How to Build a Global M&A Machine with Local Expertise Part 2

How to Build a Global M&A Machine with Local Expertise Part 2

Kison: So if we brought in the local expertise, we got comfortable doing that deal, it’s probably the best thing. Any other big risk items of just like executing the deal and making it successful—that why I should or shouldn’t do the deal—in terms of risk?

Sindre: Yeah. You’re going in a first international deal.

Kison: We're just branching out into the market.

Sindre: We’re still talking about the German deal?

Kison: We're talking about the German deal.

Sindre: We are. Okay. There are risks by default. There are tons of risks in M&A. You need to get comfortable. You're not able to diligence everything.

Kison: It’s being blind to risk—but then being like exponentially more blind ‘cause it’s in a whole different country.

Sindre: Yeah.

Kison: Different culture—and that's—I'm trying to learn from you. You teach me that. I'll walk away happy.

Sindre: You’re in different continents. When you’ve done 350 deals, you always have that. It’s a balance. You need to understand the market. You need to understand the key DD topics. On the other hand—analysis paralysis. You need to know what’s important and what’s not important. You can talk yourself out of any deal. That’s the easiest way to do it. Easy-peasy. Then you don’t do M&A. It’s actually pretty easy.

There is always some issues with all deals. Even the slam dunk ones. There’s always something that you can use in argument not to do a deal. There is always risk, but I do think if you do a thorough DD, then you do it with open eyes. Know the risks, and then you say, okay, this is actually still worth it.

Kison: How do you like keep the cost of diligence low? I feel like that's the other flip side—'cause everybody will tell you due diligence—even the point you made earlier is like you’re spending more, even looking at hiring a big-name consulting firm to help with diligence. Look at me, I’m Indian man. I'm cheap. I'm just like—it’s in my DNA to not spend money on things that you're not gonna get money back on.

Sindre: Oh yeah.

Kison: Which happens if you're gonna do a deal and all of a sudden you're like, we can't do this deal. Or you get deal fever, then where I’m invested in and feel like I have to do this deal because I’m already financially invested into it.

Sindre: As well—we are a trade buyer. We're an industrial company. Are we concerned about fees? Absolutely. That’s also why we have an in-house FDD team doing that in-house. I look at the returns on that versus using an external—

Kison: What do you call it? FDD?

Sindre: Financial DD.

Kison: Oh, financial—FDD. Okay.

Sindre: We have people who can do financial DD. We have three in-house M&A lawyers. So to compare that to having external lawyers—that’s a big difference. Then we have tech people only doing tech M&A. Also a big difference. And then we have the whole operation team that's helping us out on commercial aspects, etc., etc.

Kison: Economies of scale. Sound great. Can I borrow your team once in a while?

Sindre: We can discuss an hourly rate.

Kison: I’m gonna go invite them out for a beer here.

Sindre: Absolutely. No—yeah, it’s a three for—three for two, two for three. We do 30 to 40 deals per year. So that’s also when you calculate your IRRs on having people instead of consultants on this—that of course helps a lot.

Kison: Okay. I have a feeling—and this actually putting it out there—like my current approach, I do go on those platforms like Upwork and other platforms and talent, and we'll hire freelancers. Or referrals. I’ll go talk to folks like I know, like you, and tell you, “Hey, I’m trying to save some money.” And you're like, “Oh, I know somebody that just left a role and they're just freelancing right now.” Perfect. That’s been my biggest wins.

I know maybe if I was doing the international deal, like I’ll do a little more legwork to find the resource. Is that fair to say? Is like a good approach for...

Sindre: For first timer?

Kison: Yeah.

Sindre: Absolutely.

Kison: Yeah, that’s totally legit.

[00:48:00]

[00:49:00]

Kison: That makes sense. In terms of how the strategy has evolved—I guess clicking down into how you operate—you buy so many companies. What happens to these companies? Because a lot of them still carry their same name. They’re not Visma-this, Visma-Norway, Visma-Denmark. They’re all operating their independent brands. I’m wondering—is this like some of the software roll-up companies, a lot of which are popping up from Canada and new ones—as long as one big behemoth out there that don’t really do a lot of integration? They sort of do some pretty light-touch stuff on the backend and then let them run. That’s the playbook basically—it’s just arbitrage the valuation or scale. What does that look like for you?

