PR to attRact acquiReRsThe role of PR in tech exits
“Marketing and communications is often undervalued by
high growth companies. The profile and reputation of a
company plays an enormous role in securing exit. Whilst
creating ‘noise’ in the market can certainly get a company
noticed, it may not deliver on strategic objectives and
maximise company value. Only campaigns that take into
account how acquirers identify target companies and which
assets impact valuation will support the right kind of exit.”
Dan Walters, Associate at Knight Ventures, a specialist
provider of capital to small, established and growing
companies operating in technology, media and telecoms
“Many things contribute to a successful exit, but strong,
supportive PR and communications makes the difference
between a good exit and a great exit. Ahead of our $85
million acquisition, CCgroup’s PR campaign put Arieso’s
superior product, achievements and leadership in the
spotlight. Our acquirer was impressed not just by the
strength of our company and its proposition, but by the
awareness, endorsement and support Arieso enjoyed
amongst key media, analyst, consultant, customer and
investor audiences. CCgroup played an important role in
making sure we achieved a great exit.”
Shirin Dehghan, Chief Executive Officer at Arieso,
a CCgroup client acquired by JDSU in 2013
“As WDS positioned itself for exit, it was very important
that our marketing and communications programmes met
the needs of prospects, customers and potential acquirers.
Working with CCgroup, we executed a programme that
demonstrated WDS’ unique vision, capabilities, team and
success. We simultaneously generated quality sales leads,
built the value of our company and attracted the attention
of a strategic acquirer.”
Tim Deluca-Smith, VP of Marketing at WDS,
a CCgroup client acquired by Xerox in 2012
Introduction
Most tech companies do not attract attention from
acquirers by accident. They have to work long
and hard to generate awareness, tempt acquirer
interest, spark desire and, ultimately, win the exit
they are targeting.
There are many pieces to the puzzle – people, IP,
fiscal strength – but this short paper focuses on the
role of marketing and PR in helping tech companies
exit.
It all starts with transparency and clear goal-setting.
Many executive teams do not want to unsettle
their workforce by outlining ‘exit’ as a corporate
goal. That can mean that their own senior PR
and marketing people do not appreciate the true
objective of their own campaigns – a dangerous and
counter-productive practice!
So please, make sure your PR and marketing team understands your corporate goals. That way, everything they do will intentionally help, rather than inadvertently hinder, your acquisition campaign.
In the last three years, CCgroup has supported ten tech companies that have
achieved successful exits. In this paper, as a result of its experience and research,
the team outlines:
how potential acquirers identify target companies
which assets of a company impact valuation
how to articulate and emphasise these assets to maximise company value
Traditional Research – when an acquirer has identified a specific need, individuals within the organisation or the acquirer’s specialist acquisition partner will begin with basic desk research. Media coverage, publicly available research, specialist blogs, trade associations and conference proceedings are key information resources.
Analysts and Consultants – acquirers often turn to market experts to produce target long and shortlists. Industry analysts and consultants – especially the more niche organisations like Analysys Mason and Northstream in mobile – do a lot of acquisition targeting and due diligence work, though this is not widely understood. These groups will use a variety of information resources (as listed above), but combine this with deep market knowledge, private sources and primary research.
Networks and Networking – acquirers will often use their own informal networks to research targets, and also attend events such as the European Leaders Hot Topics series at which business leaders
and investors mix and discuss relevant industry topics.
How do potential acquirers identify andinvestigate target companies?
There are several different ways in which acquirers learn about potential targets. While not an exhaustive list, here are some of the most consistent channels and routes:
technology companies
What assets impact company attractiveness and valuation?
1. VIsIoN
Whether an acquisition is being driven by the need to scale or diversify, the vision of the target company is critical. A company’s vision drives the direction of the business, the types of customers it has, the development of products and so on. Having a clear vision for the company and the market it operates in, and communicating it effectively, demonstrates that a company is a good long term bet, worthy of close attention.
