Page 69 - Paulisms: Gold Nuggets for Small Business

investment company out of Australia. I discovered the hard way that they just wanted to acquire the business, bundle things up and flip it off as a whole. The people seemed nice and a term sheet was signed. And then the grind started. It was a great experience going through due diligence (DD). It highlighted many things we needed to tidy up in the business. That company really did me a favour (‘For every adversity there is a seed of opportunity’). I walked out of a final meeting (six of their henchmen and one of me) after doing DD where they continued to grind me and the price down. I told them that that wasn’t going to happen. Yes, I just walked out.
At the time, I said to the person leading their acquisition, ‘I have worked most of my life for this and if I stuff it up, I stuff it up really bad.’ They didn’t care. The second mistake I had made was not getting the best expert advice, i.e. lawyers that are specialised in this area. I was trying to save money and thought they were nice guys, but instead, they were seasoned negotiators.
When it came to Just Water buying us a couple of years later, I had a great legal and accounting team. I now had two in-house accountants. Through my exposure to the EY Entrepreneur of the Year award, EY had put together an information memorandum (IM). I moaned about the price, but it was one of the best dollar investments I have ever made. The experience of having been through DD before and the structure I had put in place (particularly around accounting), meant it was the fastest and cleanest DD and acquisition Just Water had carried out. They were also a pleasant company to work with in the DD process, unlike my bad experience a few years earlier.
In fact, seven weeks from first discussion at a bar at an Entrepreneurs’ Organisation (EO) business conference in India to a cheque in the bank is all it took due the fact that I had the business ready to sell.