Sindre: I wouldn’t necessarily compare us with the ones you were throwing out there.

Kison: That’s just an example I’ve seen. I’m not saying I—

Sindre: I think we are inherently different. But in terms of that—call it—soft integration approach, I agree. We also have that. Even though we were probably 100 business units when I took over as Head of M&A, we've probably done 200+ deals since then, but we’re still 180 or 190 business units now.

So it's not fair to say that we don't integrate and we don’t merge.

Kison: So some can merge.

Sindre: So we do absolutely do that. When it makes sense, we do it. But I do think if you look at it holistically, we like to buy entrepreneur-led businesses—like, that has a driven entrepreneur—to still have that on board.

Kison: Founder.

Sindre: Yeah, founder. Five years after, between 70 and 80 percent of all founders—they’re still on board.

Kison: What?

Sindre: And I do think that’s pretty spectacular. So that's—

Kison: How do you keep them?

Sindre: Yeah.

Kison: I’d be out of there. I’m like, done.

Sindre: Yeah. And I do think that soft approach in terms of integration—we don’t call it integration by the way, we call it onboarding—for me at least, it sounds much better.

But having said that, they still have a very strong ownership feeling—that they still own their own company, even though it’s actually owned by Visma. Might be an earnout for one year, three, or five years.

But the reality is we give them a lot of go-to-market freedom. But then we are extremely rigorous on a few but very specific elements. First of all: financial reporting—fifth working day, every month—previous month’s reported full P&L, full balance sheet, full cash flow statements. That’s super important.

And after all, we are working with accounting and reporting and tax systems. So it’s a bit—we should eat our own medicine. You’re able to work with the companies much more hands-on than you are if you are getting the previous month on day 20 in the next month. It’s already old. Having that fifth working day every month gives you actually fresh data that you can steer from. We are very data-driven.

So that’s one element. Tech is the other element—we’re extremely rigorous. Security—there is so much. You would know this as well, that cybersecurity—very important. I would even argue probably tech and cyber—that’s the single biggest reason why we pull out of deals.

If you don’t believe that there is the right vision for the tech, we will pull out of the deal in a heartbeat. We are almost religious on this. It doesn’t need to be all fancy and super multi-tenant cloud from day one, but you need to have that vision. You need to have the belief, and you also need to have the organization to do it.

You don’t believe—you don’t have that—then we’ll be quite upfront about that.

Kison: Can I ask you questions like how you guys operate over there at Visma? One reason I’m asking is I’ve talked to so many corporate development professionals, and it’s interesting—you can have a PE-backed company, and they really are maybe just consolidating the industry, and there’s some sort of direct correlation of this corp dev team’s performance to the growth of that company revenue-wise.

And then you have a larger strategic where a lot of it’s like supporting the leadership, like we talked about, and really facilitating that. And then, I guess structurally too, of just—there are strategics that almost operate more like private equity firms in terms of the way they’re structured. They’re sort of like a good financial discipline—investments in, investments out.

Because a company like yours—you’ve done both. You’ve made some exits.

Sindre: Yeah.

Kison: And then there’s ones that are very just strategic—extremely like moonshot bets—that it doesn’t make any sense till 10 years later when they can tell everybody, “I told you so.” Where do you sit in that world? Because I’m confused. I’ve tried to do my diligence and at first I thought you guys were like the typical strategic, but then the more I looked at it, I’m like... kind of not.

Sindre: It’s a legit question. We do look at us as a trade buyer. We do look at us as a strategic buyer. But at the same time, we are also maybe more opportunistic than your average trade buyer.

So if you look at the divestments we've done historically, that’s all been—we’ve divested our services, our BPO division, we’ve divested our IT consulting division, we’ve divested the hosting division. We have divested retail software. The things we’ve divested have been because we want to focus on really being that—call it—SMB ERP cloud champion in Europe and Latin America.

Kison: That makes sense.

Sindre: I think we're there now.

Kison: Can you tell me a little bit about that? What prompted the company to go focus in that specific area and divest those assets?

Sindre: I can, of course, only relate to the last 16 years, but if I look at it—I say, where have we performed best? And it’s that SMB accounting, payroll, invoicing, tax—that’s been the business unit that has always performed the best and been that North Star. So—and continues to be. Right?