2. sTRoNg IP
If vision is a ‘soft’ asset, intellectual property is quite the opposite. An acquirer will be looking for defensible value in a major acquisition. How well are a target company’s technologies, products or processes protected from competitive forces? Does a company have a sustainable core competence or a transitory competitive advantage? For strong valuations, IP is very important.
3. ExPERIENCEd lEAdERshIP TEAm
According to Digital Works Consulting, a management consultancy specialising in helping tech companies seeking investment and exit,
acquirers will often be drawn to companies with a well-credentialed leadership team that can be trusted and respected. Executives with track records in innovation, disruptive technologies, profitable businesses and strong delivery will always inspire confidence.
4. A RobusT sAlEs PIPElINE
As well as strong IP and personnel, companies on the acquisition trail will often also want to buy quality contracts. They need to be assured of a track record of quality new business wins and extensions to existing contracts. Such evidence will also show a potential acquirer that there is substance behind the vision and that there is an established market interest in the product or service.
5. A sTRoNg mARkETINg fuNCTIoN
Seeing plenty of outbound marketing activity reassures an investor that the company in question is serious about lead generation, revenue and profile and has effective mechanisms in place. In short, if marketing is going well, it will take less time for investors to start seeing a return.
How do you articulate and emphasise these assets to acquisition audiences?
1. bE ClEAR ANd TARgETEd wITh youR mEssAgINg
In order to best demonstrate you have the assets that
investors want to see (as above), you need to make sure that
the manner in which you describe yourself is telling the right
story. Does the way in which you describe yourself illustrate
your vision, the strength of your IP and senior team and the
headway you have already made in your market?
The messaging needs to carefully strike a balance between
genuine market differentiation and dangerous over-hype.
These descriptions will be used in presentations to potential
investors and prospects, on your website and collateral,
with analysts and the media. So they have to be concise,
comprehensible and fully supported by proof points such as
patents, customers or industry awards. And most importantly,
everyone in the organisation must be aware of the new
messaging and use the same terminology and evidence every
time they are dealing with external audiences.
2. hAVE A sTRoNg VIsIoN foR youR mARkET
Do you have a new view on the market? Have you researched or analysed
an aspect of the market that needs to be understood better? Why is
your proposition superior to your closest competitors? What scale of
customers or industry specialism do you have that no one else does?
Much of this introspection will be covered as the basis of your
messaging, but you need to also present a clear raison d’etre – as
forcefully as you dare – to the market. You can have the most powerful
messaging and be an entirely unique company, but if you don’t have
anything different to say about the market, then you have no way of
attracting and maintaining attention.
Your company exists because you have a vision of where the marketis heading and you believe you have a key role to play in it.
So articulate it. By doing so, you are explaining why you – and not companies like you – are an attractive acquisition target.
be controversial (but don’t scaremonger for the sake of it)be opinionated (without picking fights needlessly) Always be available to the press (without hounding them)
3. RECogNITIoN ANd CREdIbIlITy
Journalists and analysts are important
independent third party endorsers for acquirers,
making press coverage and analyst mentions vital.
In addition, seek out appropriate award schemes
to enter and events and trade shows to speak at.
And make sure that you build profile for as many
of your senior team as possible - investors want
to see a broad group of credentialed, innovative
individuals leading the company.
Essentially, the more quality platforms from which
you are communicating your messages - especially
with the silent endorsement of publications,
analyst houses and industry bodies –
the more opportunities you are creating for a
potential acquirer to believe in the credentials
of your company and make contact.
Most of all, collate this industry attention in a single place in your website. Impress visitors with the volume and quality of media coverage, award wins and analyst recognition you have achieved. It reinforces your place in the market and the momentum that you are gathering, and therefore how timely an investment or acquisition could be.
4. CoNsIsTENCy ANd VARIETy
Investors are wary of “flash in the pan” companies. They have seen hundreds of companies who purport to be the next big thing, and many have disappeared from view over time with promises left unfulfilled.
So when a company spends six months targeting every industry publication, is in every analyst report and on every podium available, but then goes quiet, investors will suspect the worst. Even if they then return after another six months, they have already earned the reputation of being unstable. This might be hugely unfair and the silence may in fact be perfectly justified, but the perception will remain.
