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Astound: Sell-Side Case Study

A cross-Atlantic sale follows a strategic investment and a six-figure OEM deal

Epitomizes the value of our full spectrum strategic partnering approach

Astound Inc., a Toronto-based provider of leading edge solutions for web conferencing and collaboration, faced the daunting task of competing with bigger and better funded competitors, such as WebEx. Astound retained us to help the company raise its next round of funding and/or find a merger partner that would help it leapfrog the competition. A key reason that Astound selected us was because our standard process was tailored to cultivate a range of strategic partnering options.

Our hallmark process paid off for Astound – in spades. Our efforts resulted in a six-figure OEM partnership, a $5 million strategic investment, and, ultimately, a company sale to Genesys Conferencing. Genesys is a publicly traded French company and the largest independent audio conferencing vendor in the world.

We led the effort to create the differentiated positioning and messaging to highlight Astound’s assets in the best and most appropriate light for prospective partners. We then created a set of business plans, proposal documents, and marketing presentations geared toward igniting partner interest. Concurrently, we identified and prioritized a list of strategic partners and financial sources, then approached each with our trademark one-to-one custom-tailored marketing materials.

We gained face-to-face meetings with nearly 20 companies and engaged in conference calls with several more. Our first success came in the form of a $5 million strategic investment, the largest since the company’s founding. Introductions to other companies led to revenue-generating business partnerships, with the most notable being a lucrative OEM deal with a synergistic public company. This deal provided Astound with an up-front six-figure cash infusion and provided a commitment for ongoing royalties.

The crowning event of our twelve-month Astound engagement was the negotiation and closing of the company sale to Genesys. Due to the magnitude of the transaction, the deal required shareholder approval and also required us to draft a 100-page fairness opinion, which we summarized in a well-received presentation to Astound’s board of directors.

Importantly, all parties were extremely satisfied with the transaction, a sentiment exemplified by the following management quote from the Genesys press release announcing shareholder approval of the deal:

“We are excited by our shareholders’ strong support as demonstrated by their vote to merge our businesses. This is a significant step in creating a global powerhouse in the conferencing industry, with unique geographical coverage and a strong customer base. Further, with the acquisition of Astound, the Group’s technological leadership will be enhanced within the fast growing Internet segment of our industry.”

Clearly, this was an industry-shaping transaction as it combines the world’s largest independent audio conferencing company with the leading technology in web conferencing and collaboration.

The deal value at announcement was approximately $65 million.

Using Strategic Partnering To Build and Realize Value
We approach each client engagement as a value-building process, not an M&A event. We expressly maximize the potential from every strategic partnering contact, opening the door to a full spectrum of strategic relationships. Read more

Customized Marketing Messages Make Your Company Stand Out
Our unique, highly customized way of presenting opportunities to prospective partners has repeatedly reaped tremendous rewards for our clients. Read more

Astound Acquired by Genesys after Two Prior Value–building Deals
A lucrative OEM partnership, a $5M strategic investment and a $65M company sale closed in a 12-month period. Read more

Evolve Raises $10M from Sierra Ventures
Evolve went from this round to a successful IPO instead of an impending cash flow crisis. Read more

Architecting and Executing Merant’s Strategic Partnering Initiative
Merant, a public software company with $120M in revenue and new management, retained Stratagem to put process in place and close strategic transactions.
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