For the American listeners, that would typically be Intuit. So in many ways we’re sort of an Intuit of Europe. That business is just inherently much better than a services business, and it’s valued thereafter as well. Having that very clear strategic vision that we've had—then HG as well, they’ve been a good owner. We've been working on this together and having that strategic mindset in really nurturing that part of Visma. And now actually, that's still the lion’s share of what we're doing.

[00:52:30]

Sindre: We—Visma—have the biggest network of B2B software SaaS entrepreneurs globally. And there's almost 200 of them out there in the Visma ecosystem that are working and working together, collaborating, measuring, comparing: what type of KPIs are you following? Okay, why are you doing so much better than I am? Okay, what do I need to do here to increase that? Et cetera, et cetera.

So we always see that—if you look at the companies we acquired in '24—back again to the type of businesses we acquire, good businesses, great businesses I would argue. So they performed almost a rule of 50 on average. That’s second to none. It’s really great businesses.

And adding the fact that it was 33 businesses that we acquired last year makes that pretty unique, pretty solid.

Kison: What was the rule of 50?

Sindre: You take the growth rate...

Kison: Yep.

Sindre: Plus the margin—the cash EBITDA margin.

Kison: Yep.

Sindre: That ideally should be above 40 or better.

Kison: Yeah.

Sindre: Yep.

Kison: So when you’re getting close to 50, I would argue it’s pretty, pretty good.

Sindre: Yeah.

Kison: So you’re taking a rule of 40 and saying 10-meter rule of—

Sindre: Yeah, exactly. So it's a rule of 40 metric.

Kison: Yeah.

Sindre: But the rule of 40 metric is then closer to 50.

Kison: Yeah. I like that.

Sindre: And still we see—after one year—because of this, because of you entering into this environment, we do see quite a big shift upwards on that rule of 40 scale. That you’re actually growing faster and you’re earning better margins.

Kison: Because why?

Sindre: Because all—just becoming, just starting measuring the right KPIs. There’s so much inherently low-hanging fruit in these businesses. That when they come into a professionalized system, with a professionalized board, you start—really start to push on the right things.

And that’s also one aspect where we are pushing a lot is around adding the right competence to the various companies. And this is, again, no companies, no process is the same. So if there is a company struggling or scaling super fast, maybe you should have someone who has scaled a software business before. Maybe you should add HR competence. Or if it’s a company that has a great product but struggling a bit with go-to-market, channel, whatever it is—then you make sure to add that competence.

Someone who’s—we have entrepreneurs in this group that have grown their companies from zero to 150 million euro ARR. There’s a lot of competence throughout the group.

Adding that mix of competence to the various companies on the board level—I do think that is very important.

[00:54:00]

Kison: It's interesting. You have things that you described that are very like typical strategic. Then you got elements that sound very private equity-like as well. A couple things I noted that you mentioned for retainment of leaders was earnout—like one to five [years] is pretty common. You also mentioned just reporting accountability right off the bat—getting your numbers in within five days a month. And the other piece you mentioned—developing the community between the leadership. That they're there really comparing notes and getting value from each other as a part of the Visma community. That sounds pretty good.

Sindre: Yeah. Particularly now, right? You even see AI is a big thing—how to monetize on AI and how to use it. And we have several hundred AI experiments all across the group.

Kison: What’s like the thing—I’m trying to... I’m still going back to our deal—like the offer you put on the table to buy our company. I forgot, it was like just under 10x, so it's like pretty good.

Sindre: You need to prove your growth rate though.

Kison: We got that. Don't worry. We got a great FDD team—they're gonna make sure. I was thinking about all the stuff I could buy with it, 'cause I could get that house on the slopes and probably a nice SUV to get up and down that mountain and stuff. How do you convince me?

The money part is good, but I'm still—I can easily get this thing to another 20 million ARR. Yeah, that's no problem. Like, why don't I wait till then? I'm just, I'm wondering like, how do you negotiate and get me to want to sell now versus—like I said, I'm always optimistic. It's part of the DNA of being a founder. Well hey, why don't we talk in a year? I'll show you. I'll prove out that we're gonna get another 40% growth this next year and you're gonna have to pay even more.

Sindre: Oh yeah.

