FAQ

Frequently Asked Questions When Selling Your Software Company

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What are the benefits of selling my software company to Volaris?

Preserve Your Legacy

With our parent company, Constellation Software, we have acquired hundreds of businesses and we have never sold a single one. By keeping businesses forever and investing in products and employees, we allow customer needs to be met over the long-term.

Growth and Sustainability

Companies that join Volaris gain access to capital and best practices to help drive organic and acquired growth. We also offer access to a vast global network to help facilitate international expansions.

Remain Independent

We don’t take over the day-to-day operations of an acquired company. We rely instead on the leadership of existing management teams, who have intimate knowledge of their unique markets.

Access to a Large Global Community

Learning as much as we share is core to who we are. Volaris provides dynamic opportunities for connecting and collaborating with hundreds of software companies and leaders, who have similar challenges and opportunities to yours.

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Do you have an existing presence in my industry?

Volaris owns companies in over 25 vertical markets, including nonprofit, arts & culture, cultural collections, and digital asset management. Click here for a list of all the verticals we currently have a presence in.

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My company doesn’t fit within an existing Volaris vertical. Are you interested in entering new vertical markets?

Yes, we are always open to looking at opportunities to make platform acquisitions in new verticals. In many cases, we have an existing presence in the geography to help scale the acquisition, even if we don’t know the industry.

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How do you value my business?

Your company’s valuation rises when your revenue streams are stable, predictable, and likely to continue in the future. As a result, we’ll look closely at your recurring revenue figures to help us determine your valuation.

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How should I start to prepare to sell my software company?

You will need to prepare certain documents in advance of acquisition discussions. These documents may include business plans, product information, market data, and high-level industry trends, as well as information on customers and suppliers. In terms of the financial information required, we will want to see historical income statements, recent balance sheets, and financial projections for at least the next 3 years.

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What will happen to my software company if it is not performing well after Volaris acquires it?

Business performance will be assessed against our standard benchmark metrics and a plan will be developed by your management team to address any shortfalls. You will also have access to a team of leaders, who will provide mentoring and share with you how they have resolved similar problems.

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Are there centralized functions that Volaris manages?

Volaris uses some centralized tools to manage HR, finance, and IT requirements. These are in place to provide consistent benchmarking, processes, and security to our businesses.

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Does Volaris maintain existing management or bring in its own management?

We prefer to keep existing management teams in place. In fact, over 80% of our current business leaders were in place at the time of acquisition or have been internally promoted. If you would rather retire or otherwise exit the business, we will work with you to promote from within or recruit a successor.

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Would our company be merged into another business or remain independent?

In many cases our acquisitions remain standalone companies with autonomy over their branding, culture, and operational decisions. The decision to keep your business independent or integrated will be agreed upon and discussed well in advance of your close date.

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How much autonomy will my company have post-acquisition?

Acquired businesses have performance benchmarks to meet, but how you meet them is up to you. We believe that the best decisions are made locally by leaders with intimate knowledge of their market. As a part of Volaris, you can continue running your business as a standalone company while benefitting from belonging to a larger global organization.

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How does Volaris help foster collaboration and idea-sharing between acquired businesses?

We regularly hold functional summits for employees in sales & marketing, customer care, professional services and finance. These summits allow individuals with the same job function to meet each other and build networks across businesses. We also host leadership development events such as Quadrants, a Volaris-wide event with over 600 attendees.

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What types of metrics are used to measure how well a business is performing?

We benchmark all our businesses through a set of standard performance measures for sales & marketing, R&D, professional services, HR, and finance.

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How long does Volaris hold a business before selling it?

Volaris never sells its businesses. We believe in holding companies and growing them forever.

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Does Volaris offer opportunities for career growth for its acquisitions’ employees?

We strongly believe that a solid talent pool is necessary to build a great business. As such, we nurture a culture of learning and provide professional development opportunities for all levels of the organization.

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How will selling my software company to Volaris impact my customers?

When we acquire a business, we remain loyal to it. Unlike private equity or venture capital firms, we do not flip and resell the companies we buy. By keeping businesses forever and investing in products and employees, we allow customer needs to be met over the long-term. We also invest in organic growth initiatives, which can enable you to provide additional products and services to your customers.

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If I sell my software company to Volaris Group, will my company become a part of Constellation Software?

Your business will be acquired by Volaris Group as a subsidiary of Constellation Software and as such will be considered a part of both entities.

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What is Volaris’ acquisition criteria?

We primarily look to acquire software businesses that serve a specific vertical market. We are interested in expanding within our existing vertical markets as well as entering new markets. Larger and smaller businesses have found homes with Volaris, though we typically work with businesses that have 25+ employees.

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What are the steps involved in the acquisition process?

Volaris follows the same general acquisition process of most acquirers:

1) Initial Contact – Seller and buyer vision exchange

2) Non-Disclosure Agreement (NDA) – Keeps information-sharing private, protected, and confidential

3) Indicative Offer (IO) – Non-binding offer

4) Letter of Intent (LOI) – Formal agreement of initial terms

5) Due Diligence – Comprehensive business appraisal

6) Sales Purchase Agreement (SPA) – Final contract execution

7) Finalization – Receive your proceeds and continue to operate your business or proceed with your exit plan

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Do you buy companies that have a diverse cap table?

Yes, we have acquired companies with a diverse cap table in the past.

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What percentage of the company do you acquire?

In most cases, we buy 100% of the companies we acquire.

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How long does the due diligence process take? Do you talk to our customers?

Typically, it takes us about 45 days to complete our due diligence. However, the timeframe can vary depending on the size and scope of your business. During this process, we may speak with some of your customers if all shareholders are comfortable with us doing so. We will not speak to your customers without your consent.

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What is involved in the due diligence process?

The due diligence process involves both the buyer and seller looking to validate assumptions about their relationship moving forward. During the process, we will review the financial, legal, and operational aspects of your company.

So that you can compile and prioritize the documents required for review, a due diligence checklist will be provided by Volaris. It generally includes:

  • Financial statements – historical, year to date, and forecasted
  • Market information – market analysis, competitive landscape, and SWOT analysis
  • Commercial data – pricing and revenue model, sales pipeline, product analysis, and customer analysis
  • Legal – supplier agreements, customer agreements, any historic, current or potential claims, disputes, litigation, etc.
  • Intellectual property – patents, trademarks, NDAs and non-compete agreements, R&D agreements, etc.

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What kinds of advisors will I need to enlist to help me sell my software company?

Depending on the abilities of your internal resources and your level of comfort managing unfamiliar processes, you may consider hiring one or more of the following advisors:

Business Broker

You may choose to sell your company on your own, or you may choose to engage a business broker (sometimes referred to as an M&A broker or advisor). These specialists focus on sourcing buyers, preparing companies for sale, and running auction processes. Read this article to learn more about business brokers and how to choose one that will suit your needs.

Legal Counsel

Consider enlisting the services of a lawyer that has experience in M&A. The right legal advisor will help ensure that you understand the process, advise you on risks, advocate on your behalf, and ultimately, close the deal. They should also be able to advise you on who else you may need on your team, such as an accountant or other transaction advisors.

Accountant and Tax Specialist

An accountant will play a crucial role during the diligence process, particularly in situations where you have chosen not to engage a broker. Your accountant will act as a trusted advisor and will help you navigate the financial aspects of due diligence. Moreover, tax implications are often an overlooked area. Engaging an accountant to structure the transaction in the most tax efficient manner can create additional value for you.

Let’s see where we can grow together. If you think Volaris Group could be the right home for your business, we want to meet you. Contact us today.

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