Acquisitions are a key ingredient helping Mike Gold build communications technology company Intermedia.
Since 2011, Intermedia has made four acquisitions: web and video conferencing company AnyMeeting (September 2017), software provider SaaSID (September 2013), cloud phone systems provider AccessLine (January 2013) and IT services provider Zlago, where Gold was previously CEO (June 2011).
And just eight months ago, Intermedia itself was acquired by private equity firm Madison Dearborn Partners. Prices of the transactions are not being disclosed. But under the arrangement with Madison Dearborn, Intermedia remains a standalone company and Gold its CEO.
Along with building products in-house and licensing deals, Gold continues to look for more companies to add to Intermedia, which is a cloud applications provider supplying small and midsized businesses the applications to help run their businesses, from voice, email, file sharing, backup, security, and others.
With annualized revenue of $220 million, the company is growing internally and has tripled in size in five years. But Gold still likes the thrill of the chase when it comes to looking for companies to add to Intermedia’s stable.
It’s “fun,” he told FierceCEO, “learning about different business approaches, different technologies and the deal making.”
There is “a full time team looking for and evaluating acquisitions,” Gold said.
Lessons he has learned :
- When it’s the right time to pursue an acquisition: Gold is always looking for acquisitions that accelerate growth, strengthen the product and add more sales channels, but says just because a company might be a good fit, doesn’t always mean it is the right time
- What can go wrong with an acquisition: In his experience, if the leadership team that’s being acquired doesn’t align with your company culture and vision, or you don’t see how the company will integrate into yours from the product itself down to how you sell it, it isn’t worth pursuing
- Early warning signs to walk away: Make sure that you know how your potential acquisition target runs their business. If you are focused on profits but they have never been profitable, that’s a sign that it might not work long-term.
- Find the right fit: Make sure you find the right product fit and that the seller’s expectation of value is within the buyer’s range
Gold said he has had a couple of kinks, including “bringing in a company whose CEO wasn’t a culture fit for us,” and questioning, at the time, whether Intermedia overpaid for an acquisition.
But, he added, the pros have certainly outweighed the cons.