Kison: Oh yeah. Like how do you convince somebody otherwise? Like timing's now versus...

Sindre: As I mentioned, there are quite a few examples where we've talked to companies for a decade plus. And that's typically the case. I'm not ready to sell. And that's a perfectly legit answer. That's your prerogative as a founder. It's, “I'm not willing to sell right now. Sorry. Let's talk in a year, six months, or five years.” That's your prerogative.

Still, I do believe that we have a pretty compelling story to entrepreneurs. And we see that the Visma story actually resonates very well to entrepreneurs across all geos. And it's still that, okay, so you have your own company, you continue to run that, but you still have this giant corporation behind you that will help you, that will support you, that will give you access to the most valuable network of like-minded MDs, experiments, whatever it is that's going on in your own world. Adding that and the fact that it might have an earnout so that you actually are having a bit of that upside yourself—so that one is—

Kison: One is the earnout. Is that earnout gonna bridge? 'Cause in my head, I'm like, hey, if I wait another year, you have to give me 30–40 million dollars more.

Sindre: We've had companies that have earned way more on their earnout than on the initial EV, of course.

[00:57:00]

Kison: What do the general terms on those earnouts look like?

Sindre: Again, based on what type of deal you are looking for and what type of company you’re looking at. This one—10 million ARR—you could even use the rule of 40 scale. In Visma, we’re still very interested in earning money as well. So I do believe rule of 40 is fairly good, the metric.

Kison: I’d be right at 50 if I got 40% year over year.

Sindre: Yeah.

Kison: Plus 1 million net—that puts me at right at 50.

Sindre: Yeah.

Kison: So the higher rule of 40, the higher multiple you get—that's a bit of the dynamics.

Sindre: Typical.

Kison: Clear on the earnout—on the earnout, of course, not on the initial.

Sindre: That will be the carrot for the earn component.

Kison: Yeah, that’s what I’m kind of wondering. But you need to find that price that’s equally painful. And then what's good with us as well is that we allow them to also reinvest in Visma. You never get Visma shares as part of the initial, but as a working entrepreneur, you're allowed to reinvest.

Sindre: But why not? Why won’t you roll our equity? That seems like the most simple thing to do.

Kison: Yes. I would say yes and no. And there are things in doing that, and it’s a dilution effect, etc. etc. By letting them reinvest—more or less the same thing.

Sindre: Yes. As a founder, you're owning a small stake of something big instead of a big stake of something small. But you still have to nurture that ownership feeling, and I do believe that is important. So exactly how you do it, I'm not—there are ways that are tax efficient that you can work around—but to have that reinvestment possibility into Visma, I do believe that’s of course also important.

Kison: That's a good point. So you want them invested in—I got a private equity firm. I’m just being frank with you here. I got a PE firm that’s reaching out and talking to me. They're offering the second bite of the apple, like you say. You got one fund that's willing to do a minority recap. You got a buyout fund that'll let me sit back with 20–30% of the company. These options look pretty good. How do you compete with those?

Sindre: What we're bringing to the table is still pretty unique. I do have a strong belief that we have a historical track record as well that shows that yes, you're growing faster, you're showing a more scalable operation, margins are getting better, and you still have that ownership feeling—you’re still running the business as it was your own.

Kison: Is that part of what you bring into the picture—here's kind of how we would actually support you to grow where you as a founder are visioning going?

Sindre: Yeah, that's of course part of the picture.

[01:00:00]

Kison: I know I'm like role playing with you right now and I know there’s not enough context to make it like very detailed, so I’ll give in a little bit there. Yeah, I can sense that’s where you’re going for, but there's—we haven’t been talking very long other than this podcast. Do you see that happen a lot where like some company you approach and they’re talking to the PE firm, blah blah blah?

Sindre: If you look at our competitors, that might very well be a private equity. That’s just the way it is. And I do believe we offer something else. I do believe with sort of the Visma equity earn components—but I would still—you know, we know what market price looks like and we’re not trying to be cheap. If this is a tier-one asset for us, it’s a tier-one asset for us.

Kison: I know it.

Sindre: Then it doesn’t actually get down to that last dollar. More important to actually get that deal over the line.

