Inorganic Podcast

Summary

In this episode, co-hosts Ayelet Shipley and Christian Hassold discuss the latest trends in digital agency M&A, focusing on recently announced deals, including Accenture's acquisition of Superdigital, Podean’s acquisition of Commerce Canal with backing from Mountiangate, Impact XM’s acquisition of Shelton Flemingand, and Gravity Global's acquisition of Marketing Doctor. As a part of their discussion, they debate the rationale and industrial logic of these acquisitions, as well as what they indicate about agency M&A as a whole. The conversation highlights the evolving nature of the agency market and the impact of technology and consumer preferences on business strategies.

Takeaways

• Accenture's acquisition of Superdigital reflects a shift towards the creator economy.
• Retail media is experiencing significant growth compared to e-commerce.
• Experiential events are becoming crucial for brand engagement.
• Women-owned businesses face challenges in valuation and funding.
• The importance of technology in enhancing experiential events is growing.
• Agencies are increasingly focusing on expansion in international markets.
• The trend of consolidation in retail media agencies is on the rise.
• Live events and personal experiences are key to consumer engagement. 

Chapters

00:00 Introduction

01:33 Soho House Valuation and the Micro-Club Trend

08:10 Accenture Song Acquires Superdigital

11:59 Podean Acquires Commerce Canal

15:54 Impact XM Expands to UK with Shelton Fleming

22:49 Gravity Global Acquires Women-Owned Marketing Doctor

23:26 Gender Equity and M&A: Are Women-Owned Agencies Undervalued?

28:59 DealCon Plug and Wrapping Up

Connect with Christian and Ayelet

Ayelet’s LinkedIn: https://www.linkedin.com/in/ayelet-shipley-b16330149/

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

Web: https://www.inorganicpodcast.co

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Hosted on Acast. See acast.com/privacy for more information.

Summary

In this episode of the Inorganic Podcast, Christian Hassold discusses five notable acquisitions in SaaS, specifically those where larger companies acquired smaller or earlier-stage companies. As a part of this discussion, Christian highlights deal values (announced and speculated), the industrial logic of acquirers, and other key details surrounding the acquisitions.

Acquisitions Covered

Vanta + Risky on July 17, 2025

Rokt + Canal on July 17, 2025

Darktrace + Mira Security on July 21, 2025

Verisk + AccuLynx on July 30, 2025 

Descartes + Finale Inventory on August 4, 2025

Chapters

00:00 Introduction

03:17 Preview of the Five SaaS Acquisitions

04:17 Descartes Acquires Finale Inventory

08:41 Verisk Acquires AccuLynx for $2.35B

12:14 Darktrace Acquires Mira Security

15:20 Rokt Acquires Canal

19:31 Vanta Acquires Riskey (Acquihire?)

23:49 Takeaways and M&A Themes

Connect with Christian and Ayelet

Ayelet’s LinkedIn: https://www.linkedin.com/in/ayelet-shipley-b16330149/

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

Web: https://www.inorganicpodcast.co

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Hosted on Acast. See acast.com/privacy for more information.

Summary

In this episode of the Inorganic Podcast, hosts Ayelet Shipley and Christian Hassold, co-hosts of the In/organic Podcast, discuss the current state of mergers and acquisitions (M&A) in the agency sector, focusing on Q2 activity. They explore market trends, deal multiples, notable acquisitions, and the importance of strategic fit in the current M&A landscape. The conversation also touches on the valuation of tech-enabled agencies, the luxury market's unique characteristics, and expectations for future market activity in Q3 and Q4.

Takeaways

• Deals still happening, but the market is pickier.
• Timing exits for the next 2021-2022 won’t work
• Seller valuation expectations still mixed bag
• Digital services continue to grow in demand.
• Strategic buyers are looking for very specific needs (culture fit, capabilities, clients, and case studies)
• Q3 and Q4 should see more deal activity based on deal flow signals

Chapters

02:25 Q2 Market Trends & Valuation Multiples

06:24 What Makes a Deal Stand Out in Q2

09:16 Media, AI, and Buyer Control Strategies

11:29 Captiv8 and the SaaS-Driven Valuation Uplift

14:24 Should Agencies Rebrand Themselves as SaaS?

17:35 Luxury Roll-Ups and the Together Group Model

20:29 Market Shift: From Roll-Up Volume to Strategic Fit

24:39 Resetting Expectations Around Multiples

28:33 Q3 & Q4 Deal Flow Outlook

30:45 Previewing Themes for the Next Episode

Connect with Christian and Ayelet

Ayelet’s LinkedIn: https://www.linkedin.com/in/ayelet-shipley-b16330149/

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

Web: https://www.inorganicpodcast.co

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Hosted on Acast. See acast.com/privacy for more information.

