Well-known Nashville company Confirmation’s sale to Thomson Reuters wasn’t premeditated, at least on the part of Confirmation.

Brian Fox, the founder and now former president of Confirmation, says his company had been on not just Thomson Reuters' radar screen, but many of the big players in the in the tax and accounting space looking leverage Confirmation’s electronic audit confirmations that act as a secure clearinghouse between accounting firms and banks. He says he would run into them at conferences and talk with them about potential strategic partnerships, which enabled him to build relationships with all the strategics in that space.

While Confirmation was on Thomson Reuters' radar, it was a Reuters’ competitor that first approached the company about a sale. Though Confirmation wasn’t on the market, Fox says he was willing to hear them out.

“I encourage everybody to network and talk to anybody who wants to learn about your business,” he says.

Fox says he typically would engage with private equity firms or strategics that would inquire just to give them a quick update on how the business is going. This time, however, those conversations progressed, with requests to visit Confirmation in Nashville, and for Confirmation to visit them as well.  

“They said, ‘Hey, we'd like to buy you.’ And we said, ‘Well, we're not for sale. We just did this minority recap. The game plan is to really crush it going forward four or five years and then look to potentially sell it at that point in time,'” Fox says. “And they said, ‘No. We really are interested.’”

There was some back and forth — the suitor wanted to know Confirmation’s price, and Confirmation wanted to know theirs.

“We weren't going to tell them what our price was because at that point that's the ceiling that you're going to get,” he says. “But I knew they were serious.”

So Confirmation hired an investment bank to run a formal process targeting just strategics at first.

“At the end of the day, we had a lot of interest. It was about a nine month typical process and Thomson Reuters was the one that actually came out on top of that,” he says. “So we sold officially two years after we had done the minority recap, even though we weren't on the market.”

Fox, speaking at the recent Nashville Smart Business Dealmakers Conference, talked more about the sale to Thomson Reuters, and offered insights into his diligence and investment approach. Hit play on the video above to catch the full conversation.