He would spend two decades with the supply-chain software firm, moving up to the position of CEO, a title he held for ten years.
As CEO of HighJump, Chris grew revenues from $8m – $42m, and with the help of business partner and CFO Dan Mayleben, negotiated a sale in 2003 to 3M for $90m. The unit was then re-sold to Battery Ventures 5 years later for an undisclosed price.
In 2006, the duo received a phone call from the venture arm of CIBC with an appealing offer: ‘take our money and do what you do’.
In March of 2007, they started with an $11m communications company called Amcom and subsequently rolled-up four other companies under one roof in three years time. When combined, Amcom generated $52m in sales that supported 250 employees. In January 2009 Norwest Equity Partners and Split Rock Partners obtained a controlling stake in Amcom and essentially flipped the deal for $163.5m to USA Mobility just over a year later.
“I’m sticking around. USA Mobility has big plans, is hiring, and I really want to take this company to the next level,” says Heim, now President of Amcom, a subsidiary of USA Moblity.
The following interview exchange was answered together with lifelong business partner Dan Mayleben.
ZR: How did you go from intern to CEO of HighJump? Recent grads would love to know about the traits, attitudes, ethics which produced this outcome for you.
CH/DM: Being involved in a small company, I had a terrific opportunity to “wear a number of hats” over a relatively short period of time. The founders of the company created a great environment by providing me with different roles across the company. I was initially hired as a programmer, moved into a role of managing technical support which grew into the position of leading all of professional services and then crossed over into the marketing and business development side where I also participated in a number of sales pursuits.
In essence, I received on the job training for all the major software company disciplines. During this period, I also worked on my MBA at night which further enhanced my understanding of business. While I possessed personal traits which contributed to my success (such as a strong work ethic), I was fortunate the founders of the company gave me the chance to run the business, which was a bold move on their part.
ZR: With Amcom, how much growth do you attribute purely to acquisition vs. organic growth? Will future growth be fueled by acquisition or does USA Mobility have a different strategy?
CH/DM: Amcom’s growth has been driven by a combination of terrific organic growth and acquired revenue. When we acquired Amcom in 2007, the annual revenue was about $12.0 million. In 2011, annual revenue will be in the range of $57.0 to $63.0 million with the mid-point of the range being $60.0 million. The growth from 2007 to 2011 of $48.0 million was fueled by approximately $30.0 million in acquired revenue and organic growth of approximately $18.0 million.
The team is very proud of the organic growth delivered in a period of historic economic challenges. Future growth will continue to be driven by organic growth and acquisitions. One of the key attributes of Amcom to USA Mobility was our demonstrated ability to deliver both types of growth.
ZR: Who drove the decision to sell – management or investors – was there instantly a meeting of the minds or did this take time?
CH/DM: Our investors were very pleased with their investment in Amcom. They saw Amcom as a desirable “asset” possessing the three primary attributes they look for; strong leadership teams, market leading solutions and attractive markets served. They were intending on being involved with the company for a long period of time. However, the offer from USA Mobility was an attractive valuation and was also a good outcome for Amcom customers and employees. The decision to sell at this time was a mutual decision based on the traditional evaluation of the offer today versus the longer term risk – reward.
ZR: Many founders often grow disenchanted after being tucked into a larger corporation – how do you intend to keep entrepreneurial spirit alive within Amcom and how will you balance decreased autonomy?
CH/DM: The post-acquisition structure is the result of the strategy laid out by Vince Kelly, our CEO, which we believe makes a ton of sense. Amcom continues to operate as a separate company. We have retained all members of the management team, kept the same offices and continue to add additional resources to all functional teams. We are working closely with Vince and the parent company to leverage opportunities to continue to grow both organically and via acquisition.
Post transaction we remain a small, focused software entity. I think if you ask most employees here, they would say not much has changed. So, there is not a corporate “heavy” hand coming down on Amcom, but rather support and encouragement when we need it. We think we have retained the entrepreneurial spirit post-acquisition.
ZR: Who led the respective acquisition hunts – private equity or management? Can you elaborate on the process – was a narrow target set or a wider expedition pursued?
CH/DM: Historically, the hunt for acquisitions was lead by Amcom’s management team. The private equity teams were very helpful in the analysis of opportunities, deal structures and dynamics of the transactions. Initially, the software companies we targeted were rather broad but now has become more refined as we have focused on “mission critical communications” serving the markets of healthcare, hospitality, Fortune 1000 and government / education. We have and will continue to look at software companies who have complementary solutions to Amcom offerings.