This episode of the Zinnov Podcast – M.A.D. Valuations series, touches upon how Private Equity partners and CXOs of companies can engage in a meaningful way to create tangible, long-term impact.
The Hyper Intelligent Automation space has been abuzz with Mergers & Acquisitions over the past 18 months. Companies are leveraging M&A in the Automation space to gain newer capabilities while strengthening existing ones, while future-proofing their businesses against unanticipated disruptions. Nintex is one such major HIA player to have received a fresh round of funding worth USD 2Bn+ from the Private Equity company, TPG Capital. To throw some light on what this deal means for Nintex’s accelerated growth journey, how this will speed up its ambition of reaching a staggering USD 20 Bn+ valuation, and how CXOs of PE-owned companies can leverage the assets and resources available to them, we sat down with Eric Johnson, CEO of Nintex.
Zinnov’s Praveen Bhadada, Managing Partner, converses with Eric to unbundle the nuances and intricacies of working with a PE player, Eric’s first-hand experiences of leveraging PE firms to grow Nintex, and the traits necessary for a CXO to make working with a PE partner a success. Tune into this video podcast and take away interesting and insightful food for thought.
Praveen Bhadada: Hello, everyone, and welcome to an all-new episode of the Zinnov Podcast – M&A series, the one-stop-shop where you learn about all things Mergers & Acquisitions in the global technology ecosystem. I am Praveen Bhadada, Managing Partner at Zinnov and I’ll be your host for today.
Mergers & Acquisitions have become a staple for technology companies, with announcements of new deals flying in from all corners of the ecosystem. This has only heated up since the early part of this year, specifically in the Hyper Intelligent Automation (HIA) space, where companies have leveraged M&A to not only strengthen their capabilities but also future-proof their businesses against disruptions, like the ongoing COVID-19 pandemic.
Fresh off an acquisition by a major PE player, TPG capital, for a staggering $2 Bn+ plus, I have with me today, Nintex’s CEO, Eric Johnson, who has helmed the company over the last seven plus years from strength to strength. From growing Nintex’s sales by six times in a period of seven years, to maintaining a customer retention rate of an impressive 93%+, Eric has taken Nintex to greater heights.
But what are the best practices that help PE-owned companies to reach higher valuations? What are the different aspects that a CXO of a PE-owned company needs to be cognizant of? Eric will help us answer some of these burning questions on this podcast today.
Welcome, Eric. It’s great to have you one more time on this podcast series.
Eric Johnson: Thank you, Praveen. Great to be here and looking forward to this discussion. I hope we can help a few people out.
Praveen Bhadada: Perfect. Sounds good. So, let’s just dive right in. First of all, many congratulations on the investment round from TPG and such a great testimony of the strong foundation on which you’ve built Nintex over these years, and you’ve truly become a dominant player in the Hyper Intelligent Automation world.
If you just look at the journey, the last seven-eight years that you’ve been with Nintex, you’ve literally engaged with three very large Private Equity funds, like TA associates, Thoma Bravo, TPG, and all of that. It’d be good if you can decouple the PE world a little bit for our audience – Who these firms really are? How do they get the money they invest in companies like yours? And more importantly, how do they generate returns for their investors? If we can give a little bit of perspective on that, Eric, to get started, that’ll be awesome.
Eric Johnson: Yeah. So, I’ll be happy to give you my perspective on the Private Equity universe, especially as it relates to technology and software investing.
I would say that the universe is large these days, and really what fuels the opportunity for these Private Equity funds to be so big, particularly if you think of pension funds, you think of college endowments… These pools of capital are extremely large and they’re very global and they need to have homes and some of what they want to invest in, they’re going for higher returns.
And so, when you look at the opportunity to invest in a privately-held software company, that’s an opportunity to have high growth. And so, these Private Equity investors, first and foremost, the investors that they have providing them the capital are fairly large-scale, sophisticated investors. The investment sizes they’re making are typically in the minimums of tens of millions.
In fact, some of the funds will literally have five to ten limited partners. And those could each be investing hundreds of millions. And so, large, sophisticated pools of money coming in. And then these Private Equity funds themselves tend to be in it a little bit of variety of who they are, but they’re generally looking for companies that have a little bit of maturity.