Summary

This is part two of a two-part series where Christian Hassold and Ayelet Shipley demystify the complexities of agency valuations, exploring the interplay between buyer and seller motivations, and discussing real-world scenarios that illustrate various deal structures. They emphasize the importance of understanding the unique dynamics of the agency market, including the factors that influence valuations and the creative structuring of deals to meet the needs of both parties. 

Discussion Highlights

• Reviews a $3.4M revenue, $1.7M EBITDA agency valued at $10.2M (6x multiple). Creativity is needed for deals under $2M EBITDA due to higher perceived risk and sensitivity of margins.
• This deal involved a 50% cash consideration ($5.1M) and 50% rollover ($5.1M). The cash consideration was paid quarterly over three years, performance-based (not an earnout), with payments halted or reduced if revenue drops significantly (below 50% or 50-99% of the agreed-upon value).
• We also discussed a second deal involving a $40M revenue agency with $9M EBITDA commanding a 10x multiple ($90M EV) - a top of market multiple because of high gross retention (>85%) and >80% retainer-based clients. The challenge is managing the risk of large clients churning post-closing when the multiple is top of the market.
• Involved a 15% rollover. A significant earnout (up to an extra $9M) is offered to bridge the gap and incentivize the seller for growth.
• Beyond financial metrics, we discuss factors that influence valuations like the acquiring entity's need for specific capabilities, clients, talent, customer retention, and consistent growth (10-20% year-over-year).

Chapters

0:00 Introduction  

2:06 Scenario D: Structuring a Deal Below $2M EBITDA

3:10 Why Sub-$2M EBITDA Deals Are Hard

4:53 Performance-Based Cash Payouts 

6:18 Keeping Sellers Engaged Through Uncertainty

7:52 Incentivizing Sellers Through Equity and Bonuses

11:21 Scenario C: Challenges of Scaling a Large Agency

12:57 Structuring a $40M, $9M EBITDA Deal at 10x

15:28 Market View on Earnouts in EV

19:25 When Growth and Retention Justify High Multiples

20:50 Market Range for Cash-at-Close Offers

21:20 How Strategic Buyers Compete with HoldCos

22:53 Wrap-Up & Closing Thoughts

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Connect with E27 guest, Ayelet Shipley on LinkedIn

https://www.linkedin.com/in/ayelet-shipley-b16330149/

Hosted on Acast. See acast.com/privacy for more information.

Summary While recording episodes 26 and 27 of the In/organic Podcast, Ayelet and Christian delved into a small rabbit hole, discussing buyer and seller dynamics in transactions involving unsophisticated buyers and sellers - a term commonly used in the industry. We clarify in the video that unsophisticated really means buyers who do not do a lot of acquiring or sellers who are usually selling their company for the first time and do not have good M&A counsel.

We did not get into the details in this recording, but the key takaways are:

If you are a first time seller: 1) Be Informed: Retain experienced M&A counsel - that is an attorney who specializes in M&A (which is different from a business lawyer who touches M&A, but is not a transactional lawyer by trade). Most M&A lawyers are already in your network and are willing to offer 1-2 hours of off-book time to help with key considerations before getting too far along in the process. 2) Ask the sellers questions. If you don't understand terms or if there is anything that is unclear, go ahead and ask. For example, if you are offered $10 million for your business, is that all cash, a closing, or something else? If it includes stock in the sellers company, you have a right to ask for some information from the acquiring company ("reverse diligence") in order to qualify the value of the stock in the company relative to the value you are exchanging.

If you are an unsophisticated buyer: 1) Get Ahead of Legal: Don't let the lawyers be the first ones to bring forward terms that will economically impact the deal without having spoken about it first. Example things are escrow, reps & warranties insurance, special indemnities, discounts to EBITDA derived from quality of earnings analysis. When you are 5 steps ahead of key negotiating items in legal, it builds trust and keeps legal costs under control. 2) Agree on the earnout structure and compensation before going to LOI or drafting definitive agreements. This is basic, but the intent is that the seller is a part of the creation of the construct versus a recipient. Even if there is not a lot of room for flexibility, its much better to preview and ask for input than throw over the fence and have lawyers negotiate the terms.

Enjoy!

