Case StudyWinSales,
Inc.
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The
Situation WinSales, Inc. was a leading provider of software and services to help automate the process of client communication. The company's flagship products, WinSales and Client/Vision, allow users to effectively manage and automate a company's entire sales, marketing and customer service programs. The company employed 25 people and was headquartered in Bellevue, Washington. The market for sales automation software was beginning to become saturated. Competition was becoming more intense and the Company was finding it increasingly difficult to capture market share. WinSales' founder thought that the time was right to sell the company. The Response We undertook a very comprehensive search for companies that were in complementary market sectors that did not have sales management software, but who could sell this type of software to their existing customer base. After several months, we had identified a handful of good prospective buyers. One firm was more interested than the other candidates -- Magic Solutions International Inc. Magic Solutions was based in Paramus, New Jersey had sales of $60 million. The Solution The negotiations were lengthy and there were a few hiccups along the way. We persevered in our negotiating efforts and finally came to agreement on price and terms. We closed the deal just in time as the sales management sector became saturated. The price included part cash and part stock. The seller was very please with the outcome of the transaction since the price we negotiated was significantly higher than he had expected. Dénouement Approximately seven months later, Magic Solutions was acquired by Network Associates, Inc (now known as McAfee) for $110M in cash. Since the founder of WinSales had received stock in Magic Solutions as part of the transaction, he experienced an additional gain when Magic was sold to McAfee. © Copyright 2009 T.V. Metz & Co., LLC |
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