So, you’re not typically in a Private Equity fund going to be investing in a cash-burning, early-stage start-up. You’re typically investing in an organization that has been around probably for several years, north to 10, 15, 20 years. But organizations that have been around the proven market-fit, they’ve generally created a business model that can at least be moderately profitable and could be very profitable.
In the Private Equity universe, oftentimes they’re financing these purchases partly with equity, the dollars they bring in from their limited partners. But they’re also able to put some leverage, some debt on these businesses because they do have the ability to be profitable. Given the factors of what they’re trying to do, it sort of goes after a certain type of company. In large parts, the Private Equity funds are looking to have these businesses grow. So, some organic growth combined with typically some inorganic growth or acquisitions that the business will then go deal with. And they’re trying to generally help them be a little bit more efficient. That’s not always true. Sometimes they’re investing in a business that already has a very high level of efficiency. So, it’s more of a growth-oriented thesis.
All the PEs are not the same. Different PE funds have different strategies. They have different ways that they work with the management teams. As an operator, what you’re really trying to do is find the right Private Equity sponsor to match what you’re trying to do in the business in that season. And that can vary in the lifecycle of a company.
Praveen Bhadada: Awesome. Lots of follow-on questions.
At last count, there’s about $2 Tn worth of capital waiting to be deployed from the Private Equity channel. So, the dry powder is huge in the market today. We are realizing Eric, that a lot of PE firms are getting interested in technology…in the software business.
Historically, they’ve invested in real estate, on all industrial businesses, really legacy businesses. But suddenly, there’s this rush around technology and software. So, what’s really happening in that part of the world? Why are PE firms interested in technology in general?
Eric Johnson: It just comes down to the growth opportunity.
If you look at the growth rates in our industry, just at Enterprise Software as a whole, our industry grows much faster than the general economy. And so, if you look at the ability to create outsize returns or alpha for their investors, you have to be where things are growing.
And so, in a world where real estate valuations are at a record high, most asset classes are very high, but most asset classes don’t actually grow very much. If you think of something like an Industrial segment or a Retail business, growth rates are in low single digits.
And the technology industry, in many of our categories, growth rates are 10%, 15%, maybe even 20% in certain categories. So, investment dollars want to follow where the growth opportunity is. We’re probably the best growth opportunity of all industry segments in the world.
Praveen Bhadada: Interesting. That’s a very interesting point of view because if we generally look at the Private Equity world, most of the PE firms would turn over their companies in a period of three to four years. Some funds are a perpetual kind of roadmap, but most of the funds will turnover companies in a three to five-year period.
So, when you talk about growth and when you look at this timeframe, are PEs able to generate that growth momentum in such a short period of time. How do they look at growth in this timeline? What comes at play, when they mix and match these two distinct scenarios?
Eric Johnson: Well, first off, I’d say in our industry three to four years is actually a really long time. And in a lot of industries three or four years, sounds like a short investment horizon. And in some other segments, the PE funds may own companies for seven to 10 years. I think in our industry, change is so rapid, and growth rates – back to the growth comment – are so high, that in three to four, five years, you can make a lot of difference in a business. And if you think about what’s generally happening, sometimes a PE is investing in a business that already has really good momentum, and then they’re basically trying to capitalize on that and help management even accelerate it, maybe add some incremental things to the strategy.
And in other cases, sometimes PE is investing in a business, that’s, maybe, having some challenges and they see an opportunity to help the business execute better, or maybe modify the strategy, maybe do some different acquisitions.
And so, there’s a range of what’s possible. But I would say given the pace of change in our industry, in three to four years, with good, aggressive activity, you can make a ton of difference in what a business looks like.
Praveen Bhadada: On that note, let’s talk about Nintex a little bit. And you, of course, got a new PE owner last week. You had many other options, like taking the company IPO or selling it to one of the sponsors, selling it to a strategic buyer, like a tech giant, you could have gone for VC fund. Why did you make this particular choice versus all the other choices that were available for you?
