This article was contributed by Marc Maurer, a portfolio manager at Volaris Group.
Back in September, Volaris hosted Quadrants, a massive peer-learning event where 600 of our companies’ leaders came together to make connections and share best practices. While I was there, I tasked myself with a mission: Ask 20 of our most recently acquired businesses why their shareholders sold to Volaris.
Though the answers were unique to each individual business, there were a few common themes:
* Business leaders polled represent 20 companies acquired by Volaris Group from January – August 2019.
** Several leaders provided multiple answers.
41% of leaders that were surveyed sold to Volaris for reasons related to our buy-and-hold forever acquisition philosophy.
One of the reasons the philosophy appeals to business owners is that it assures the business’ long-term stability. Other reasons related to our philosophy included protecting the legacy of exiting shareholders, and the desire to join an organization that would invest in their company for the long-term.
Advantage 360 is a Comms & Media software company which joined Volaris in May 2019. Group leader, Tony Garcia, explained that they won a new client (Tonga Communications Corporation) only 2 weeks after they were acquired by Volaris. A key factor in Tonga Communication’s decision was that Advantage 360’s new owner could assure the business’ sustainability.
33% of leaders that were surveyed indicated they sold to Volaris for reasons related to organic and acquired growth.
One of the ways we help our companies grow is by offering support for international expansion.
MDS Global, a software provider to telecommunications service providers, wanted to tap into Volaris’ international customer base in the Comms & Media space. With Volaris’ support, the company will be able to scale more rapidly beyond its historical base in the UK and Europe.
Autonomy and Leadership Development
20% of leaders that were surveyed said that they sold to Volaris for reasons related to autonomy or professional growth.
Through a decentralized business model Volaris allows remaining shareholders to continue running the business quite independently. This is a strong differentiator versus private equity and strategic buyers which typically take control over key decision making.
Akuiteo is a French company which provides ERP solutions for professional services. The company’s CEO, Jean-Christophe Llinas, had this to say about Volaris’ approach: “We believe that Volaris is strongly committed to our long-term success. In the group's history, no acquired company has been sold. Volaris is dedicated to the development of companies and invests in the people who contribute to their success. Akuiteo is and will continue to be managed by the same management team, independently.”
A 4th Reason for Selling to Volaris
Through my discussions I heard many times that the respondents liked, and trusted, the people they interacted with during the M&A process. These personal connections often greatly influenced their decision making.
For example, Kenshi Banderas, CEO of Fisa Group, a banking software company based in Ecuador remarked, “I have to say that the people from Volaris involved in the process have been very honest, direct, and transparent. This was very important for me as the one leading the company going forward.”
Choosing the Right Acquirer for You
Each private equity, strategic, and alternative acquirer will be able to offer you a different kind of future. Taking the time to ask different acquirers questions can help you understand how they compare. Ask questions regarding their acquisition philosophy, long-term outlook, plans for growth, and opportunities for leaders like you. This article can help get you started.