Selling a business today brings with it new challenges. As deals were getting consummated right before the pandemic hit and during the lockdown, buyers and sellers explored new ways of getting the deals, and the integration that followed, done.
Single Path, led by CEO Rob Koch, was almost sold to private equity in 2019, but instead ended up merging with DYONYX in early 2020, right before the pandemic. The merger, which produced DYOPATH, the company Koch now leads as CEO, took place at the beginning of March, which meant the integration had to be done all through pandemic. That presented a number of challenges, Koch says. Fortunately, the company was able to leverage the communication solution of the moment.
“One of the silver linings with the pandemic was the use of technology,” Koch says. “We were so much more efficient using Zoom and Webex and Teams to integrate our two businesses because we didn't have to get on a plane between our two organizations. So it drove the timeline faster than what we anticipated.”
Koch says there was some nervousness around the ability of the company’s to perform during the pandemic, given the uncertainty around how it would affect the market. As it turned out, the technology also enabled the merged companies to be much more productive. So the managed IT service provider grew. It lost some of its smaller clients that just didn't have the financial wherewithal to make it through the pandemic and went out of business, but was able to add quite a few larger clients that needed help with remote workforces, and its K-12 practice was in a position to help schools move into more of a hybrid learning environment.
“We made it through both the integration and from a performance perspective, quite well,” he says. “When we budgeted before the pandemic what the two companies would look like to where we ended up in the year, I think we missed our forecast in the tens of thousands of dollars. And given our size, it was it was pretty much on target.”
Still, the integration meant changes for the business leader. Koch says it’s takes some adjustment to go from owning a company and not really reporting to anyone to having a partner.
“You have to understand how that's going to change the way you operate and manage the business,” he says.
Koch, along with WILsquare Capital Managing Director Drew Caylor, CIBC Managing Director of Global Investment Banking Greg Gorlinski and Polsinelli Shareholder Paul Klug spoke at the recent St. Louis Smart Business Dealmakers Conference about what sellers should consider when dealmaking during the pandemic. Hit play on the video above to catch the full panel discussion.