You’ve spent the last decade (maybe even decades) building your business from scratch. The business loans, your mortgage, and your kids’ tuition are all paid off. You start to think about the future: “Do I have the time, money, energy, and know-how to take my business to the next level? What’s my exit strategy? If I were to sell right now, then would I be leaving money on the table? Who would I even sell to? My legacy is important to me—what happens if the new owners ruin the business?”
Sticking the landing is very important. If you botch your exit, then what was all that hard work for? Thankfully, you have Evergreen.
Meet Evergreen
Evergreen is a holding company that mirrors the enduring philosophy of Berkshire Hathaway: acquiring and nurturing businesses with a clear vision of long-term growth. But instead of buying up insurance, energy, manufacturing, railroad, and retail behemoths, the folks at Evergreen are focused on small and medium sized managed service providers (MSPs).
Evergreen’s mission is deeply rooted in the principle of preserving the legacy, culture, and operational independence of the companies it acquires. This approach not only assures business owners of the continuity of their life’s work, but it also emphasizes a people-first culture. Evergreen firmly believes that the satisfaction and retention of employees are paramount, as they are the backbone of the MSPs’ success—leading to happier customers and (consequently) thriving businesses.
The Pitfalls of Private Equity
When it comes to your exit strategy, your options are limited. You could leave the business to your family or you could shop it to your management team, competitors, or strategic buyers in adjacent spaces. In many cases—especially over the last two decades—owners have turned to traditional private equity firms as an exit strategy. And while many of these owners were happy to trade the stress of running a business for a giant bag of cash, there are some risks and challenges:
Valuation Discrepancies: One of the most significant challenges that business owners face when dealing with traditional private equity firms is the issue of valuation discrepancies. This mismatch can be due to various factors, including the private equity firm’s focus on short-term gains.
Loss of Control: Selling to a traditional private equity firm often means relinquishing significant control over the company. This can manifest in changes to the business’s strategic direction, operations, and even its core values. For founders and business owners who have spent years, if not decades, building their companies, this loss of control can be particularly disheartening. It’s not uncommon for new owners to prioritize efficiency and profitability in ways that clash with the original vision and culture of the company, leading to potential conflicts and dissatisfaction among the founding team and employees.
Cultural Misalignments: Cultural fit is crucial for the ongoing success of any business, and this is where many traditional private equity acquisitions run into trouble. The imposition of a new, often more corporate culture can disrupt the existing workplace dynamics, leading to reduced employee morale and engagement. This cultural shift can also affect customer perceptions and relationships, especially if the company’s service offerings or client interactions change as a result. For businesses that have thrived on a unique culture or close-knit team dynamics, this change can be particularly jarring and detrimental to the business's long-term success.
The Evergreen Advantage
Diverging from the conventional private equity playbook that often prioritizes short-term gains, Evergreen’s “forever hold” model is designed for permanence and stability, ensuring a lasting home for the businesses under its wing. This model fosters a culture of long-term, sustainable decision-making, underpinned by a decentralized operational approach that maintains each MSP’s unique identity and autonomy. That, plus the economies of scale, industry knowledge and best practices, and leadership talent that Evergreen can bring to the table, makes it an attractive partner for managing your exit strategy.
There are so many factors that point to why Evergreen is the right choice for MSPs:
Forever Hold Model: Evergreen operates on a “forever hold” model, meaning they never sell the businesses they acquire. This model aims to provide a permanent home for companies—ensuring stability for the business, its employees, and its customers. Evergreen encourages long-term, sustainable decision-making, avoiding short-term, potentially harmful actions that could undermine the business's future viability.
Decentralized Operations: Unlike typical private equity models that may centralize operations to cut costs, Evergreen maintains the individuality of each MSP. They believe in preserving the legacy, brand, and team that founders have built, ensuring that each MSP retains its unique identity and operational autonomy. This decentralized approach is crucial for fostering long-term growth and maintaining the quality of service and customer relationships that the MSPs have established.
Operational Support and Growth: Evergreen organizes its MSPs into regional groups. Each group functions somewhat like a mini holding company, which creates a support network for the individual MSPs within its region. This structure allows MSPs to benefit from the resources and support of a larger organization (like vendor purchasing power and best practice sharing) without losing their independence or brand identity.
Leadership and Succession Planning: Evergreen recognizes that many MSPs are led by technically oriented individuals who have expertly built up their businesses. However, to scale and professionalize further, there’s often a need for additional business-oriented leadership. Evergreen has a robust program for recruiting leadership and operational talent to support or succeed current leaders, focusing on individuals with strong business acumen to complement the existing technical expertise.
Acquisition Process: Evergreen’s acquisition process is designed to be efficient and respectful of the business owner's time and responsibilities. They aim to move quickly from initial interest to closing—typically within 60 days post-letter of intent—while ensuring thorough due diligence is conducted to validate the business’s financial health and operational strengths. This process includes a confirmatory review of financials, a management meeting to understand qualitative aspects of the business, a quality of earnings review, as well as customer diligence through a third-party Net Promoter Score survey.
Keypoint Intelligence Opinion
For MSPs and office technology providers contemplating the next steps in their growth journey, Evergreen represents an opportunity to align with a partner that truly understands the value of building a legacy. The benefits of partnering with Evergreen extend beyond mere financial investment. It offers a holistic approach that includes nurturing employee well-being, maintaining operational autonomy, and leveraging collective expertise for sustained growth.
If you’re at a crossroads and looking for a way to secure your company’s future without compromising its core values, then you should explore a partnership that respects the essence of what you’ve built.
Visit mspvaluations.com to learn more about how Evergreen’s unique model can work for you.