Eric Johnson: Yeah, well, I’d say, first of all, these decisions are always a combination between the management team and the investors. And in our case, we had one investor who was at clear majority in Thoma Bravo, and we had another investor that was a clear minority, but pretty substantial, in TA Associates. And then we had some smaller investors and management on the rest. Part of what you’re trying to do is align everyone’s interests and ultimately, the Private Equity funds have their limited partners. And so, they’ve got to make sure that they’re doing the right thing for their investors. Obviously, management cares a lot about the company and the team and the customers and the partners. And so, you’re trying to find what that happy situation is. In the case of Nintex, we have been making really good progress, and if I look at the last three and a half years or so since Thoma Bravo has been our majority sponsor, we more than doubled the size of the company. We’ve doubled the number of capabilities that we can offer customers.
That’s a massive increase in use case coverage of what we can do. Part of that was organic innovation. Part of that was really good acquisitions, and we’ve made the company on a dollar basis about four times as profitable. So, we’ve made a ton of progress; we have really good momentum. Our customers are super happy with us. And then we were looking at our strategy of what we wanted to do for the next few years, and how could we solve even more problems for the customers? How could we show up even more often? And that comes down to, we want to invest more in product innovation, go-to-market, and we want to continue to do more acquisitions and probably bigger acquisitions.
And with that in mind, when you look at being a public company, the reality of being a public company is it can be great, but you want to make sure you have a story that at that point is really clean, super understandable, and that you’re not going to have to do hard things and investors might struggle with.
Many of the public company investors are very short-term focused. And so, if we were to go out and try to do an acquisition that maybe long-term, we thought was right, but short-term might be a little hard on profitability or may hurt our growth rate, public company investors don’t love those. Private Equity company investors have a little longer time horizon they’re thinking through. And so, if management and the PE fund align, we can be more aggressive on M&A. We have a few ideas that are all into that category. So, I think from our strategy perspective, we felt like for the next probably two or three years, it would be better to be private. We can make more progress faster and it would be better for our customers. And ultimately, the company would be bigger, even stronger, more strategic, and more valuable. So not only would it be good for current investors, it’d be good for what our investors would be making in the future.
And it also just so happened to be that the Private Equity valuation environment is really strong. So, I think the current investors with this current deal of TPG, TA is going to be moving on out. But they’ve just sustained a tremendous return, far in excess of anything they could have originally hoped for. So, they are super happy about that. Their limited partners will be very, very happy, and feel really good about what we’ve done now. The other option was to sell to a strategic buyer. We just felt like with what we’re doing and where we are, and the things we’ll do over the next few years, we would just be leaving a ton of value on that.
I also think as we get a little further in our strategy, we’re just more appealing. We are about two-thirds of subscription revenue, about 90% recurring in total today. Give us another two or three years, we’ll be even a higher percent subscription. We’ll have a few more product capabilities. We’ll consolidate some of the market. That type of company will be very, very appealing to all types of investors. And so, at the end of the day, Praveen, it’s partly about matching up strategy and about value creation. And we felt that the right thing to do is to make more progress on strategy and to partner up with TPG and continue on as a private company.
Praveen Bhadada: Excellent. Amazing. I think Nintex’s growth over the last couple of years has been phenomenal. You’ve been the poster boys in the Automation space. If you look at the PE fund, there are about a hundred large PE funds… We’re looking at technology and software investments. When you were thinking of raising money, did a lot of these PEs approach you, or were you selective in reaching out to a couple of them where you felt the fitment was? How does this really work out for companies looking to raise money through this channel? Who finds whom or how does the mechanics really work?
Eric Johnson: There are different ways it can work. What I’ll explain is how we’ve worked in, in my personal bias. That doesn’t mean it’s the only way. Certainly, other people probably had success with different routes, I’d say. As we got more notoriety, over the last few years particularly, when Thoma Bravo came in as our lead investor, that, and our scale and, achieving the rankings we have with your firm and others, we got more interest in. So, we certainly would have, month-on-month, nearly every month, at least a handful of firms reach out.
