBiz

Why Deals Fall Apart?

If it is important to you, you will find a way. If not, you will find an excuse.

Whether you are a business buyer, investor or a business owner, you must be wondering, what are the conditions that can make or break a deal. We have worked closely with thousands of users over the last few years in buying, selling, growing and fund-raising for businesses, and one of the most common questions we get asked is: What can make or break a deal? In this article, we bring to you our exclusive insights on keeping a deal smooth and hassle-free. Over the last few years, we have helped thousands of users on our platform to discover the best deals to buy, sell, grow and fund businesses, and this is a common question we get asked. While there are no hard-and-fast rules about stopping a deal from collapsing, there are, however, a few important principles that both parties in a deal can follow which can make or break a deal.

  1. Transparency and Honesty: This is a no-brainer. Would you ever like to enter into any transaction with someone whose ethics, integrity and morals are in question? Most likely not, and the same holds for the other party. The best deals are those in which expectation settings are clear right from the beginning. This is not to say that you must lay bare all the sensitive information about your business on the very first day. You can take your time and qualify buyers as per their seriousness and interest in your business before giving out critical information. However, do not lie, misrepresent or miscommunicate, and encourage the other party to do the same.
  2. Trust and Confidence: Sometimes, it is not enough to be just honest yourself. You have to give a chance to the other party to demonstrate honesty and commitment to you. We have seen a number of deals fall apart where either one or both the parties refused to walk the last mile with each other despite long discussions and no visible breach of honesty. There are a number of legal tools available to enforce understanding between two parties even before the deal actually takes place. But, in the end, these are just tools – you will have to cultivate the trust by yourself. Seasoned deal moderators and mediators often come handy in developing rapport between parties and getting the deal through.
  3. Realistic Negotiations: An important thing to remember is that, negotiations on aspects like valuation, payment terms, rights and obligations, etc. are meant to bring out a fair deal structure, and not to solely serve the interests of any one party. For example, a common mistake that business owners make is to overvalue their business. Get your business valued by an independent valuation expert to avoid unnecessary conflict. Have a seasoned negotiator on-board to help you get the best out of the deal without undercutting the other party.
  4. Seamless Communication: A deal is never just a piece of paper. It happens between two people, or two parties, and to bring the deal to closure through a long journey, it is important that communication between them is regular, well-timed, and two-way. Take out time to listen to the other party and voice your own concerns. Rope in your consultant when needed, but stay connected to the deal at its core by getting regular updates. Technology has made life easier today, but it won’t harm to meet each other once in a while and iron the kinks out. It is also important that you talk about things outside the deal such as your work experience and professional background, future plans, and so on.

So, what are you waiting for? Discover the perfect business opportunity that matches your preferences and get the deal of your dreams with Indiabizforsale.com, the most preferred network to buy, sell, fund and grow businesses in India. To know more about who we are and how we can help you, write to us at [email protected].

How to Identify a Potential Buyer and Go About the Deal-Making Process

As a small business owner, it can be challenging and confusing to understand how to sell your business, especially if this is your first time. Over the last few years, we have supported thousands of business owners in the journey of selling their business, and have found that one of the most common questions that business sellers have is this – how to identify potential buyers for their businesses?

In this article, we bring to you the key insights we have gained through our platform on the essential aspects to be kept in mind when identifying a potential buyer for your business, and how to go about the overall deal-making process.

Identifying Your Target Buyers – Streamline Your Efforts

When it comes to buyers, we have seen many sellers waste their efforts by reaching out to the wrong target audience. It is advisable to start your buyer-identification process by profiling the ideal buyers from your business. For example, are you looking for individual buyers, institutional buyers or both? Are you only looking for buyers within your industry or are there related / complementary industries you are willing to explore? Are you looking for buyers in a certain location? This will help you streamline your outreach campaigns (online and / or offline) and reach out to the maximum possible buyers in the shortest possible time.

Being Discoverable – Critical to Reaching Your Target Buyers

Sellers often spend time and money putting advertisements anywhere and everywhere. Focus on the being discoverable – identify options that give the maximum visibility for your sale proposition, but make sure your confidentiality is not compromised. Dedicated technology platforms like IndiaBizForSale are excellent for making your sale proposition searchable and discoverable by potential buyers. No matter where you advertise, make sure you create an attractive business brief to catch the buyers’ attention.

Handling Buyer Inquiries and Qualifying Prospective Buyers – Do’s and Don’ts

The real process of identifying a potential buyer for your business actually begins when you start receiving inquiries (interests) from buyers. Try to ascertain how serious the buyer is – Does he respond to your communication on a timely basis? Does he ask the relevant questions about you and your business? Is he ready to sign a Non-Disclosure Agreement (NDA) before you share any critical or sensitive information with him? Does he understand the deal-making process? Classify buyers by their genuineness and credibility and share detailed information only with the buyers who are qualified according to the assessment criteria set by you.

Handling Due Diligence and Getting Your Business Valuation Right

Once you and your buyer have established trust between yourselves, it is important to understand the process of Due Diligence. The buyer will usually have a team of professionals who will investigate your business extensively. It is important that you prepare for this stage right from the day when you decide to sell your business. Make sure your books of accounts, business incorporation documents, title and ownership documents, process documents and policy documents are all in place. Having said that, Due Diligence is so much more than just documents – a seasoned buyer is likely to analyse your business’s reputation, position in the market, customer satisfaction, and technology aspects, as applicable. For valuing your business, it is always advisable to take help from an experienced, expert valuer with credible track record. This will help in negotiating with the buyer and also give you a realistic expectation about the asking price of your business.

Negotiations and Deal Structuring – Get the Best from the Deal

At this stage, it is important to have a seasoned deal negotiator on board who can negotiate on aspects such as transaction modes (cash vs non-cash), payment timelines, title transfer timeline, distribution of part-payments (if any), and your post-sale involvement in the business. Apart from this, you will also need to discuss legal and compliance implications, such as tax liabilities, licenses, and so on.

Closing the Deal and Managing Transition

The final leg of the deal-making process is closing the deal – i.e. receive your due payment from the buyer and give the ownership of your business to the buyer through transfer of title. While it is usually a simple process, sometimes there are minor hiccups along the way to watch out for. For example, we have seen a few deals where last-minute conflicts have arisen due to the buyer / seller not fulfilling certain pre-defined terms and conditions. We usually mediate in such situations on request, and help the buyer and the seller reach a consensus through discussion.

Selling your business doesn’t necessarily need to be an overwhelming experience. With our wide network of thousands of buyers, experience, and expertise, you will be in a better position to pursue a deal successfully. To know more about what we do and how we can help you, visit IndiaBizforSale.com.