Jola was setup such that we would be ready to transact at any time. We didn’t know the exact date and we didn’t want management distracted from growing the business. So;
- We operate a 3-year rolling financial plan, re-forecast quarterly for cash flow purposes. The first 12-months is the budget, which is fixed in April, followed by a 24-month outlook. There is a new draft 12+24 every January, finally signed off in March to start in April. In my experience operating only a 12-month budget and writing a business plan just when you need an IM is a mistake. We re-define and hone our strategy every year but this tends to be more about emphasis than direction. Our fundamental strategy has not changed since 2016 when we pivoted the company into mobile data. Our overall approach makes the production of an Information Memorandum much more straightforward.
- We are paperless. This is really important for Due Diligence. All our IP is documented, and we had all our contracts and service agreements completed and checked by lawyers in the first year. We resist non-standard agreements, even down to insisting on our own NDA. If we have to amend our terms it is recorded and done via an addendum, A buyer’s lawyer is going to have to read everything in DD and very often the seller pays for this, so by minimising exceptions we cut out a lot of time and cost. We opened our data room the day we started Jola with £50k in 2014.
- We made ourselves known to the market and started building relationships with PE very early. We focussed on specialist TMT Private Equity because they ‘get’ technology, won’t wince at the multiples and will help with origination of deal flow for a buy-and-build strategy. We talked to credible analysts like Megabuyte and were very open with them about our numbers and strategy. Some PE firms won’t do minority investments and some won’t do secondary-only so I found it saved time to be upfront about our intentions when approached by PE firms. Receiving offers from PE and growth funds is very affirming for both the strength/depth of management and the general and financial health and strategy of the business. However if you are immature in these respects but still want to raise money you could consider a syndicate (sometimes called deal-by-deal) arrangement. This only really works for a minority stake and you will still need an IM, but the due diligence, process is much lighter and shorter.
- They say good advice is cheap but there is some very expensive bad advice out there too. For TMT Corporate Finance advice and deal assistance there are only a few in the UK I would recommend. My last deal was 2012 so to bring myself up to date I asked people I trust and respect about their recent experiences. This was invaluable. Above all we made sure we had the best CFO we could afford. We only needed someone part time when we weren’t transacting and we found the best CFOs were often plural anyway. Supported by Pinsent Masons, our CFO and I did all the heavy lifting on all deals, shielding the management team as best we could. We short-listed corporate lawyers for their track record and it was a bonus if they had worked for some of the buyers on our shortlist and knew their redlines and ‘gives’ on the SPA. Three legal firms bid for the work.
- Most processes take around six months and we knew it was important not to lose focus and miss our numbers in that period. We didn’t want to make our investor nervous or give them a reason to try and chip us on the agreed price.
Jola is a mobile data aggregator and MVNO, part of the Wireless Logic Group, but channel-only and independent, which means that we offer services from all the major UK networks and hundreds of networks globally. We have been selling mobile data to the channel since 2014 and we understand the pain points of our partners and the needs of their end-users in each vertical market. Over time we have developed a unique portal, that gives you the control and visibility you need to manage global SIM estates. Control you can even extend to your customers. We have also developed unique hardware solutions that save our partners time, helping them create a great customer experience, maximise their margin and minimise costs for their customers.
There is high demand for mobile data from your existing customers. It is an easy product to sell, provision, support and bill. We have partners who have doubled the value of their business, increased their ARPU and reduced churn by focusing on mobile data.
To find out more, request our Partner Pack.
