Metafile Case Study
- Headquarters: Rochester, MN
- Acquisition Date: July 2021
- Vertical Market: Financial Services
- Visit Company Website
Background
Established in 1979, Metafile Information Systems provides paperless document management applications to accounts payable, accounts receivable, and human resources departments across North America. Metafile was founded by Allan Sprau who served as the President of the business for over 30 years until 2010 when he transitioned to a position on the board. Sprau’s children, Nick Sprau and Virginia Wimmer, began working at Metafile upon graduating from college and have remained with the business ever since.
From a young age, Nick Sprau had a strong interest in programming but focused his academic studies on business administration and marketing. Sprau began working at Metafile in 1986 as a Marketing Coordinator, which was the first customer facing role at the business. Sprau worked in sales and marketing for over 20 years and continues to oversee this department today. In 1992, Virginia Wimmer graduated with a computer science degree and explored a variety of job opportunities. Ultimately, she decided to join Metafile for the opportunity to work within a business that was a pioneer in the early stages of the PC era. Throughout her time at the company, Wimmer worked many roles including support, programming, and management.
In 2010, Sprau and Wimmer began to operate the business together as co-CEOs. Upon acquisition in 2021, they redefined their roles and have subsequently become the CEO and CTO of Metafile. This opportunity allows both Sprau and Wimmer to focus on the areas that they are most passionate about.
Decision to Sell
After successfully running the business as co-CEOs for over a decade, Sprau and Wimmer were ready to take Metafile to the next level and decided to search for a new home for the business. They agreed that they wanted to join an organization that not only provided resources to grow, but also had the financial stability to ensure that the future of Metafile would be safe and secure.
Growth was especially important to Metafile as the software world started to move into hosting. Sprau and Wimmer were eager to follow the trend in the industry and learn ins and outs of it. They had put together their own data center and quickly realized that it was not as easy for a smaller company to shift to hosting as it was for the bigger players in the industry. That’s when they began to seriously look for an acquirer that could help support this goal without dismantling their efforts so far.
We believed that Metafile has what it takes to move forward, but we needed the guidance on how to move from a small company to a mid-sized company. We were looking for a mentor.
Because Volaris Group has over 150 software businesses in its global portfolio, Sprau and Wimmer would gain access to an environment of continuous networking and best practice sharing among other businesses leaders.
Sprau and Wimmer considered many types of buyers for Metafile, but ultimately did not find a strong fit with traditional M&A opportunities. The largest disadvantage of other options they pursued was the lack of autonomy post-acquisition. Sprau and Wimmer had intentions of staying with the business for the long run and were not interested in giving up the responsibility of managing the business. Unlike many other buyers, Volaris Group is a buy-and-hold forever acquirer that gives business owners and leaders full autonomy over business decisions. For Wimmer, “the Volaris model was the right fit for Metafile because of the expertise within software businesses of our size at Volaris, and the opportunity to leverage resources and best practices among these businesses.” In addition, Volaris’ parent company CSI (TSE:CSU) gave Sprau and Wimmer the confidence they were looking for in the future stability of the business.
Post-Acquisition Success
The post-acquisition process is a time for newly acquired businesses to get acquainted with the Volaris Group team. Upon joining, businesses work closely with the integration manager to ensure a smooth transition. Sprau says, “Our integration manager supported us when we needed it and helped us as an outside consultant for the business.” One of the first ways Metafile found success was by looking at financial reporting best practices and benchmarks from other Volaris businesses.
Volaris helped us reduce operating expenses in a significant way. We were able to make some positive changes that we wouldn't have had the courage to do as an independent company.
In addition to the metrics, Sprau and Wimmer have enjoyed having access to a team of software leaders to collaborate with instead of feeling like they are alone on an island. Within the first few months, Sprau and Wimmer were able to attend a leadership summit where leaders from across the portfolio came together to discuss challenges and strategies in key areas such as professional services, initiatives, and human resources. Wimmer shares that the biggest appeal of the leadership forums and summits within Volaris Group is the chance to learn information “that is not readily available on Google in the context of vertical market software businesses like ours.” These networking opportunities provide leadership with guidance from those who have faced similar challenges and can offer real world advice on how to solve them. Sprau recounts his experience with reaching out to Volaris’ global network on an employee forum where he, “received more responses and opinions to a question in 24 hours than I had in ten years.” He is looking forward to taking advantage of this community platform in the future to gain more valuable insights from others within the organization.
As for Metafile’s employees, Sprau and Wimmer are excited that they have been able to offer career growth opportunities that were not possible before. “We were a fairly small company, so the Metafile ladder was pretty short,” says Wimmer, “so to feel like you’re being promoted up some sort of a train was completely missing.” Now, Metafile’s employees have the chance to grow at Metafile and within Volaris Group if desired. To support employee growth, Metafile has implemented a talent development plan for all team members. The first step was to have the leadership team develop a full strategic plan that outlined key priorities for all employees. They then assigned goals to help everyone in the organization understand and measure the impact of their role to the business. Wimmer shares, “Our leadership is more in sync than we have ever been before after agreeing on the goals of the organization all the way down to how to communicate them to employees.” Sprau feels that the emphasis on talent development has made a positive impact as well, and says, “Virginia and I had created a silo, but now that employee goals overlap and feed each other, everyone understands what our team is working to achieve.”
Looking to the Future
Sprau and Wimmer are excited for the future of Metafile within Volaris Group. Most notably, they are eager to watch other Volaris businesses transition from traditional licensing to hosting. While Metafile has already shifted their business into the SaaS model, Wimmer sees other businesses across Volaris making this shift in the future. Wimmer says, “I think there’s a community within Volaris that is focused on learning, navigating, and sharing what it is to be a hosted company, because that’s changing all the time. We can help each other in finding the right next step faster.” This will be a great opportunity to see other businesses adapt to a change in the industry while getting to learn from one another along the way.
In addition, the idea of continuous innovation through organic initiatives was especially appealing for the business. “Metafile has been a very innovative company and has always been a technical leader. Volaris gave us trust that innovation would still occur,” says Wimmer. For Sprau, getting to see the portfolio grow via acquisition of similar software businesses in the industry is what he is looking forward to the most. Because Metafile has two distinct product offerings, Sprau shares that he is “excited to find creative ways to take advantage of the various portfolios within Volaris.” Both Sprau and Wimmer will have the opportunity to work with the Volaris team from an M&A perspective to strengthen and grow the portfolio. Metafile will continue to operate under the direction of Sprau and Wimmer with support from Volaris Group every step of the way.