I would say that because of our scale and the level of value we felt we were achieving, we had a pretty good idea of the smaller set of firms that would likely be potentially good partners for us in the future. One of the things I did over time specifically, is put some effort into making some of those relationships and sustaining them. I give a lot of credit to TPG. Nehal was awesome at initial outreach more than a couple of years ago. And then he and I just kept the dialogue going, and he would share some perspectives on what he was seeing in the market. I would share some perspectives on what I was seeing and the progress we were making. And we really built a great relationship in a two-plus-year period. And the more we talked, the more we could see what’s possible. There was just a very small number of firms that made sense to us.
We also have some really good investment bank relationships. We noted in our press release one lead bank and another bank that helped us, lead Bank of America, Merrill Lynch, and then, Macquarie, who’s also a small investor in ours. On the TPG side, Morgan Stanley was constructive and very helpful and does a lot for them.
That banking universe also does help, but I would encourage all the CEOs and CFOs to really think if Private Equity is a good option for their business. I would encourage making those relationships over time, and some of that could be with the lead banker too that you work with, some of that could be on your own, but that investment in relationship building then creates understanding and confidence.
So then when you are ready to potentially do something, there’s a lot more ability for that Private Equity sponsor to really lean in and be aggressive. And you want to be in a position where you’re picking versus not picking. And I felt like we were in a good position to where we had some really awesome choices.
And I can’t tell you just how enthused our whole team is to be partnering up with TPG. I mean, the resources, the strategic nature, the integrity of the team, these are just really, really, really good people. And I’m also really happy that Thoma Bravo has decided to keep some money in, plus make a material new investment. And so, it will be a very significant minority investment. My team and I were like, wow! How blessed are we? We got the best of both worlds. We have TPG. We have Thoma Bravo. We’ve got an awesome management team throughout every level of this company. So very, very thankful.
Praveen Bhadada: Perfect. That’s awesome. So now the new PE firm is on board, what happens next? How do the first hundred days really look like as the CEO of this company? How do you get involved with TPG on a day-to-day basis? Give us a sense in terms of how the first few days with a new partner really look like.
Eric Johnson: Yeah. So, one of the first things, I would say, just advice for everybody, especially anybody in the COC. We have three core tenets here and our first one is ‘deliver on our commitments’ – follow through. The second one is ‘don’t wait,’ the third one is ‘operate with respect and consideration.’
That ‘don’t wait’ philosophy really applies when you get a new Private Equity sponsor. So, you’re going to be working together. Let’s say you’ve negotiated an agreement. Then you’re going to sign a share purchase agreement. There’s typically a little gap in our world between signing the share purchase agreement, which is effectively when you’re going together and close because you’ve got some regulatory reviews and there’s just some mechanics to get all the way to close.
So that period might be 30 to 60 days. One attitude would be, ‘Hey! We’re not closed yet. And so, I’m going to keep doing what I was doing, so I’m going to wait.’ Waiting is a really bad idea. So, the approach is you don’t wait and you really try to get deep with the investor right away. Get aligned on strategy, enhancements, or refinements you’re going to make for the next season of life and, start getting after it.
So, I would say, in our specific case, we have a standing weekly meeting every Friday with a few of the TPG key leaders. So, we’re working with a few of my key leaders. And then throughout the week, we’re engaging on different things. They had done a bunch of research in the process. And so, we have a strategy day next week. And so even prior to an official close, you’re already starting to do some planning and you’re already starting to think through what’s possible in the future.
The reason that’s so important is then when you close, you can hit the ground running. You can start to actually enact some of your strategies early in the horizon. The thing about our industry is it moves so fast. Every day that you’re not making progress, somebody else is getting ahead of you. And so, every day you can make progress, you’re getting ahead of somebody else. And so that’s the thing here. We just try to get super-fast and it’s exhausting. I’m not going to lie – there are times when I think myself or the team needs a little oxygen, and that’s what a little vacation here and there is for. But go fast, get right in there right after close, you just get off to a sprint. It’s like a sprint marathon. That’s the way I like to describe it.
Praveen Bhadada: I love the ‘don’t wait’ philosophy and the fact that you’ve already started deeply discussing the strategy for the next season, even before the deal is formally closed. I think just getting the head start probably is important there.