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Summary

In this episode, Christian Hassold and Ayelet Shipley delve into the complexities of agency valuations, exploring the interplay between buyer and seller motivations, and discussing real-world scenarios that illustrate various deal structures. They emphasize the importance of understanding the unique dynamics of the agency market, including the factors that influence valuations and the creative structuring of deals to meet the needs of both parties. In this conversation, Ayelet and Christian delve into the intricacies of business valuation, particularly focusing on earn-outs and creative deal structures. They explore how earn-outs can bridge the gap between current cash and total enterprise value, especially in lower EBITDA scenarios. The discussion also highlights the dynamics of larger deals, emphasizing the importance of timing and the need for sellers to recognize good opportunities in a fluctuating market. The conversation is rich with insights on how to structure deals that meet both buyer and seller needs while navigating the complexities of agency acquisitions.

Takeaways

• A deal occurs in the overlap of buyer and seller needs.

• Creative structuring can lead to better outcomes for sellers.

• The agency market is dynamic with many new entrants and exits.

• People, client relationships, and capabilities are key assets in agency valuations.

• Valuations can vary significantly based on market fit and potential.

• Understanding the motivations of both buyers and sellers is crucial.

• The agency landscape is evolving with increasing deal velocity. Earn-outs can be a strategic tool in business valuation.

• Trust between buyer and seller facilitates smoother transactions.

Chapters

0:48 Introduction

1:59 Why Agencies Are Built and Sold

8:03 How Buyers Assess Value

12:10 Cash Upfront vs. Long-Term Upside

14:28 Real-World Deal Scenarios

15:02 Scenario B: Traditional 80/20 Deal

19:33 Earnout Treatment in Valuation

21:21 Scenario D: Creative Deal for Smaller Agencies

26:27 Performance-Based Payment Adjustment

29:23 Why Larger Deals Are Different

32:41 Wrap-Up

Connect with Christian & Inorganic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Connect with E26 guest, Ayelet Shipley on LinkedIn

https://www.linkedin.com/in/ayelet-shipley-b16330149/

Hosted on Acast. See acast.com/privacy for more information.

Summary

In this episode, host Christian Hassold chats with Ayelet Shipley, the head of corporate development and deal management for Speed M&A by Jones-Spross. Ayelet shares her unique journey from aspiring therapist to corporate development leader, emphasizing the importance of sales skills and psychological insights in the M&A process. The conversation delves into sourcing opportunities, qualifying conversations, and understanding client expectations, drawing the connections between the similarities of enterprise sales and M&A deal origination.

In this conversation, Ayelet and Christian delve into the intricacies of the acquisition process, focusing on understanding seller motivations, evaluating business fit, and navigating decision-making dynamics. They discuss the importance of asking specific and open-ended questions to understand the intent and motivations of potential sellers and how to identify points of alignment or misalignment. They also discuss the importance of rapport building and the sell-side bankers' valuable role in the process.

Takeaways

• Ayelet transitioned from a potential career in therapy to corporate development after realizing her skills could be applied in business.
• Understanding acquisition candidate pain points is crucial in the discovery process
• The process of sourcing opportunities requires a strategic approach to identify potential targets. Understanding seller motivations is crucial for alignment.
• Setting clear expectations about deal structures is important
• Qualifying questions help determine if a deal is worth pursuing further
• Ayelet emphasizes the importance of her background in psychology and sales as foundational for making her successful in this work.
• Ayelet emphasizes the importance of psychological insights in sales conversations.
• Transparency throughout the process fosters better outcomes.

Chapters

00:00 Introduction

00:55 Ayelet's Background in Psychology and Sales

07:15 Goals of Call 1

11:26 Deciding to Advance Past Call One

13:54 Setting Valuation Expectations 

15:30 Goals of Call 2

18:48 Matching Verbal Claims to Financials

21:55 Advancing Further and Disqualifiers

24:48 Scoring to Qualify Deals

25:05 Keeping Evaluation Criteria Simple

28:48 Identifying Decision-Makers 

31:10 Distinguishing Uncommitted Sellers

33:36 Working with Sellside Bankers

39:33 Conclusion

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Connect with E24 guest, Ayelet Shipley on LinkedIn

https://www.linkedin.com/in/ayelet-shipley-b16330149/

Hosted on Acast. See acast.com/privacy for more information.

Summary

In this episode of the Inorganic Podcast, host Christian Hassold discusses the recent acquisition of ContentServ by Centric Software with their co-founder and former board member Armin Dressler. Their discussion spans the history of Contentserve, its journey from an on prem to SaaS solution, transition of leadership to the current CEO, Michael Kugler, and the details of the M&A process. This episode discusses the acquirer, their rationale and some of the inside baseball on the deal valuation. 

