On Wednesday, ASG announced that it had completed a sale of one of our businesses: Paradigm (read more about it here). This was the first time in 3 years that ASG had sold anything, and I honestly forgot the feeling of being a seller and getting across the finish line. I say that word “feeling” very specifically because selling is highly emotional.
Just to get it out of the way, on a dollars and cents basis, the transaction was successful for us. We are fortunate in that we had a decision to make between continuing to operate an extremely high performing business, or selling and realizing a great return on the investment we made. That decision was one that took over a year to manifest.
With all of our businesses, we go through a process of picking our heads out of the weeds and trying to think BIG picture. This happens a lot in our quarterly board meetings. Sometimes it happens ad-hoc. One of the most powerful sessions tends to be in the form of what we call “exit planning.” In general, our bias is to hold businesses as long as we can, as finding a company to buy and build around takes a ton of work. We often also see that businesses really hit their stride in years 3-5, which tends to be the most common years that many private equity groups decide to sell.
Exit planning forces us to ask ourselves, “What will we look like upon exit?” The answer to that is typically a guiding light for what we need to accomplish within the next 7-10 years, and break those large goals into smaller ones, all the way down to what we will do over the next quarter. It was through this exercise that the question became a little less theoretical, as we looked even better than we had first imagined.
As we embarked upon the exit, we were thoughtful about who we wanted to sell to and why. The why is because we truly care about our team. The Paradigm team had done so well over the last 4 years and had really got behind the mission of being the best-in-class solution in the legal technology space. We knew that the next owner of Paradigm needed to feel the same way about the importance of people and culture in a growing software company.
As we found the right partner and completed the transaction, feelings of happiness, sadness and relief (yes, relief because being involved in buying or selling a company isn’t easy) swept over me. I thought about the beginning, middle and end of our story. However, my perspective had changed over time. While I remembered the difficult days being in the weeds while we were dealing with the M&A activity, changing market environments and COVID-19 just to name a few, I instead had thoughts of appreciation and admiration for the team that handled those issues. I thought about the high points of hitting record sales, adding new products and seeing key employees earn promotions and thrive in their new roles. All in all, the reward was the journey itself. The outcome was nice, but it was expected due to the sheer amount of hard work that all of the folks who had a hand (or arm and body in most cases) in the journey.
I’m incredibly proud of what we were able to accomplish in Paradigm. I also have a newfound appreciation that we spend the majority of our time buying and building companies though! Selling is just too hard sometimes!
Thank you, Paradigm team. I can’t wait to see what you’ll accomplish in your new chapter.
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