Published on February 07, 2024
Joe Khoubbieh is the Chief Investment Officer at Valsoft, one of the most prolific acquirers of software companies in recent years. Valsoft, founded in 2015, has acquired 95 companies across various industries and geographies. The company is headquartered in Montreal, Canada and has offices in the United States, India, Luxembourg, and Australia.
Khoubbieh joined Valsoft in 2017 and has led the acquisition strategy since then. Under his leadership, Valsoft has scaled rapidly, acquiring 25 companies in 2023 alone. A key part of Valsoft's acquisition strategy is to pay sellers 100% cash upfront. This approach provides liquidity and flexibility to sellers while allowing Valsoft to focus on long-term growth.
In a recent interview on Built to Sell Radio, Khoubbieh discussed Valsoft's acquisition philosophy. When evaluating potential targets, he analyzes customer satisfaction, sources of revenue, and team quality. Khoubbieh believes happy customers and diversified revenue sources indicate a healthy, sustainable business. Additionally, he wants to ensure the team is capable of executing the company's strategy post-acquisition.
Structuring the seller's role post-acquisition is also crucial. Khoubbieh aims to provide sellers an engaging position that utilizes their skills while giving them upside through earn-outs. This incentives sellers to stay on board and continue growing the business.
Compared to private equity buyers, Valsoft takes a different approach focused on decentralization and autonomy. Khoubbieh believes too much corporate oversight can destroy entrepreneurial cultures. Instead, he empowers management teams, giving them the resources to accelerate growth.
Post-acquisition, Khoubbieh concentrates on improvements through commercialization, international expansion, and implementing best practices across the portfolio. He also must manage founder egos, promoting collaboration between leaders of acquired companies.
When financing acquisitions, Khoubbieh scrutinizes the debt level to ensure it doesn't burden the business. He also stands firm against re-trading, believing it erodes trust between buyers and sellers.
Overall, Khoubbieh's disciplined yet founder-friendly approach has allowed Valsoft to become a leader in acquiring and scaling vertical market software companies. His insights provide a unique glimpse into contemporary acquisition strategy.
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