Topic of the Quarter
An Ode to the late, great Charlie Munger
“One advantage of our publicly-traded segment is that – episodically – it becomes easy to buy pieces of wonderful businesses at wonderful prices. It’s crucial to understand that stocks often trade at truly foolish prices, both high and low…
[Private businesses] sometimes command ridiculously higher prices than justified but are almost never available at bargain valuations. Unless under duress, the owner of a controlled business gives no thought to selling at a panic-type valuation.”
– Charlie in the Berkshire Hathaway Annual Report 2022
It may seem self-evident that Charlie Munger’s wisdom also extends to private founder-driven companies. For those who grew their own businesses in fiscally-prudent ways, they can choose when to achieve liquidity irrespective of market turmoil. For those who did not, we do believe there are ways to negotiate from a position of strength and realize full value.
While we don’t necessarily agree that this dynamic is universal, it speaks to the value of utilizing the services of an investment banker. Founders who have built their businesses from the ground up often feel pressured to accept lower valuations from large potential buyers or PE funds, losing sight of their position of leverage.
We believe that one role a banker serves is to provide an objective perspective on valuation and ensure founders understand the full value of their enterprise. Done right, an advisor thoroughly explores all dimensions of value to a potential counterparty, extending beyond just standalone financial considerations.
Over his prolific career, Charlie provided extensive wisdom and perspective. As entrepreneurs who have sacrificed deeply to build your companies, Charlie would urge you to remember: know your worth!
Founder-Led / Bootstrapped Deal Activity Snapshot
Q4 2023: Notable U.S. based M&A deals in Tech
Autonomy/IoT
12/8 – Ghost Robotics, manufacturer of combat and industrial deployment robots, acquired by LIG for $240M. Link
10/17 – Sirius Automation, laboratory robotic systems, acquired by Addtronics via Kaho Partners. Link
Big Data & Machine Learning
12/1 – SpinSys, data management SaaS and systems integration, acquired by Dine Development. Link
11/16 – Purplegrids, an AI platform driven by CX, acquired by Mondee [NAS: MOND]. Link
11/15 – Outside Analytics, geospatial data analytics software, acquired by SMX via OceanSound Partners. Link
Data Center
11/8 – ZPE Systems, data center hyperautomation systems, acquired by Legrand. Link (Represented by La Honda Advisors)
Software
11/28 – Orion, workforce management software, acquired by Fieldware via Taubman Capital. Link
11/14 – Elite EXTRA, last-mile delivery and logistics management SaaS, acquired by Epicor Software. Link
11/6 – Verve Industrial Protection, industrial control systems and cybersecurity software, acquired by Rockwell Automation. Link
10/30 – Follow Up Boss, real estate sales management platform, acquired by Zillow Group for $500M. Link
10/12 – EVPassport, electric vehicle charging software and infrastructure, acquired by Northleaf Capital Partners for $200M. Link
Professional Services
12/1 – SADA Systems, top provider of multi-cloud systems, acquired by Insight Enterprises for $410M. Link
11/28 – Incapsulate, technology and Salesforce consulting, acquired by Accenture. Link
11/7 – TNS Communications, technology advisory and software services, acquired by Amplix via Gemstone Capital. Link
10/30 – Regency Technologies, IT asset disposition services, acquired by Iron Mountain for $200M. Link
10/3 – Beyond Technologies, system integration and business process optimization services, acquired by Syntax Systems via Novacap. Link
10/3 – Agilia Solutions, IT consulting services, acquired by Cofomo via NovaCap. Link
10/2 – SafeNet Consulting, IT consulting services, acquired by Eliassen Group via Stone Point Capital. Link
10/2 – Resolvit, tech and management consulting services, acquired by Aditi Consulting via Fiera Comox Partners. Link
eCommerce
12/19 – OneStone Solutions, e-commerce monitoring and management software and services, acquired by The Bluebird Group via H.I.G. Capital. Link
10/19 – Fullfill Engine, e-commerce and supply chain software, acquired by Stahls. Link
