{"id":38249,"date":"2023-10-20T14:55:11","date_gmt":"2023-10-20T14:55:11","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/itgenius-founder-peter-moriarty-shares-three-key-lessons-from-acquiring-his-biggest-competitor-startupsmart\/"},"modified":"2023-10-20T14:55:11","modified_gmt":"2023-10-20T14:55:11","slug":"itgenius-founder-peter-moriarty-shares-three-key-lessons-from-acquiring-his-biggest-competitor-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/itgenius-founder-peter-moriarty-shares-three-key-lessons-from-acquiring-his-biggest-competitor-startupsmart\/","title":{"rendered":"itGenius founder Peter Moriarty shares three key lessons from acquiring his biggest competitor – StartupSmart"},"content":{"rendered":"
\"itGenius<\/div>\n

On Wednesday, October 5, Peter Moriarty<\/a> was looking forward to two days by the pool in Manila, having just finished a team-training program in the Philippines.<\/p>\n

That was before a ticket came into his company\u2019s help desk, notifying him one of his largest competitors had just gone into liquidation.<\/p>\n

Moriarty sprung into action, wiping his pool-lounging plans and picking up the phone.<\/p>\n

\u201cI jumped online and checked the Australian Securities and Investments Commission (ASIC) website, and realised \u2018oh crap, this has actually happened\u2019,\u201d Moriarty told SmartCompany<\/em>.<\/p>\n

Moriarty runs itGenius, an SME-focused reseller for Google\u2019s G Suite cloud-based productivity suite for businesses, which was on track to be turning over between $1-2 million in 2013.<\/p>\n

The company in liquidation was Chromeworx, a competing G Suite reseller, and a business Moriarty says he had \u201calways looked up to\u201d.<\/p>\n

Read more: How Peter Moriarty built an IT business which caught Google\u2019s attention<\/a><\/p>\n

Just 48 hours and multiple frantic phone calls later, Moriarty had secured a deal with the liquidators to acquire all of Chromeworx\u2019s customers and assets, and to employ its sole employee.<\/p>\n

Moriarty attributes the speed of the deal to a number of factors, including his company\u2019s previous interest in Chromeworx.<\/p>\n

\u201cWe had been in discussion to acquire the customers, contracts, brand, and assets of Chromeworx in August, those discussions didn\u2019t end up proceeding,\u201d Moriarty says.<\/p>\n

\u201cI was under the impression that they weren\u2019t interested in proceeding with the deal, or that they were interested in keeping the business going themselves rather than moving it on to us.\u201d<\/p>\n

Due diligence had been completed on the deal, so Moriarty knew how many contracts and customers the Chromeworx had. This made it much easier to commit to the purchase.<\/p>\n

\"IMG_2226\"
Moriarty and his team in the Phillipines<\/figcaption><\/figure>\n

The value of a customer database<\/h3>\n

\u201cWe knew there was still value in that customer base, we knew how many customers there were and how many contracts there were,\u201d Moriarty says.<\/p>\n

“If all those customers were going to be left for dead, they were just going to transfer their billing account back to Google, or find other arrangements.\u201d<\/p>\n

Keeping those customers meant time was of the essence, but Moriarty quickly found attaining Chromeworx\u2019s customer database was not as easy as he thought.<\/p>\n

Many of the customers had signed up with the business up front, paying for a year of customer and technical support. The company\u2019s sudden liquidation meant they were without solutions.<\/p>\n

\u201cAs unsecured creditors, they had to effectively eat it,\u201d Moriarty says.<\/p>\n

Moriarty struck a deal with many of Chromeworx\u2019s customers, offering to honour the amount paid in advance to Chromeworx if the client committed to doing business with itGenius for the next year.<\/p>\n

\u201cWe\u2019re essentially offering them support out of pocket, and most of the clients are pretty happy to take us up on that,\u201d he says.<\/p>\n

\u201cEvery day without action the clients are effectively in limbo, so we got an email out early last week, and I\u2019ve been calling all of them all week. Building a lot of trust early is the name of the game.\u201d<\/p>\n

Three key negotiations<\/h3>\n

Chromeworx was acquired for less than “six figures”, but Moriarty says the bigger cost to his business is the support he will have to provide the clients, and the sole staff member taken on from Chromeworx.<\/p>\n

Taking on the staff member was essential for the deal to go through, as not only was she out of a job, but she had formed relationships with all of the key clients. This, Moriarty says, was one of the three key negotiations had to take place for the deal to succeed.<\/p>\n

\u201cThe employee was considering running the business on her own, but as she wasn\u2019t a licensed Google reseller, it would have been a lot of delay in getting that through,\u201d Moriarty says.<\/p>\n

\u201cWe saw it as a win-win for us to come on board, and we wouldn\u2019t have gone ahead with the deal if she didn\u2019t come join us.\u201d<\/p>\n

Apart from negotiating the deal with the liquidators, Moriarty had one other unexpected negotiation to undertake to secure all of Chromeworx\u2019s assets.<\/p>\n

The previous owners did not own the company’s domain, with it instead being registered to a shareholder who worked in another company.<\/p>\n

\u201cWe made a deal with him that if the other negotiations went through he\u2019d sell us the domain name, which he did thankfully,\u201d Moriarty says.<\/p>\n

\u201cGetting all three of these negotiations successfully worked out in such a short time frame was the most challenging part of the whole deal. If any part of them failed, the whole thing was off.\u201d<\/p>\n

Don\u2019t get emotionally attached<\/h3>\n

Moriarty believes business owners who are faced with important deals must endeavour to avoid getting emotionally attached, and be prepared to let it all go if necessary.<\/p>\n

\u201cThe key thing with most business negotiations is to not get emotionally attached. We could have easily proceeded with the deal to acquire the customers without the employee, but without that goodwill, it wouldn\u2019t have worked,\u201d he says.<\/p>\n

Good advice from trusted advisors is also necessary says Moriarty, saying it’s key not to jump into deals without being prepared.<\/p>\n

\u201cWe had great advisors with us right through the process. I don\u2019t sign contracts or jump into these deals without speaking to those advisors,\u201d he says.<\/p>\n

\u201cYou don\u2019t want to screw anyone around, but you don\u2019t want to expose yourself to huge financial risk.\u201d<\/p>\n

This article was originally published on SmartCompany<\/a>.\u00a0<\/em><\/p>\n

Follow StartupSmart on<\/em>\u00a0Facebook<\/a>,<\/em>\u00a0Twitter<\/a>,\u00a0LinkedIn<\/a>\u00a0and iTunes<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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