Acquiring Minds

Buying A 45 Year Old Software Business

with Jason Budd · Metasystems

LenderHawk analysis. Not affiliated with or endorsed by Acquiring Minds.

The Deal

Business

Metasystems

Industry

ERP software provider specializing in highly engineered manufacturing solutions for configured-to-order, made-to-order, and engineered-to-order manufacturers

Purchase Price

$2.0M

Year

2020

Financing

SBA 7a

LTV at Close

90%

Financing Structure

$1.6M

SBA 7(a)

$1.6M (80%)

Seller Note

$200K (10%)

Buyer Equity

$200K (10%)

Strategic Rationale

Acquisition of established, cash-flowing business with minimal customer churn to leverage buyer's manufacturing and ERP expertise, reduce entrepreneurial risk compared to building from scratch, and position for growth through technical modernization and product platform evolution.

Key Takeaways

1Buyer should maintain active pipeline of potential acquisitions throughout due diligence rather than becoming overly committed to single deal, as unexpected obstacles can emerge at any stage
2All transaction stakeholders (lenders, brokers, sellers, attorneys) have competing incentives; only the buyer's attorney is exclusively aligned with buyer interests, requiring buyer to independently validate information and assessments
3Buyer should proactively manage deal momentum by acting as project manager, escalating bottlenecks through appropriate channels (broker, attorney, lender) rather than assuming other parties will keep process moving
4In small business acquisitions, acknowledge that both first-time buyers and first-time sellers are navigating unfamiliar territory; establishing rapport around this mutual inexperience can improve relationship dynamic and reduce friction
5Domain expertise in target industry significantly enhances lender confidence and buyer's ability to identify and manage key risks (technical debt, key person dependencies, operational improvements)

Matched SBA Loan Records

SBA loan filings we matched to this deal

Wells Fargo Bank National Association85%

$250KP + 2.00%FY2010

The Deal

Business

Metasystems

Industry

ERP software provider specializing in highly engineered manufacturing solutions for configured-to-order, made-to-order, and engineered-to-order manufacturers

Purchase Price

$2.0M

Year

2020

Financing

SBA 7a

LTV at Close

90%

Financing Structure

$1.6M

SBA 7(a)

$1.6M (80%)

Seller Note

$200K (10%)

Buyer Equity

$200K (10%)

Strategic Rationale

Key Takeaways

1Buyer should maintain active pipeline of potential acquisitions throughout due diligence rather than becoming overly committed to single deal, as unexpected obstacles can emerge at any stage

2All transaction stakeholders (lenders, brokers, sellers, attorneys) have competing incentives; only the buyer's attorney is exclusively aligned with buyer interests, requiring buyer to independently validate information and assessments

3Buyer should proactively manage deal momentum by acting as project manager, escalating bottlenecks through appropriate channels (broker, attorney, lender) rather than assuming other parties will keep process moving

4In small business acquisitions, acknowledge that both first-time buyers and first-time sellers are navigating unfamiliar territory; establishing rapport around this mutual inexperience can improve relationship dynamic and reduce friction

5Domain expertise in target industry significantly enhances lender confidence and buyer's ability to identify and manage key risks (technical debt, key person dependencies, operational improvements)