Kison: So it’s basically a total picture element—that even myself as a founder, one thing to look at is the dynamics of the deal, but then you’re approaching that against the total picture where, hey, if you’re offering a really competitive offer, a really competitive offer with clean terms versus…

Sindre: Yeah, there’s a lot of nuance. I would say a high degree of deal certainty as well. That is important, right? When you close 90+% of all your LOIs, I do think that number speaks for itself, to be honest. Wherever we don’t close an LOI, there has been something typically fundamentally different that has occurred during the due diligence phase.

Kison: And that happens.

Sindre: It happens when you buy a house and it happens when you buy a company. Something happens during the DD and… just nature of the business.

Kison: That’s why you do DD. You got great points. I think I’m in. I’m ready to sign a term sheet whenever you’re ready to send it over to me.

Sindre: It’s already in your inbox.

Kison: So I got just a couple topics left. One thing to know about Visma—the business was publicly traded in the early days. Around 2006, they went private. Can you tell me a little bit about what that looked like when the business went private and just specifically interested in just that relationship or ownership with private equity?

Sindre: Yeah. As you were alluding to, this is the only type of Visma ownership I’ve seen. I’ve seen of KKR and Hg and PIK and PE ownership angle to it. I’ve not seen Visma as publicly listed.

Kison: So you've seen the aftermath where it went public, then went private, then they’re anticipating going public again, and then it—

Sindre: Yeah, I mean…

Kison: Taken over by another PE firm, then went back to the original PE firm. So you could see some interesting PE drama.

Sindre: Absolutely. I wouldn’t necessarily like to call it drama. The red line in sort of the Visma PE ownership story is Hg. They were the ones delisting us and yes, they were then in a minority position, but they’ve always been there. They have definitely helped us in that context of being that counterparty that’s always—or stakeholder—that’s always been there for us.

Kison: This is going live, right? Listening? That’s why I’m testing you right now.

Sindre: Yeah. No, the reality is Nick Humphries and his team—I think they’re doing a great, great job. They have also acknowledged that letting the Visma management team do their job—that’s actually very important for a PE firm. So they’ve given us a lot of freedom in the same way that we’re giving a lot of our business units a lot of freedom as well.

[01:01:00]

Kison: What was the biggest win when working with a PE firm like Hg? What was the stuff that really wowed you—like, pretty impressed with the smart money here?

Sindre: Hg in particular—they are a tech investor and led by Nick Humphries who’s always been on the board and is the executive chair at Hg. Having that long-term vision, and particularly in an M&A context as well, they are of good help. We’re driving the agenda, but I do think having that support from the owners in driving that agenda and helping to nurture the M&A strategy—that has been a help. Great help. Absolutely. They are very tech-savvy.

Kison: They encourage you to do M&A. They know the industry. Is there anything they do—because all these private equity firms, I’m trying to be nice here—they all brag about having a value creation model. They have these big portfolio support teams, especially at this size. Once you're over like $10 billion AUM, they have a pretty sizable portfolio support, portfolio operations, whatever you call it, teams. And they’re all focused on value creation. They recruit a bunch of consultants—ex-consultants in there, bankers. Do you see that being value-add for you?

Sindre: Both yes. Hg—they have now a very good view on when to help us and when to leave us alone. So there's a good component there of like knowing when to leave you alone.

Kison: Yeah, that’s a good learning. It’s out to CEOs that are PE-backed. That’s kind of like the conundrum—it’s like, you need to push more growth, you need to cut costs, which is like a never-ending tale. But they think there’s a good point, there’s like a right—when it’s right to back away.

Sindre: Yeah, and I do believe Hg—they also have that long-term view. They’ve almost been a shareholder in Visma for 20 years. They know us fairly well. It’s fair to say they have that long-term view.

Kison: How does that work? Is it like in the same fund for that long, or do they change funds after a while?

Sindre: Typically, you also change funds. But they believe in you, so they keep going after investing in the company and adjusting.

Kison: Exactly. I would say it’s a bit of an elaboration or an expansion of the traditional PE model where you typically own an asset for 3 to 5 years and then sell it off. But every now and then, you stumble across very good assets that you actually don’t want to sell. And it’s almost like an evergreen sort of investment. And I do believe that model that Hg has applied with us—bringing along investors together with them—I do believe that for certain assets like ourselves, I do believe that has been a good strategy.