Chapters

0:00 Introduction

2:54 How Contentserv Built Its Market Position

10:01 Key Learnings from how ContentServ evolved

14:02 Insights on Leadership Changes

19:49 Why It Was the Right Time to Sell

23:37 The Sale Process and Participants

26:23 Why Centric Software Made the Acquisition

36:02 Implications for the PIM and Commerce Ecosystem

40:46 Conclusion

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Connect with E24 guest, Armin Dressler on LinkedIn

https://www.linkedin.com/in/armindressler/?originalSubdomain=ch

References

https://www.3ds.com/newsroom/press-releases/dassault-systemes-announces-centric-softwares-acquisition-ai-powered-pxm-solution-contentserv

https://www.investcorp.com/investcorp-agrees-to-sell-software-vendor-contentserv/

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In this episode of the Inorganic Podcast, hosts Christian Hassold and guest Erik Morton delve into the planned acquisition of Brightcove by Bending Spoons. They explore the dynamics of the deal, the market context, and the implications for both companies. Brightcove, a pioneer in online video hosting, faced challenges in a competitive landscape that evolved substantially due to digital video creation and storage innovation, notably the free models offered by YouTube and Vimeo. Christian and Erik discuss Bending Spoons' pattern of being an acquirer of distressed businesses and how they typically run the businesses post-acquisition to maximize return on investment. This episode is an interesting look at how tech “Zombies” find a home through strategic acquisition when operating standalone is not a credible option.

• The acquisition of Brightcove by Bending Spoons is part of a broader roll-up strategy that has been executed multiple times prior.
• Bending Spoons has been particularly interested in notable companies that became distressed due to commoditization or lack of differentiation, yet still had loyal enterprise or SMB customer bases.
• The acquisition price reflects Brightcove's current market challenges and growth.
• Public companies face immense pressure to grow, leading to take-private transactions when they cannot without making drastic changes that public markets don’t appreciate.
• The concept of 'zombie' companies is relevant in today's market, highlighting the impact of stagnation on management and employees.
• We will see more transactions like these as Zombie companies both public and private face growth challenges.

Chapter Markers

0:00 Introduction

2:52 Background on Brightcove

5:15 Background on Bending Spoons

07:18 Insights on the Deal Valuation

11:37 Brightcove's Engineering Costs & Financial Health

14:48 Anticipating Radical Changes Post-Acquisition

21:46 Investor Returns and Employee Compensation

28:25 Takeaways 

32:12 Conclusion

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Connect with E20 guest, Erik Morton on LinkedIn

https://www.linkedin.com/in/erikimorton/

Hosted on Acast. See acast.com/privacy for more information.

Summary

In this episode of the Inorganic Podcast, host Christian Hassold delves into a case study on the startup Crisp (gocrisp.com), which has successfully executed four acquisitions over the last 2 years. The discussion covers the company's background, the leadership dynamics, and the strategic rationale behind its inorganic investments. The episode serves as a case study to demonstrate what good M&A looks like in an early to mid stage SaaS company and what features of M&A targets companies should be thinking about at that stage. As a part of the discussion, Christian dives into some of the deal specifics and the economic benefits to Crisp based on opinion and publicly accessible information.

Takeaways

- M&A could be as effective as traditional sales, marketing, and product investments.

- What problem is Crisp solving and why is it important

- Background on Crisps substantial financing and debt rounds

- What kinds of M&A has Crisp executed and why

- How the deals Crisp has executed have likely helped fuel their growth

- What can other startups learn from Crisp's approach to M&A

- Order of the kinds of deals a company might do is a consideration in building the M&A muscle in an early to mid-stage SaaS company

- The startup ecosystem often underestimates the value of M&A

Chapter Markers

0:00 Introduction

03:19 The Case for M&A in Early Stage Startups

05:14 Crisp's Company Profile

08:28 Pre-conditions for M&A in Early Stage Startups

13:37 Breakdown of Crisp's Four Acquisitions

20:37 Crisp's Acquisition Strategy

22:01 Financial Case for Crisp’s M&A

24:28 Analyzing the Order of Crisp's Deals

26:37 Reflecting on Crisp's Strategy

28:10 Conclusion

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Episode References:

https://www.linkedin.com/in/aretraasdahl/

https://finance.yahoo.com/news/crisp-raises-50m-series-b-140500449.html?utm_source=chatgpt.com

https://www.sec.gov/edgar/search/#/ciks=0001818100&entityName=Crisp%252C%2520Inc.%2520(CIK%25200001818100)

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Episode Outline

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