Understand your marketplace. Be aware of what your competitors are doing. Know what potential buyers are looking for. And make sure your company aligns with what the market needs. Those experience-derived pieces of advice come from Ashley Moore, former CEO of Spatialest, a company that provides geospatial solutions for the U.S. tax assessment market. Spatialest's SaaS-based software helps tax assessors consolidate property data and records from various sources for use in property appraisal modeling and appeals management. In 2023, Spatialest, a Corum client, was acquired by Schneider Geospatial, a geographic Information System (GIS)-based SaaS provider of land and asset management solutions for local governments and the assessment industry in the U.S.
From the university to the market
Spatialest is a commercial spinoff from a research project at Ulster University in Coleraine, Northern Ireland. The project's objective was to develop a software program that could find and consolidate data about local comparable properties for use as a resource in valuating thousands of different properties at the same time. The effort was successful, and Moore, who at the time directed the Ulster Science Research Park, an office tasked with helping commercialize the university's intellectual property, was asked to turn the results of the project into a business. That commercialization became Spatialest, and Moore was asked to become the company's executive director. Later he became its CEO.
The company went into business in 2010, and provided property valuation solutions to many local government assessment offices in the U.S. Asked why a Northern Ireland-based company provided solutions exclusively to local governments in the U.S., Moore pointed out that the largest property market the world is in the U.S, and so the largest market for property assessors ‒ Spatialest’s target audience‒ is there too.
Finding a partner
Spatialest was a small but successful company with a high percentage of vertical recurring SaaS revenue and a good growth rate. However, after 10 years in business, Moore saw that a change was needed for the company to continue to grow. According to Moore, "Money was coming into the market. Our competitors were being acquired by larger companies. Capital was being brought into those companies, which was going to make it harder for us to compete. I could see that we needed to scale more quickly to make the most of our highly valuable IP. And by continuing to operate on our own, I thought that was putting us in jeopardy. So, in conjunction with the other shareholders, we thought it was a good time to start considering an exit." This led him to Corum and ultimately a successful sale to Schneider Geospatial.
But there's also a lesson here for company leaders. In Moore's words, "Have a very good understanding of your marketplace. Know what the other people are doing in the marketplace, and how that might impact you." Moore also worked to get a better understanding of the type of people who might partner with Spatialest and what type of things they might be looking for.
Working with a good advisor
In actuality, Moore initially thought that he could find a buyer himself. "I had thought we could run the process ourselves, he admitted, “but I came to the realization that it would not be possible for us to do it. We didn't have the time, the skill set, and the contacts to do that properly."
So in late 2021 Moore contacted Corum. He recalled, "I started doing some research in the marketplace and Corum's name came up a couple of times. I reached out to the company and later attended a Corum-led conference in London. We then made the decision to run with Corum.” They became a Corum client in early 2022.
Corum's assistance and its thorough M&A process led to an optimal outcome for Spatialest. Corum's global search process identified 120 potential buyers, of which 15 signed non-disclosure agreements. Ultimately, four potential buyers submitted Letters of Intent and made offers. With multiple buyers contending to make the deal, it created an auction environment and seller leverage which produced an optimal offer from Schneider Geospatial both in terms of purchase price ‒ a 200% increase over the lowest bid, and a 12% increase over the highest initial bid ‒ as well as in deal structure, such as better warranty terms for the seller.
Corum also provided help in ensuring that Moore and his team were prepared for the rigors of due diligence. Moore stated that Corum's assistance was invaluable in, "making sure that our company organization and our accountability, our finances, and our legal structure were all in a very good place because the due diligence process can be very exacting." His advice to sellers in that regard: "Do not be slack or loose in running your company and in terms of those items because that is going to get exposed during due diligence."
Life after the deal
Asked what life is like after the deal, Moore responded, "Life's great. I have more time, of course. I've spent time traveling. I've spent time with my family. I'm actually trying to get better at golf ‒ that's maybe one thing that won't happen. But life's good. I'm also starting to look at other opportunities going forward. I now have the time and capital to be choosy about what I want to do.”
Moore's final piece of advice to sellers: "Think carefully about what you're trying to achieve and make sure your company and its metrics are in line with what the market needs. Ensure that your company is in very good shape so that you have a great story to tell."