In this episode of the Tech M&A Podcast, we sit down with Rick Saarimaki, CEO of CDP Communications, a software company that has spent more than 40 years converting high-volume print streams into accessible PDF and HTML documents that can be viewed online. Rick, who has been with the business for over 30 years, first took CDP to market with a generalist advisor. A year into the process, it was clear the firm didn't understand what CDP did, and the sale stalled. CDP came back to market with Corum and closed an all-cash exit to a long-standing business partner, the same buyer that had approached the company twice before.
Rick reflects on why Corum's focus on technology and fintech companies led CDP to switch advisors mid-process, why a buyer that couldn't get a deal done the first time came back with a higher price, and what surprised him about selling the company itself instead of its products. He walks through a diligence process run mostly by the buyer's internal team, with outside technology partners reviewing CDP's source code. He also covers the questions still open after closing: the peg, the holdback, and cash flow under two different accounting methods. He explains why legal and accounting bills run higher when you're not repeat business. Rick is staying on with the buyer and still runs other companies. He closes by crediting Mark at Corum for stepping in at the moments that got the deal done.
Takeaways
Pick an advisor who knows your space: CDP spent a year in market with a generalist firm that didn't understand its business, and Corum's focus on technology and fintech companies is what got Rick to switch.
Selling the company is a different skill: Rick found that a team used to selling its products isn't used to selling itself, and that was one of the surprises of the process.
Expect technical diligence: The buyer relied mostly on its internal team and the deal room, but it brought in outside technology partners to review CDP's source code.
Watch the peg and the holdback: After closing, Rick is still working through the peg, the money held back, and how cash flow plays out across two different accounting methods.
Budget for time and fees: The process took longer than Rick expected, and he found that lawyers and accountants price accordingly when they know you're not repeat business.
A banker changes buyer behavior: The partner that couldn't close a deal in the earlier process came back with a higher price once Corum ran the sale and, by Rick's account, behaved differently the second time.
Let someone else absorb the friction: Even with a long-time partner on the other side, Rick valued having an advisor handle the day-to-day dealings, with CDP stepping in only when issues escalated.
Timestamps
00:00 – Introduction
00:47 – Rick Saarimaki and CDP Communications
01:15 – Switching advisors mid-process
01:54 – Selling the company, not the product
02:14 – Buyer diligence and source code review
02:38 – The peg, holdback and cash flow
03:11 – Time and professional fees
03:42 – Choosing the acquirer
04:12 – A returning buyer and FOMO
04:26 – Advice for CEOs
04:56 – Life after the exit
05:29 – Final thoughts