Where do PE firms come in handy? Do they actually help you make deals? Do they help you find the right talent, or do they just give you the money and watch the show? What’s the level of involvement? What specific areas do PE really unlock value for the portcos (portfolio companies)?
Eric Johnson: It really depends. There’s a wide spectrum of what PE funds provide. There are some PE funds today that are still kind of what they were like 30 years ago, which is really just pure investor, where they are just investing behind whatever management thinks is best. And they’re operating more like external investors and if provided things work, they leave people alone. I would say the world has shifted a little bit to Private Equity funds having more resources and having more value-add.
If I look at the last few experiences I’ve had with PEs, each of the PE funds had some value to directly add. If I think about partnering up with Thoma Bravo, I would say there are really two things that Thoma Bravo has been really helpful with us over the last few years. One is they have a really good engine around acquisitions and that includes everything from sourcing to financing, to diligence resources, and modeling. And so, the ability to see the deal flow and help us find things was very constructive. So really good partnership on the whole acquisition side of the house and that’s one thing a lot of these funds can do, and Thoma Bravo certainly has really good capabilities there.
The other thing that Thoma Bravo brought to the table is that this operating partner model, where they have ex-CEOs and CFOs join the board as operating partners. And I’d say they’re more active board members than you would typically see.
And in my specific case, I kind of looked at the talents and experiences of each one. And then I would align them to areas where I thought we had some opportunity to leverage their experiences and perspectives and relationships to help us out. Whether it was some aspects of our go-to-market strategy, things we were trying to accelerate in our product organization, or something related to customer success, or improving some of the narrow, but very strategic professional services capabilities we have…in all those areas, those operating partners were able to add some of their expertise and relationships, and definitely helped us.
Generally, we come up with a lot of ideas and own the outcomes, but it’s great to have someone else who can bounce things off of, who’s got an awesome experience that can add some ideas, can validate, can challenge. I’d say we are there with Thoma Bravo now. TPG is a really large firm. I’ve already had some exposure at TPG. There’s a human capital group and they have a leader of that group who is a world-class person and he used to be one of the co-heads of Spencer Stuart in the US. And so, there are resources in that group around talent acquisition that can help answer questions like how do you go recruit the right executives? How do you build the right team?
There’s a world-class comp expert to work with. They’ve got pricing experts on staff. And so, the way to think about it is that in a lot of these firms, they have many in-house consulting firms. And so, you’re getting a bunch of people who are top-tier experts in their domain, who you can leverage for one or more areas.
And sometimes, it might be getting a little help from them and then also still having a third party, but they refer you to one that they’ve used a lot. And so, my encouragement to any of the CXOs that you are spending time with, or might be listening to this podcast today is, to take advantage of the resources.
You need to make the decision on what’s right for your company. It’s probably not all of them, but where you have those things, it goes right back to that ‘don’t wait’ philosophy. You’ve got to move fast. You want to stay ahead of your investors, you want to stay ahead of commitments you’ve made and objectives.
The more you’re ahead, the more momentum you have, the bigger the outcome’s going to be, the happier the investors are, the more enjoyment you’re going to have to come to the office every day. The more you fight these things, you start getting behind your objectives. Then this is where Private Equity universes can go really bad, really fast. And so, I would just say, stay ahead.
Praveen Bhadada: What would you say is your biggest learning in terms of what are the easiest parts to work on with the PE? What are the tough parts? Do you need more collaboration and a lot of involvement from both sides? Can you generalize the easy parts and the tough parts of working with a Private Equity firm?
Eric Johnson: Well, I’d say probably every situation could be a little bit different. I would say one part that’s like the center of the fairway… I think, at least in my experience has been really productive. Whether it was TA associates, initially when I came here, Thoma Bravo, and now, just starting up with TPG. I think the whole zone of acquisitions… I think that’s really a thing that most of these Private Equity funds today… they want to buy a great company or a good company or a high potential company, and then they want to build around it. And part of the build is to go out and buy some other companies.
