Exit Stories: Advice On Acquisitions With Michael Ives

Today’s Exit Stories guest, Michael Ives, is the CFO of medical imaging platform Intelerad. Prior to joining Intelerad, Michael served from 2012 to 2020 as CFO of lowish-profile (but high-powered unicorn) Prometheus Group—an enterprise software company focused on simplifying plant maintenance and operations—where he led Prometheus’ merger and acquisition functions and saw the company grow into a globally used market leader.

Before his two biggest roles, Michael began his career in the private company services group at PricewaterhouseCoopers (PwC), and graduated from both Duke University and UNC’s Kenan-Flagler MBA program. Along the way he has served as a mentor to many, including to Exit Stories‘ own Kevin Mosely when the latter was first getting into the private equity game. 

Here are three key takeaways from this week’s episode. 

  • When looking to begin the financing process, it is important to “professionalize your company”—to have solid quarterly goals and hit them every quarter. Prometheus had a lot of success and always hit its end-of-year goal, but according to Ives, each year was a “rollercoaster” before they received a substantial investment from growth equity firm TA Associates. “Under TA, we started to become a little bit more focused on having that quarterly discipline, getting some of the right metrics in place so that we could track and really frame the business so that other potential acquirers some day could look at what we’ve been doing and get their investment committees excited about it,” Ives said. (5:55)
  • For a platform like Prometheus, the key to a well-integrated acquisition is to make it functionally seamless. In Prometheus’ case, this meant hooking up acquisitions into a “function switcher” on the main platform, giving users the same user experience with an added functionality so they were more likely to enjoy the benefits. “The psychic benefit to the users, it just makes such a difference,” Ives said. “It feels like it’s one platform.” (17:35) This became increasingly more important as the acquisitions grew in size. 
  • At Prometheus, Ives was lucky to work with a string of good investment groups— TA, F&P, GenStar and HG—and for his team, especially as he was personally taking on a lot of the work on the corporate side, this made all the difference. “A good investor, they’re going to help you generate M&A pipelines, they’re going to give you additional credibility where you get to frame yourself as being partnered with some of the best investors in the world,” Ives said. Especially for the first few M&A deals, where these firms helped with deal support, a good partner was crucial.

Thanks again to Vaco, this season’s Exit Stories sponsor. You can listen (and subscribe!) to the episode below: