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Selling to Private Equity

Chris Tossell
Cofounder and Former Commercial Director at The Access Group

Learning outcomes

  • What private equity companies look for in founders and software acquisitions
  • How to approach and pitch to private equity firms

Executive Bio

Chris Tossell

Cofounder and Former Commercial Director at The Access Group

Chris was a co-founder of Access Group, a UK-based enterprise software company, in 1991. Chris left in 1995 and returned in 2005 during a management buyout to lead M&A with a private equity sponsor. He led over 18 acquisitions during 2005-11 and helped the business grow in 2005 from £25m revenue to over £240m in 2019. Access is owned by TA Associates and Hg Capital and is valued over £1bn in 2019. Read more

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Interview Transcript

But what about if you’re a founder and you have a platform business. A private equity fund looks to engage with you, how would you advise working with them on a buy and build strategy?

Before they’ve invested in you?

Yes, and during.

I talk about kissing a lot of frogs in acquisitions. Actually, you need to kiss a lot of frogs in private equity, as well. When we were looking for a private equity company to do a deal, it took us a year to find a private equity company that we both liked and that would pay. We met, probably, eight or nine private equity companies, before we made a decision. We had an advisor to help us. We put together a presentation about Access and we would go to the private equity company and we would make that presentation; this is why you should invest in us. Almost all of them were interested. Probably 90% of them said they would like to invest, but only one of them was willing to pay the money, really. There are an awful lot who regret they didn’t.

They’re very easy to engage with but, as a founder, if you’re going to go to private equity, you do need an advisor. You’re not going to go on your own and go it cold. You might go it cold, initially, just to have a little chat to people but really, you want to engage an advisor. There are lots of them out there and, actually, I think choosing the advisor is the more important thing. If a target says to me, I think I’m going to approach the advisor, I usually say, well, obviously that’s up to you. We’re interested in buying the business, but if you want to appoint an advisor, at least let me give you some ideas on how to do it. An awful lot of people seem to appoint advisors they met down the pub, or a mate, who sold his business. It’s just not the way to do it.

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