And so, I would say most of them have really good capabilities and experience in acquiring companies. And so that’s an area that I think works… You can align with it really easily. You get into other areas, like for example, go-to-market. Everybody always wants to sell more. Everybody always wants more ARR (Annual Recurring Revenue) or more bookings. That’s a universal desire. Now exactly, how to do that and what opportunities exist and how to do that most efficiently… Well, that is a different thing. And in some cases, it might be really clear and easy, but in a lot of cases, it’s not. You may have a situation where a business has a lot of opportunities. In our specific case, our market is really big. We have multiple components of our platform. You’re always making these decisions like, what’s the one, two or three to go focus on, can’t do everything, but we have a lot of choices, right? So, we have a problem of plenty of choices.
In other scenarios, you may have a business that’s maybe in a smaller vertical market. Maybe there aren’t as many choices. And so, it’s more about how do you refine it? How do you get execution even better? So, I would say that whole figuring out how to accelerate go-to-market and drive more new bookings and ARR growth that in my experience is probably one of the more complicated points of aligning with the Private Equity fund. Everybody wants it, but the way to get theirs is not always quite as clear.
Praveen Bhadada: When you think of a CEO of a company, like in this case, you are the CEO of Nintex and you’ve built obviously excellent relationships with the Private Equity firms and the individuals from those firms. How would you extract the traits that a CEO… the qualities that a CEO should really have to be able to build a very strong relationship with the PE firms, and the operating partners, and the investment partners in those firms? What should the CEO really have?
Eric Johnson: Here’s what I would say. I thought about this a lot now as I’ve done it longer. And I was at a company two companies ago where we were Private Equity-owned by a massive Private Equity fund. So, I spent probably close to 15 of my years have had some sort of Private Equity ownership of my career. So roughly two-thirds of it. I would say from a CEO perspective, if you’re going to be successful with Private Equity and choose to partner up with one, I would say, a CEO who’s open, who’s really open to feedback and, always desiring to get better, is probably a CEO who’s going to have more success.
A CEO who’s more direct and confident enough that when it’s not working or something’s off, that they can be really clear with their Private Equity team members and partners that they’re working with. Those two and then have a high pace of urgency. At the end of the day, the Private Equity funds… they’re all a little different, but they’ve got a time horizon.
They’ve got investors that they’re making commitments to… and the way they’re going to get and continue to get more capital coming in from those limited partners is that they’re going to deliver great returns. They’re going to deliver distributions over time on a schedule that’s somewhat predictable.
And so, that urgency from the CEO’s side is really clear. And so, I would say if I had to boil it down to three things, it’d be urgency, it’d be openness, and it’d be directness. I would say in my experience, where seeing some CEOs when not so great with Private Equity and ended up typically being either really unhappy or getting exited from the business, it’s typically situations where maybe they weren’t as open to the feedback or making change. They weren’t as open to using the resources. They weren’t clear when it wasn’t good, and here’s, ‘Hey, this is not good.’ This is a place we’re having a problem. Here’s what we’re going to do about it, and then being open to some input.
And then third, maybe not having that urgency. I think if you’re a person who just kind of wants to work in your own universe and just like, kind of have the money, but no collaboration, you better hope you’re crushing those numbers. And I’d say the only way that that ends up working out okay is if you’re just so far ahead of your numbers that… people love good numbers. But in order to get to good numbers, I would generally say, the three things I mentioned are going to increase your odds of getting to better numbers because you’re going to be optimizing your business and making good changes.
You’re going to be directly hitting on challenges, head-on and be open to solutions, and you’re going to be moving fast. So, if you’re not the person who wants to do those things, and I would suggest don’t partner up with a Private Equity.
Praveen Bhadada: Makes sense. I think that’s a very interesting point. Talk to us about CEOs who are looking at Private Equity investors for the first time. You had this advantage that you’ve done this for 15 years, so probably you were in a little bit of a comfort zone in terms of knowing how the entire scenario will unfold. But people who are trying to partner with PE firms for the first time, what would be your advice to those kinds of companies and the CEOs of those companies?
