I had another look atthe slide deck and have some more comments and queries.
Refer to slide 15 regarding the four stated M&Acriteria, extracts from that slide in bold below, these are my queries.
Positivefinancial impact: US$16.25m (A$22.6m) Purchase Price represents circa 3.1xUS$5.2m CY21 estimated sustainable ARR
Why would CS sell for3x ARR (I don’t often hear of ARR as the metric, its usually earnings/rev or sales).
Also its an “estimated sustainable ARR” – what is that? Seems like a way toinflate the figures.
If you were running a successful business, why sell atall? And why at such a low “estimate”?
The Overview states: ClearSlide is currently asubsidiary of Corel Inc. which purchased ClearSlide approximately 3 years ago. Firstly there are 14 companies called Corel Inc, so that doesn’t help(https://www.bizapedia.com/us/corel-inc.html)
And why after 3 years have they sold CS off?
Complementarytechnology: ClearSlide brings technology: content and voice analytics,clone your closers; integration with Gong; AI "Best Time"capabilities for automated email campaigns; Sales Journey autologging email andmeeting info CRM; Web Conferencing without a download.
I don’t know about each and everyone of these tech components,but my comments on what seems familiar to me are:
-Automated emailsending at optimum times - seems pretty low tech, not sure how much I’d pay forthat
-Autologgingemails – my inbox and sent box does that, seems low tech also
-Webconferencingwithout download – Ahhh that is not great either – Zoom, Teams, Skype,Facebook, Bluejeans all do the same thing
Can anyone expand onthis other the other bits of tech and why you would pay for them?
People:ClearSlide was the early market leader in Sales Enablement. Experiencedmanagement, product and gotomarket team providing footprint in California,Texas, USA and Canada.
Flags here for me are:
- “earlymarket leader” – is it still? Is it a real and genuine current market leader?
-Footprint inCalifornia, Texas, USA and Canada. This is odd, California and Texas are in theUSA? No provinces mentioned in Canada. Seems like the extent is threelocations, California, Texas and somewhere in Canada. Either there is some kind of brain-fart by the author or there is some marketing jamming going on.
-Mostimportantly I can’t find the number of staff they’ve acquired. Is it 5 peopleor 5000? Are they actual Devs or just non-producing middle managers and supportfunctions like HR, Accounting, PR etc? What are the synergies? What is thepayroll cost?
Complementarygo-to-market strategy and customer base: Sustainable core of circa 500+customers
This is a flag for me also, how can youhave a “core” of 500+ customers. What is the actual number? 501 (which is 500+)or 50,000 (which is also 500+).
Overall:Still a HOLD for me, but after what looks like arushed acquisition without much detail and a frankly pretty incongruous “powerpointpresentation” I’m going to keep a closer watch on this company and what it isdoing. But also, I thought (and still think) City Chic was an absolute SELL andI would’ve been wiped out if I took a short position. So maybe don't listen to me and definitely DYOR. Marketing, hypeand average slide decks can fool a lot of people. This one has gone up on my watch list.
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