Softlink

September 10, 2019
  • Headquarters: Eight Mile Plains, Australia
  • Acquisition Date: September 2013
  • Vertical Market: Library Management
  • www.softlinkint.com

Background

Softlink International is a multi-national library management software business. Its solutions enable its customers to manage the cataloguing and lending processes of both digital and physical assets. Softlink’s customers include primary and secondary schools, professional firms, and public libraries.

As an unlisted public company, Softlink had over 48 shareholders to consider when planning its sale. The majority of the shares were owned by the organization’s founders who no longer participated in the day-to-day management of the business.

The fact that Volaris Group does not sell its portfolio businesses assured the shareholders that Softlink's future was in sound hands.

— Nathan Godfrey, Managing Director, Softlink

The Decision to Sell

Over the years, Softlink had been approached several times by interested buyers. So, when Softlink started to evaluate potential acquirers, there were a number of options on the table.

In assessing the prospective buyers, Nathan Godfrey, Softlink’s current Managing Director, and the Management Team wanted to ensure that the goals of Softlink’s shareholders would be met. Specifically, they accounted for the founders’ concern that a buyer would “slash and burn” the company, as many of the potential acquirers were companies in Softlink’s industry or adjacent industries. The Management Team and shareholders were apprehensive that Softlink would lose its identity if it were folded into a larger, competing organization as part of a strategic acquisition.

Similarly, the senior management at Softlink wanted to ensure long-term sustainability and did not want the company to be saddled with debt, as would be the case with private equity investors. Private equity firms tend to have an interest in short-term returns to maximize the value of the business, and Godfrey did not want an acquirer that would re-sell the company.

In contrast, Volaris Group’s acquisition philosophy is to invest in good businesses while leaving them decentralized and independent. A representative from Volaris Group’ mergers and acquisitions team had previously reached out to discuss a potential sale. Softlink’s management was impressed by the level of insight that Volaris Group had into their industry. It was evident that the team at Volaris Group had done their research and had a point of view regarding the direction it would take the company in if acquired.

Staff and managers appreciate the advantages of being part of the Volaris Group and the opportunities that presents for them.

— Nathan Godfrey, Managing Director, Softlink

Post-Acquisition Success

Since the deal closed, very little has changed for customers and employees at Softlink. In spite of this, the performance of the company has improved substantially. As part of a larger organization, Softlink now has access to shared best practices and benefits from the knowledge accumulated from hundreds of acquisitions.

Volaris Group has been able to provide guidance in terms of applying financial discipline and metrics to the business. These benchmarks have allowed Softlink to be more efficient in its day-to-day operations, which would not have been otherwise available to them as a small, stand-alone company.

As Softlink continues to grow, Godfrey plans to implement more of Volaris Group’s best practices. Specifically, he is excited to start implementing some of the digital and content marketing strategies employed at other business units to generate sales and nurture leads.

Employees are not only excited about the future of Softlink as a company, but also for the opportunities to advance and grow professionally within the Volaris Group family. Godfrey and his management team have been able to see how Volaris Group’ rapid growth creates development opportunities for the future.

In the end, Volaris Group was the right buyer for Softlink. Being a part of a larger organization, while continuing to operate and set strategy independently, has helped Softlink grow and continue to generate new business.

 

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