Eric Johnson: Yeah. Well, I mean, I think first I’d bring it back one step even higher, which is, what are you trying to do with the business and really what is the right type of investor structure? So, think through the strategy of where you’re trying to take the business and also the agenda of whatever your current investors want to do, whoever those may be.
Sometimes you may have a business that’s more privately held or maybe it’s had venture investors. And now it’s got to do a little different scale. It’s thinking about that next event, maybe it needs a liquidity event. So, let’s say, you decided that Private Equity is the right zone, you and whatever current investors you have. Then I would say, really think through given what the strategy is for the business going forward or where you think the optimal strategy is, which Private Equity firms match that? Partly, it’s that bent between growth and profit, and even within growth, how much of the growth you’re going to go achieve is organic growth versus acquisition and inorganic-oriented growth.
Different firms have sort of different things they’re really good at, and that are their sweet spots versus how much of your play might be more of a profit expansion, you know, maybe some M&A, but it’s more of a – let’s grow profit play. There’s a whole range in there and there are different seasons of a business.
If I look at the last few years in our business, we had a real balance between growth and profit. We grew the top-line a lot, but we also grew our efficiency massively. Now in this next season, we’ve got the business to a place where we’re very efficient already. Now, what we’re looking to do is accelerate growth even faster, both organically and inorganically. So, I’d say, for this next season, for us, it was finding that investor who liked our level of efficiency we’re at, but really wanted to take advantage of the massive market opportunity. And so, my big advice would be for the CEOs who are evaluating their first Private Equity experience… it’s really picking the investor who’s probably got the right expertise and natural affinity for your strategy. And then also getting the one that’s at the right scale. I mean, there are different scales of Private Equity investors. There are Private Equity investors who are looking for companies that have an enterprise value of $200 Mn or less. And then there’s some that are looking for a billion dollars and less, and then you get into the zone like where am I now, or you’re in with people who are generally investing in companies that have enterprise value in the multiple billions, maybe even 10+. There are just different funds and firms that play in different areas.
Praveen Bhadada: Perfect. Thank you so much, Eric. I think this has been a truly delightful conversation. Not only did we learn about the PE players and how they really create value, but also about the perspectives and learnings that CEOs of PE-owned firms get access to. I’m really sure that our audience today would have a lot of takeaways, a lot of interesting thoughts and ideas in terms of how they can craft their own experiences in the Private Equity world. So, I really appreciate you taking out time, Eric, and our best wishes for the next season. We are rooting for you to get to the $20 Bn valuation as soon as possible.
I’m pretty sure that with the team that you have and the investors you have, you should be able to get to that point much sooner than anyone would expect. So really appreciate your time on this one. And thank you so much for all the insights that you’ve shared.
Eric Johnson: Hey, thank you Praveen. You know, I’m really proud of the team here at Nintex. We have just an awesome team at every level and the people that we partner with, you know, the various advisors and third-parties that we’ve been able to work with over time, have been a big part of it, and super excited for what we’re going to do together with TPG and Thoma Bravo in this next season. And like you said, the dreams are really big here. The market supports it, and I hope today that any of the CEOs and CFOs who are listening to the call hopefully got some value. I’ve had a lot of people be really kind to me on the journey and help me out. And I love to give back to the universe and wish everybody continued success.
And especially all of you at Zinnov, thanks for what you’re doing for this market. You’re really helping provide a lot of thought leadership. Thanks for your partnership, Praveen.
Praveen Bhadada: Thank you so much. Thanks, Eric.
Thank you everyone for tuning in to this episode of the Zinnov Podcast M&A series, the most sought-after destination for all things Mergers & Acquisitions in the technology ecosystem. Stay tuned for more such interesting episodes of pioneering leaders. We will be back soon. Till then, take care and stay safe. Thank you.
In this pilot episode of our Decoding Private Equity series, Pari Natarajan, CEO, Zinnov, sits down with Charles Phillips, Co-Founder, RECOGNIZE to discuss how IP-led services assets have created a niche, to attract private equity funding.
In this episode, Prankur Sharma sits down with Ben Tamblyn and Teresa Fisher to discuss the nuances of Process Intelligence and how it can bolster decision-making.