CV_Jan_22

AT YOUR SERVICE: XaaS Unified, advanced communications are truly coming into their own, with the global UCaaS market projected to be worth nearly $70 billion by 2028, according to research from Fortune Business Insights. As this market is projected to grow by double digits annually through that date, investor interest is very high. Well run, disciplined companies have a chance to benefit on both sides of a transaction. To win in the hot M&A sector for this booming segment, a unified communications company will need to ensure that the right metrics, data and operational measures are in place. Much the same as prepping at home for sale, maintaining and investing in these fundamentals will pay off once a potential buyer begins to conduct their analysis and due diligence. Here are five operational areas to address when prepping your UCaaS business for possible acquisition: 1. Maintain accurate records Just as any entity needs to keep meticulous records around financials such as monetary investments, capital costs and revenue numbers, your business will need to maintain as precise operational records as possible. Keeping these files updated will help you document the developmental steps in your company’s growth, enabling you to track any value added to the business along the way. Equipment, expanded resources and proprietary technology all significantly increase the value of a target company should they be considered for acquisition. By performing this sort of due diligence internally, the process can run more smoothly once a potential buyer begins auditing your business. 2. Transition to cloud-based technology At this stage of the game, cloudbased infrastructure is a must. Buyers in the UCaaS space aren’t looking to buy something they immediately need to bring up to speed; a potential acquisition target needs to possess this innovative technology already. Combining technologies is enough of a challenge once an M&A deal has gone through; target companies will lose appeal if they are carrying outdated infrastructure. Ultimately, it’s worth the investment to get your technology up to speed with a focus on innovation. Once set at an optimum level, your cloud-based infrastructure can then be nurtured and maintained through SaaS software to simplify updates to that infrastructure over time. 3. Show projectable revenue In being considered for an acquisition, your business’s current financial state is obviously a key component to be studied. But beyond the present, a buyer company wants to have as clear an idea as possible what kind of profitability it can show down the line. Ideally, your financials should include five years of projections, as well as information on how the projections were determined. While it’s understood that unforeseen circumstances can throw a prediction off at any point, it’s still advantageous for a target company to be able to forecast revenue going forward; doing so can inform critical decisions for interested M&A parties. 4 Ensure tax compliance Of all the last-minute liabilities that can derail an active merger process, a tax-related infraction is one of the most common but also one of the easiest to avoid. Tax laws in the telecom space can be complicated and challenging to follow, especially for collaborative businesses focused on growth. But since tax compliance is a guaranteed topic during the acquisition process, it is critical that a system be put into place to head off any potentially damaging oversight. For larger businesses, this can mean instituting a specialized tax department within their organization; for smaller companies and startups, partnering with a respected tax advisor is worth the investment. With the expected continuation of hybrid work and distributed workforces and the trend toward collaboration tools to support them, UCaaS will continue to be an area of significant growth. Those businesses in the space positioning themselves for future M&A consideration can significantly help their case by investing resources into reviewing and optimizing these operational factors in advance. o Brent Maropis is CEO of Rev.io. By Brent Maropis FOURS WAYS TO PREP YOUR UCaaS BUSINESS FOR M&A 18 CHANNELV ISION | JANUARY - FEBRUARY 2022

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