Kison: That’s played well. Sounds like it’s been a good relationship. Anything that’s been really impressive—things they’ve done to add value? A lot of things you described are very private-equity-like. Yes, we talked about earlier of the way you bring the leadership teams together and hold those kind of events and things like that. Part of me is curious too—because you’re just such a large company to be owned by a large private equity firm—where does that level of sophistication turn into? Because I get it when it’s like a small company and you’ve gotta be so hands-on…

Kison: And you’re sort of doing the M&A for that company. Here, nobody’s doing M&A for you.

Sindre: Yeah.

Kison: They’re watching you do everything and more of the sidelines. That’s what I’m curious—what does that look like for them to actually add value in a company to your extent?

Sindre: They know us very well. There’s no BS. It’s sort of straight shooters. And we can talk quite directly with them. And I do believe that since they know us that well, they also know where they can provide value and probably where they should leave us alone.

Kison: So don’t be an asshole. We’re constantly pushing for more. Probably a good sentence, good learning.

Sindre: Yeah.

Kison: That’s out to CEOs that are PE-backed. That’s kind of like the conundrum—it’s like, you need to push more growth, you need to cut costs, which is like a never-ending tale. But they think there’s a good point, there’s like a right—when it’s right to back away.

[01:06:00]

Sindre: Yeah, and I do believe Hg—they also have that long-term view. They've almost been a shareholder in Visma for 20 years. They know us fairly well. It's fair to say they have that long-term view.

Kison: How does that work? Is it like in the same fund for that long, or do they change funds after a while?

Sindre: Typically, you also change funds, but they believe in you, so they keep going after investing in the company and adjusting.

Kison: Exactly.

Sindre: I would say it's a bit of an elaboration or an expansion of the traditional PE model where you typically own an asset for three to five years and then sell it off. But every now and then, you stumble across very good assets that you actually don't want to sell. And it's almost like an evergreen sort of investment. And I do believe that model that Hg has applied with us—bringing along investors together with them—I do believe that for certain assets like ourselves, I do believe that has been a good strategy.

Kison: That’s played well. Sounds like it’s been a good relationship. Anything that’s been like really impressive—things they've done to add value?

Sindre: Hg in particular—they are a tech investor and led by Nick Humphreys, who's always been on the board and is the executive chair at Hg. Having that long-term vision, and particularly in an M&A context as well, they are of good help. We're driving the agenda, but I do think having that support from the owners and driving that agenda and helping to nurture the M&A strategy—that has been a help. Great help. Absolutely. They are very tech-savvy in that they encourage you to do M&A. They know the industry.

Kison: Is there anything they do—because all these private equity firms, I'm trying to be nice here—they all brag about having a value creation model. They have these big portfolio support teams, especially at this size. Once you're over like 10 billion AUM, they have a pretty sizable portfolio support, portfolio operations, whatever you call it, teams. And they're all focused on value creation. They recruit a bunch of consultants, ex-consultants in there, bankers. Do you see that being value-add for you?

Sindre: Both. Yes. Hg—they have now a very good view on when to help us and when to leave us alone. So there's a good component there of knowing when to leave you alone.

Kison: Yeah, that's a good learning. It's out to CEOs that are PE-backed. That's kind of like the conundrum—it's like you need to push more growth, you need to cut costs, which is like a never-ending tale. But they think there's a good point, there's a right time to back away.

Sindre: Yeah, and I do believe Hg—they also have that long-term view. They've almost been a shareholder in Visma for 20 years. They know us fairly well. It's fair to say they have that long-term view.

[01:08:00]

Kison: How does that work? Is it like in the same fund for that long, or do they change funds after a while?

Sindre: Typically, you also change funds, but they believe in you, so they keep going after investing in the company and adjusting.

Kison: Exactly.

Sindre: I would say it’s a bit of an elaboration or an expansion of the traditional PE model where you typically own an asset for three to five years and then sell it off. But every now and then you stumble across very good assets that you actually don’t want to sell. And it’s almost like an evergreen sort of investment. And I do believe that model, that Hg has applied with us—bringing along investors together with them—I do believe that for certain assets like ourselves, I do believe that has been a good strategy.

Kison: That’s played well. Sounds like it’s been a good relationship. Anything that’s been really impressive—things they’ve done to add value?

