Every year, we welcome several Management Trainees that get to work on five exciting and business-critical projects throughout a year. So what sorts of projects do they get to take part in? We have talked to Axel, one of this year’s Management Trainees, about his experiences working on an acquisition project with the M&A department.
This blog post was first published on our Swedish blog in January 2020. Read the original article here (link to post in Swedish).
In this blog post, Axel Pers, Management Trainee in 2020, takes us through his first projects.
Curious to know more about the Management Trainee project? Visit our Career pages and read more.
Project in the M&A department
Visma has seen outstanding growth over the past 20 years. One of the reasons behind this growth is Visma’s strategy to acquire other companies through so-called acquisitions (often referred to together with the sister concept of Mergers, which leads to the abbreviation of M&A).
The purpose of each acquisition varies, but common for all is the intention of enriching Visma’s product and service offerings, for example through new technology or new markets.
Seeing as M&A is such a big part of Visma’s success, I was therefore interested in taking part in this process and strategy during one of my trainee projects.
In the third project of my Management Trainee period, I was, therefore, given the opportunity to be part of Visma’s M&A department.
Analyse potential acquisitions
Visma buys about 20 companies every year. However, not all companies that we review result in a transaction, which is why we are constantly working on a pipe with potential acquisitions.
During my project, part of the work was analysing the companies in this pipe. The first step was to review the company’s finances and tech stack, to determine whether these companies were of actual interest to us.
In addition to this, I have also been involved in the process of evaluating companies that are of interest, and that has been moved to the prospect stage. Here, I have evaluated factors such as due diligence material, created presentations of potential acquisitions for the Board, and listened to pitches from companies that actively want to get new owners.
All this has been done in close collaboration with our M&A Director, Sindre Talleraas Holen.
Evaluate potential companies
It quickly became clear to me during the project what Visma values in a company. We want to acquire prosperous companies that certainly would have been doing good on their own, but that has even greater potential as part of the Visma family.
To ensure this, we always carry out a comprehensive due diligence process in which we, among other things, investigate commercial, financial, technical, and HR aspects of the company.
Based on this, a valuation is then made to reflect what we found out during the evaluation process. The valuation is often based on comparable previous cases and a great deal of experience from those who have a lot of experience with this process.
To make it comparable, we only work with relative valuation models where we look at multiples such as EV / sales and EV / EBITDA (in this case EV / EBITDALCE, but that is another story. Send me an email if you want to hear that story too).
We rarely work with absolute pricing, something that was often the case in finance courses at University. To exemplify, pricing usually plays a crucial role in how much of the company’s products are offered via the cloud and often linked to how much of their revenue is recurring (so-called recurring revenue).
There should also be a clear logic about why an acquisition is good for Visma. For example, it can be strategic and aim to reach a specific market, or we see great opportunities for cross-sales between a product we already have and the one we want to acquire. A clear and solid logic often means that we are prepared to pay a little more for a company.
An exciting project
What I find most exciting about M&A at Visma is that M&A is not our core business. It is rather a complement that makes it easier for us to carry out our core business, which is software.
Through the work of the M&A department, we gain access to people skills, markets, and technologies that would otherwise have taken much longer to access.
Considering we are a software company, we do not buy only to sell a couple of years later. We buy to manage and make it part of Visma. Companies acquired today will remain in the Visma Group well into the future and there are great opportunities to continue working with them even further ahead.
Are you curious to read more about what it’s’ like to be a Management Trainee in Visma? Visit our Visma Life category page to get insights into the many exciting opportunities and projects, and get to know our current – and previous – Management Trainees. You can also visit our Career pages.