ParaSun Acquired by Uniserve
Parasun is a New Westminster, BC based company devoted to providing Broadband network operators with software solutions and support services they require to deliver high quality, full-service Broadband-based services in their markets. Their motto is “Building Better Broadband.” because everything that they do is designed to make Broadband services more accessible, reliable, robust and affordable. Parasun’s customers are typically independent, regional, cable companies looking to provide Broadband services to their end-user customers, being principally residential homes.
Advantage was the only institutional investor in Parasun. All of the other investors were either founders and management, or friends and family. Advantage invested $500,000 in 2004 for the very targeted program of expanding the company’s marketing presence in the US, its principal market.
Advantage and Fund Manager David Raffa was a Board member of Parasun prior to the formation of BC Advantage Funds and knew the company very well. He was instrumental in a restructuring that cleaned up the company’s share capital table and balance sheet prior to the company being funded by Advantage. When Parasun was brought forward for investment by Advantage, the company was in good shape and ready to move to the next level.
David continued on with the Board of Parasun after the investment was made, and a second Advantage representative, Dr. Basil Peters, was invited to join the Board. Under the leadership of Parasun’s exceptional CEO, Steven MacDonald, and with the guidance of its founder and initial Chairman, Barry Carlson, the company grew revenues by more than 260% from the time Advantage invested until the time the company was sold in 2007, and moved from below break-even to becoming a very profitable company.
When Parasun approached Advantage about investment, a process lead by Barry Carlson, Barry was looking for more than just investment. He was looking for an investor who would be aligned with achieving an exit within a period of three to four years and, more importantly, one who had considerable experience in mergers and acquisitions and would take an active lead in the process. David Raffa has had considerable experience in leading M&A deals and had recently lead the successful sale of ActiveState Corp. to Sophos PLC as Chairman of ActiveState. Together, David and Basil agreed to take on full responsibility to achieve a successful exit for the Parasun shareholders and accomplished this goal with the sale of the company to Uniserve Corp in 2007 for a total of approximately $14 million, providing a return to Advantage of 5.5 times the original investment.
David and Basil worked together with Steven to bring the business plan current, prepare the presentation materials, build the due diligence package, prepare the valuation analysis and prep the company for presentation. They built the funnel of prospective buyers, organized the presentations, conducted the negotiations and over-saw the legal and accounting advisors from documentation to close. Steven and his team presented the company and the business opportunity to the potential suitors, spread the vision and answered all of the operational due diligence questions. More importantly, Steven and his team continued building the company throughout the year long process it took to complete the deal and during the year subsequent to closing, achieving continued strong growth throughout the period yielding the Parasun shareholders the full earn-out portion of the sale price.
The successful sale of Parasun was the result of a strong partnership of entrepreneur and financier – Steven and his team built a great company under the tutelage of its founder, Barry Carlson, and David and Basil brought in timely capital and M&A expertise to achieve a great exit. Everybody won. Noted Seven MacDonald, “The addition of David Raffa and Basil Peters to our Board was a crucial step in our development. The relationship between the Board and management was highly productive with David and Basil working close with us on strategic issues while allowing us to focus on operations. David and Basil brought considerable experience and insight into strategic matters and served important roles as mentors to our young management team. During the sale of the company, they built a funnel of potential acquirers and verified the legitimacy of every potential acquirer before involving management in the sale process. This allowed us to be a part of the sale process while leaving us the time necessary to continue to grow revenues and EBITDA. David and Basil delivered an outstanding result for the shareholders of Parasun and we are thrilled to have had them involved.”