M&A Advice From A Software CEO With 5 Acquisitions In 18 Months

Fred Voccola CEO Kaseya, a customer first team working to bring solutions that make the lives of IT leaders around the globe easier and more predictable. Kaseya has more than 1,000 employees worldwide and operates in the managed services, healthcare, financial services, IT, and education verticals.

What follows is a snippet of the interview with Voccola focusing on his role in Kaseya’s acquiring five companies within an 18-month span (Unitrends, Spanning Cloud Apps, RapidFire Tools, IT Glue, and ID Agent).

Q: Kaseya has been quite active within the M&A world. What advice do you have for ensuring employees from an acquired company feel comfortable with the mission and vision at Kaseya?

Voccola: First and foremost is our strategy. There has to be a good strategy in place when you acquire a company in order for the acquired company to feel comfortable in the onboarding.

The second most critical piece of advice is over-communication. Communication and human interaction are the single most important thing in a software company. Everyone has to understand not only what they're supposed to do on a daily basis, but also how to do it and why they do it. This all boils down to a few questions: Why does this acquisition makes sense? Why does it make sense for each individual position, and why does their individual role help the cause? How are they contributing? We find success in always over-communicating that message.

Finally, I do think a lot of companies make mistakes in rushing integration. Integration has to meet whatever timeline is set in the strategy at Kaseya. We integrate the technology and the products very rapidly (so our customers receive the benefit of the acquisition), but that is not to say it all has to happen in one day. From an operational standpoint, change is something where people need to be brought along. In terms of organizational structures (i.e. titles, moving people's job functions, etc.), these changes are gradual. We are very deliberate in these plans, and we over-communicate everywhere to everyone along the way.

Q: On the other side of the M&A fence, you have played key roles at tech companies that have had successful exits. What is the most important lesson you’ve learned about the process of getting a company ready to sell?

Voccola: A lot of people look at an exit as an endgame, which isn’t the right outlook. If a company goes public, it doesn't go away. While some investors have the opportunity to get liquidity and may get an exit, this is not an exit for the company — the company and the customers, most importantly, are still fully functioning and operating as of the very next day.

That said, I look at “getting ready for an exit” as an inaccurate term. If a company were to come to me and ask, “what's your exit strategy?” I would run for the hills! We don’t build our company that way.

To prepare for an exit, I would advise to not think of the word “exit.” Instead, think of ways you might build value that's sustainable. How can you make yourself indispensable to your customer? Think about building a sustainable business and making it the most attractive business in the world. This is what will make people come knocking at your door wanting to buy you or wanting to take you to the public markets.

On a tactical level, I always suggest that you want your company to be exit-ready. What I mean by that is the financial infrastructure of the business, the legal infrastructure of the business, the documentation, the processes and procedures should be so diligent that you are ready to file when the time comes. The business isn't ending, but this evolution can be disruptive. I always encourage other software companies to make sure they're exit-ready so that if a process starts, it doesn't disrupt the entire company. If they’re not prepared, the long-term effects of that could potentially be detrimental to employees, shareholders, and customers.