Sindre: Hg in particular—they are a tech investor and led by Nick Humphreys, who’s always been on the board and is the executive chair at Hg. Having that long-term vision, and particularly in an M&A context as well, they are of good help. We’re driving the agenda, but I do think having that support from the owners and driving that agenda and helping to nurture the M&A strategy—that has been a help. Great help. Absolutely. They are very tech-savvy in that they encourage you to do M&A. They know the industry.

Kison: Is there anything they do—because all these private equity firms, I’m trying to be nice here—they all brag about having a value creation model. They have these big portfolio support teams, especially at this size. Once you’re over like 10 billion AUM, they have a pretty sizable portfolio support, portfolio operations, whatever you call it, teams. And they’re all focused on value creation. They recruit a bunch of consultants, ex-consultants in there, bankers. Do you see that being value-add for you?

Sindre: Both. Yes. Hg—they have now a very good view on when to help us and when to leave us alone. So there’s a good component there of knowing when to leave you alone.

Kison: Yeah, that’s a good learning. It’s out to CEOs that are PE-backed. That’s kind of like the conundrum—it’s like you need to push more growth, you need to cut costs, which is like a never-ending tale. But they think there’s a good point, there’s a right time to back away.

Sindre: Yeah. And I do believe Hg—they also have that long-term view. They’ve almost been a shareholder in Visma for 20 years. They know us fairly well.

[01:09:00]

Kison: That’s what I’m trying to understand. Are they in the same fund the whole time or do they shift the asset from fund to fund?

Sindre: Typically, you also change funds, but they believe in you—so they keep going, reinvesting in the company, adjusting.

Kison: Got it. So they’ll roll it from Fund I to Fund II if they really believe in the asset?

Sindre: Exactly. I would say it’s a bit of an elaboration or an expansion of the traditional PE model, where you typically own an asset for three to five years and then sell it off. But every now and then, you stumble across very good assets that you actually don’t want to sell. And it’s almost like an evergreen sort of investment. And I do believe that model that Hg has applied with us—bringing along investors together with them—I do believe that for certain assets like ourselves, that’s been a good strategy.

Kison: That’s played well. Sounds like it’s been a good relationship. Anything that’s been really impressive—things they’ve done to add value?

Sindre: Hg in particular—they are a tech investor and led by Nick Humphreys, who’s always been on the board and is the executive chair at Hg. Having that long-term vision, and particularly in an M&A context—they are a good help. We’re driving the agenda, but having that support from the owners and helping to nurture the M&A strategy—that has been a great help. They’re very tech-savvy.

Kison: So they encourage you to do M&A? They understand the industry.

Sindre: Yeah. They encourage us. They understand the space. They’ve worked with many tech companies. Their pattern recognition and insights are useful. It’s not like they’re doing our job for us—they know we’re running things. But they’ve got the experience to be a sounding board or offer a nudge when it’s needed.

Kison: Do they bring benchmarking or portfolio connections?

Sindre: They have a great network. They understand when to lean in and when to stay out. They have this instinct for it. And to be honest, knowing when not to help is almost as important as knowing when to help.

[01:10:00]

Kison: Yeah, that’s a good point. Knowing when not to interfere—that’s actually a really good learning. Especially for CEOs out there who are PE-backed. There’s a conundrum—you’re always being pushed for more growth, more cost-cutting—it’s a never-ending tale. But having an investor who knows when to back off is huge.

Sindre: Exactly. And I do believe Hg—they also have that long-term view. They’ve almost been a shareholder in Visma for 20 years. They know us really well, and I think it’s fair to say they’ve got that long-term mindset.

Kison: That’s wild. Almost 20 years? How does that work? Is it like, in the same fund for that long?

Sindre: No, typically you also change funds. But as you said earlier, they just believe in the asset. So they continue reinvesting.

Kison: Okay, that makes sense. They just keep rolling it forward because they believe in the company.

Sindre: Exactly.

Kison: So that’s like a new model. They don’t need to do a full exit—they keep partial ownership, bring in new investors, maybe roll it into a new fund.

Sindre: Yes, it’s a bit of a deviation from the classic PE model. But for certain assets—assets that are delivering consistent performance with long-term potential—it works. I think Visma is a great example of that.

Kison: Yeah, it sounds like it’s been a very successful partnership for both sides.