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Bootstrapping to Exit in Israel: Eli Sasson, Founder of Minicom (Part 7)

Posted on Wednesday, Feb 6th 2013

Sramana: How long did it take for people to start engaging you once you had decided to sell the company?

Eli Sasson: It is hard to say because we did not start the process at a particular date and time. We gradually moved into the decision and gradually made it known. I would say that the entire process was a year before we were purchased by Tripp Lite.

Sramana: During the year you operated the company with the intent to sell it, was your team aware of that decision?

Eli Sasson: There were people who knew more than others. My CFO knew everything because the process was transparent to him. Other senior management knew that I was working on selling the company. It was not commonly known throughout the company.

Sramana: Was it complicated to manage the people who knew that you were trying to sell the company?

Eli Sasson: No, it did not impact my senior staff.

Sramana: What was the negotiation process of selling the company like?

Eli Sasson: The negotiations lasted about four months. Tripp Lite made the initial price offer. It was not a term sheet, it was a letter of intent. We then based our negotiations based on that letter. Once we agreed on the letter, we had another two or three months until signing and closing.

Sramana: What was your revenue when you sold?

Eli Sasson: We were doing over $20 million per year when we sold. From 2008 onward, our revenue did not increase dramatically.

Sramana: Was there a significant delta in the initial price that Tripp Lite offered and what you ultimately sold the company for?

Eli Sasson: There was somewhat of a delta. We definitely countered their offer. We were able to get an increase of 30% from their initial offering price.

Sramana: What did you do during negotiations to get that price increased?

Eli Sasson: This is something that is very important. The level of transparency we provided to Tripp Lite justified our negotiating stance. The more information we provided, the less ambiguity there was in negotiations. That reduced risk in the perception of the buyer. They had calculated their price with certain risk factors. I was able to get the risk factors lowered during the negotiations. I had to first understand their concerns and then respond to them with data that could lower their risk factors. That was the key. Communication during negotiation is very important.

Sramana: Thanks again for sharing your story. I really like bootstrapped companies, and I want to congratulate you on your success.

This segment is part 7 in the series : Bootstrapping to Exit in Israel: Eli Sasson, Founder of Minicom
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