Learn more Got it! SELL YOUR BUSINESS Own a software business? You’ll want to read this More… Do you own a software business? Well, that’s interesting. So do we. Are you thinking of selling? Oh wow. We buy software businesses! What are the chances? I know right. Maybe we could be a good investor. What are we looking for? Software businesses to become part of our platform. Is this you? You operate a software business With an established client base Selling business-to-business With annual revenues above £250k And are profitable If so, we’re interested. Regardless of where you are in your journey. We’ll work with businesses at various stages. For example, you might need support to reach the next level. To free your non-productive time. Let someone else take care of admin, so you can focus on doing what you do best. Or, your business might be mature. Growing slowly. That’s ok. Maybe your current shareholders are looking for an exit. Perhaps they wanted a galloping unicorn and you’re managing a steady trot. That’s fine with us. Perhaps you want to retire. Need someone to look after your client base? We could give them a new home. Whatever your individual circumstances are, we can be flexible. Software is our blood We’ve been around for a couple of decades. As our market started to change, we’ve changed with it. We’ve built software our entire life. It runs our business and we licence it around the world. Now we’re looking for businesses like yours, to roll-in to Grafenia plc. Maybe we’ve found a way that works for us both. A way that means you can achieve the outcome you want. And write a new chapter in your story. Peter Gunning CEO Grafenia plc Who the plc are we? It’s possible you’ve heard of Grafenia. It’s also possible you haven’t. You might know our most famous brand, printing.com. We’ve been in the print industry since the 90’s in one shape or another. You might be a customer (well, thank you). Or have cursed us as a fierce competitor. You might even be a shareholder (thanks once again). For nearly two decades, we’ve been a public company, listed on the London Stock Exchange (GRA). Living life in public has its challenges, but it also comes with many advantages. One of those is access to capital, and patient shareholders. As our industry has changed, we’ve changed with it. We’ve launched new brands over the years, to adapt to what clients want. One of those is Nettl. You’ve spelt that wrong? Haha good one. Dropped an ‘e’, mate. Heard it before, mate. Don’t get stung. Honestly, these never get old. In our company-owned stores, we had seen first-hand how client behaviour was changing. How our market was converging. Printers selling signs. Web designers selling print. Sign businesses selling websites. So in 2014, we launched Nettl. It’s now the UK’s largest network of neighbourhood web, print, sign and design studios. We service thousands of clients through over 230 locations sprinkled around the globe. You’ll find Nettl studios in America, Australia, Belgium, England, France, Ireland, Netherlands, New Zealand, Scotland and Wales. 000 Nettl locations operating in 10 countries What’s this got to do with you? We licence software to graphics businesses. They use our systems to do more for their clients. Studios sell print, display and signage. Our workflow tools connect end clients with studios, and studios with production. As well as physical marketing, studios design fancy websites with online bookings and sophisticated ecommerce sites. We help those sites grow with digital marketing and we optimise them for search engines. Our software makes a design studio more productive. Our end customers are businesses from all over the country. In every sector. From one-woman-bands to multi-national, mega-corporations. We help them win customers. We bring people to their events. Diners to their tables. Buyers to their stores. With a little help from our software. And so now it’s about you. Want to be part of this? We want to extend the range of businesses we help. We’re looking for more software businesses to become part of our platform. If you build software that’s well known in your niche, we’d like to talk. Maybe you’re the dominant player in a specialist area. Or maybe your software does something so weird and magnificently obscure that no-one would bother developing something similar. Ideally, you’ll have a broad client base. You won’t be reliant on a single client for more than a third of your revenue (or profit). You might have different reasons for thinking about selling. To exit. To grow. To retire. We could be the investor you’re looking for. Right, are you right? Where could I be located? Honestly that doesn’t matter. Change your Zoom background to be a fake beach or leave your shutters open, so we can see the actual sea. Doesn’t make any difference. One rule… no shirt, no skyping. Our leadership team is based in the UK, so we’re most familiar with acquiring British and Irish companies. As long as you can communicate in English, we can work with businesses from anywhere. We’re all very used to remote working. We won’t need you to relocate or start wearing flip-flops in an office. What happens to my brand? Your clients know your software. They know your name. It makes sense to keep the brand you’ve established. You won’t need to rebrand. You’ll continue to support your existing clients and acquire new ones the way you’ve always done. If your clients are SMEs, we might want to package your software for the tens of thousands of clients in our network. Or refer prospects to you. Or maybe not. If it makes sense, we’ll do it. If it doesn’t, we won’t. Do I need to change my stack? No. We’ve been around long enough to know how complex and time-consuming migrating to a new platform can be. You’ll keep your technology stack just as it is. Your codebase, your control. Unless of course, there’s a reason to change. It does make sense to combine our accounting and finance though. To relieve you of the essential, yet boring tasks, you probably do each