Overcoming Deal Fatigue with Persistence and Positivity Leads to Optimal Outcome

The Situation

Sandy Rowe and Gary Conley founded Interware in 1995 after realizing early on the power of the Internet and how it could provide a highly productive platform to deliver innovative solutions that achieve their mantra of “Making government more efficient for all of us.” As Sandy and Gary were approaching retirement and began discussing the next chapter of the business, it was important for them to think about not only their employees, but also their daughter, Nikki, who played an important role in the successful operation of Interware and was still early in her career. Furthermore, maintaining the culture they built at Interware was one of their highest priorities. They wanted to ensure the team was taken care of and that their customers would continue to receive the same standard of service. With retirement in their sights and a liquidity event on the horizon, Sandy and Gary hired Ascend after recognizing our team’s knowledge of the space, tailored approach, and commitment to integrity through work with another client that they had been familiar with. We agreed to take on the challenge of balancing their goals with what would be beneficial for Nikki, the culture, and the Interware team by shepherding them through the entire lifecycle of the transaction:

• Organizing and preparing the company for a sale including a bottoms-up financial model, detailed cross-sell and upsell analysis for each buyer, KPI deep dive analysis, and positioning and marketing materials
• Conducting outreach efforts by developing a bespoke universe of prospective buyers and facilitating communications with each group
• Creating a competitive environment to maximize price and terms
• Soliciting and negotiating letters of intent
• Managing the due diligence process
• Liaising with the buyer’s advisors to close the transaction

The Strategy

Interware is at the intersection of GovTech and FinTech, providing highly sought-after integrated solutions to help local governments monetize payment processing, expand addressable markets, and provide nice growth and uplift. With this in mind, Ascend cast a wide net focusing on three types of buyers — (i) PE firms with a software focus; (ii) GovTech and FinTech strategics with a payments interest; and (iii) International players interested in getting a foothold in the U.S. Ascend produced multiple sets of tailored marketing materials, recognizing the crucial role of painting a vivid picture for each prospective buyer group in order to effectively showcase the company’s unique value proposition.

The Execution

The strategy generated an enormous amount of interest with thirty parties submitting indications of interest and three submitting preemptive offers. We worked to create an environment that was extremely competitive. While initially one of the offers looked promising, and we went far down the road with deal negotiations, ultimately it was not the right fit considering Sandy and Gary’s situation-specific objectives. The challenge then was going back to the other two parties to explain the situation, confirm interest, and determine the best partner for Interware.

The Results

The extra effort was well worth the wait as both parties were still interested, with Avenu emerging on top, representing a highly strategic combination. The deal closed in 60 days with better terms than any of the previous offers. More importantly, Avenu was the ideal cultural fit for Interware’s impressive team and Nikki’s future with the company. The CEO of Avenu, Paul Colangelo, said, “This was the smoothest transaction and a very strategic deal for Avenu and its customers. Our state and local governments were asking for a payments solution that we could not provide — we were leaving a lot of revenue on the table, not compliant with many RFPs, and more importantly missing the opportunity to help citizens engage with their state and local agencies by streamlining processes. Within six months of partnering with Interware, we’ve closed over 50 new opportunities providing governments with a centralized solution to maximize their efficiency while shaping a more robust citizen experience.”

The Ascend Advantage

This is a story of how persistence and positivity pay off. When the first offer didn’t work out, Sandy and Gary experienced deal fatigue which can be a normal, albeit stressful part of the process. They built Interware from the ground up — investing their time, energy, and commitment year after year. Working side-by-side with our clients and facing the challenges together is an integral part of our approach — we were always in their corner, providing optionality, and helping them see past tough moments. Through artful positioning of the situation, we were able to meet all of Sandy and Gary’s objectives, including those that had not yet been previously identified.