Therefore, it is vital for a company to maintain steady levels of publicity. And it must be a variety of activities that delivers this visibility – hard news (wins, appointments, patents won), soft news (thought leadership, opinion, milestones), awards wins, speaker positions etc.
Doing this well
What makes CCgroup qualified to advise on PR for acquisition? Over the last three years (2010 to 2013),
CCgroup has supported ten clients who have achieved successful exits. The accumulated level of investment
runs into billions of dollars, and our client acquisition and investment timeline reads as follows:
Aug 2010 – IMImobile acquires WIN Plc.
Jan 2011 – The Carlyle Group acquires Syniverse Technologies
May 2011 – Radisys acquires Continuous Computing
Jun 2011 – Visa acquires Fundamo
May 2012 – NetCracker acquires Convergys
Jul 2012 – Xerox acquires WDS
Feb 2013 – Opera acquires Skyfire
Mar 2013 – JDSU acquires Arieso
Oct 2013 – Marlin Equity Partners acquires Tellabs
Dec 2013 – TEOCO Corporation acquires AIRCOM International
As Aletha Ling, Chief Operating Officer at Fundamo, a Visa company, said, “Choosing to work with CCgroup was an important decision in achieving our company objectives. Not only did CCgroup’s strategy help us develop our sales pipeline, it helped build the value of Fundamo and attract the interest of international investors.”
A full case study on the Fundamo campaign follows on the next page...
ChAllENgE:
In 2008 Fundamo was a forerunner in mobile
financial services, but unknown to many in the
international mobile or banking industries. And
even fewer understood its value.
Together, CCgroup and Fundamo had to boost short
term sales across mobile and banking industries and
maximise Fundamo’s long term value for future exit.
CREATIVE:
With few obvious examples of mobile money
success – plus concerns regarding the profitability of
Vodafone’s M-PESA service – prospects and investors
remained wary.
We had to prove Fundamo had the technological
expertise, the business experience and the vision to
succeed. We had to promote the achievements and
potential of the entire mobile money community.
We had to become spokespeople for the industry.
After developing strong messaging, we launched
a series of highly successful programmes: joint
media activity with customers; thought leadership
campaigns for conferences, awards and influencer
tours; and countering misinformed stories on
behalf of the industry.
CoNsEquENCE:
For three years, Fundamo executives spoke at every
major relevant conference. We achieved blanket
business and trade media coverage, outgunning
our competitors around the world. Industry
analysts profiled us, addressing misconceptions
about industry value based on Fundamo’s
implementations.
PR helped develop the immediate sales pipeline and shone a light on Fundamo’s vision, leadership, IP ownership and significant business achievements. In June 2011, Fundamo was acquired by Visa for US$110 million. PR was called out as a major contributor to the valuation.
Positioning Fundamo for exit
Contact
If you would like CCgroup’s assistance in helping to you position your organisation for exit, please contact
us. We insist on signing non-disclosure agreements before commencing serious discussions:
About CCgroupCCgroup is a B2B technology PR agency based in London, specialising in mobile & telecoms, fintech,
cleantech and business technology. Through its sister brand, Escapade PR, the company is also active in
consumer lifestyle and technology public relations.
CCgroup’s B2B PR campaigns are entirely commercially focused. The company uses messaging, insightful
content and media, analyst and digital channels to drive awareness, generate sales leads, build value and,
if required, position for exit.
CCgroup was founded in the late 1980’s and has offices in London and Reading.
It is a part of the GlobalCom PR Network.
For more details, visit: www.ccgrouppr.com | www.gcpr.net
Richard Fogg
Managing Director
+44 7887 845 236
www.ccgrouppr.com
LinkedIn: https://www.linkedin.com/company/cc-group
Google+: https://plus.google.com/+Ccgrouppr
Twitter: https://twitter.com/ccgroup
Paul Nolan
Director
+44 7717 723 440
www.ccgrouppr.com