month. Maybe you’ll want to migrate to our billing and payment collection platform. Maybe not. What will happen to my team? We’d expect you to continue to build, sell and support your software, with your existing developers and sales team. But maybe you’re planning a retirement and a gradual phase out. That could be over a few months, or over a few years. Let us know your preferences and we’ll do our best to accommodate them. One of the benefits of being part of a bigger business, is some back-office functions can be centralised. Finance, bookkeeping and auditing. And we can exchange ideas on marketing best practice, client acquisition metrics, pricing and retention strategies. What should my software actually do? We sell B2B, so we’re looking for software that businesses use. If you make Snipcat face filters, nice one, but not for us. Your software doesn’t need to be glamorous or dangerous. It probably isn’t bleeding edge. If you’re used to seeing people’s eyes glaze over when you describe it at parties, that’s fine by us. That’s our kind of software. We understand boring software can be the glue holding a business together. Keeping your clients using it, year after year. For us, that’s exciting. To be rooted in their operations. Understanding what they do. Helping them do things more productively. That’s right up our alley. How do you value my business? Ah! The million dollar question. We’re open and transparent about our valuation range. We don’t start with an insane sky-high offer, then chip away at the price. When we agree heads of terms, that’ll be the price we pay. Subject to due diligence, ofc. We pay 2-5x EBIT, adjusted for director’s costs. Why the range? Our valuation is lower for smaller deals and higher for larger businesses. That reflects the deal costs, which don’t tend to fluctuate. What if I made a loss this year? Hey, it’s understandable. Lots of factors worked against business over the past twelve months. You might have swung from a small profit to a small loss. We look for stable businesses, who’ve had consistent earnings or shown growth over the past four or five years. When we calculate our valuation, we look at the typical profits over the whole period. That means that blips and weird peaks can be normalised. We’ll just need to understand what needs to happen to return the business to profitability, but it ain’t a deal-breaker. How will a deal be structured? We’d acquire 100% of the share capital of your business. Your shareholders would sell their shares to Grafenia plc at the valuation we agree. You and your team would become part of the group, as employees. We think it’s important you’ve got skin in the game. So around half of the consideration will be paid by issuing shares in Grafenia plc. If we can grow together, there’s further upside potential for you. As our shares are publicly listed, your shareholding becomes liquid and allows for full or partial exit after a few years. The other half of the consideration would usually be paid in cash. When will I be able to exit? Maybe you weren’t thinking of an exit at all. You’ve been doing just fine yourself. That’s great. Perhaps we can do more together. Your energy, our support. Your leadership, our sales network. We need talent to help us deliver our goal of becoming the most famous network of sign, web and print studios in the world. You might have been dreaming of retiring to Ibiza soon. Or moving to the country and becoming an Alpaca farmer. You probably deserve that. Maybe the business can run without you. Super, off you trot. Maybe you need some time to pass on your responsibilities. How painful will this be? Clearly nobody was expecting a pandemic to shut down the whole economy for so long. Maybe it’s forced you to make changes to your business. Maybe it’s helped. One thing’s clear, being in business can be lonely at times. Especially when the world is changing around you. There is strength in being part of a bigger organisation. You might be used to working for yourself, calling all the shots. You probably don’t think of yourself as ‘corporate’. We’re a listed company, so you’d expect there are more rules we have to follow. However, we have patient investors. They favour investing for the long term – maybe 10, 20 or 30 years. It doesn’t have to be painful. Together we can be stronger and build something even better, together. What are we like to work with? So far we’ve brought nine businesses into the Grafenia Group. Some vendors left the business before acquisition. Some planned to stay for a year or two later. Most have remained in the business, in different roles to where they started. One left to start a Nettl store and farm alpacas. In some cases, opportunities have arisen for team members to cross family lines and work in different teams. Be candid with us about your personal circumstances and objectives. It’s best we know what you want to achieve, so we can work out how they fit with ours. What’s the next step? Let’s have a brief chat. Email letmein@grafenia.com and arrange a time. Just let us know your approximate revenue for last year and and share a link to your website. On the call, we’ll explain our vision and answer your questions. We’d like to hear about your history and hopefully our combined future. We can chat through the headlines and the finer details without any obligation on either side. If you need an NDA that’s no problem – just let us know beforehand. After the call, we’ll need your most up-to-date accounts and then we’ll take it from there. We’re an experienced, well-funded purchaser with a mandate to acquire businesses that fit our criteria and strategy. We can meet the needs of serious vendors. Are you in? Join the software circle Interested in sourcing businesses to become part of Grafenia? Join the Software Circle Fellowship programme. Look for software businesses to acquire and run, with our support. Email letmein@grafenia.com to start a conversation. © Copyright - 2021 Grafenia plc Our Brands Investor Relations Acquisition Contact Us