An internet provider in Goiás, with revenue of about R$ 600 thousand a month, wanted to grow. It knew the fastest way was to buy other providers' customer bases, but it had never made an acquisition. It didn't know how to run the process and, above all, didn't know how to buy without putting its own cash at risk.
That doubt holds back many business owners in the sector. An acquisition seems too big, too risky, and keeps getting postponed.
The challenge
Because it didn't know how the acquisition market works, the provider had never explored this strategy in depth. The credit available from banks was limited, which kept it from being more aggressive in a negotiation, even with a cash offer. In practice, growth was limited to what the operation could generate on its own.
The trigger came from its relationship with Vispe. In every meeting with our clients, we work on opening their eyes to growing equity. When an opportunity came up and we saw the client was ready for it, we brought the proposal right away.
How Vispe worked
We introduced the client to an investment fund linked to the telecom sector, a partner of ours, focused precisely on this kind of deal. With projections of how third-party capital would be used, and by showing how the debt could generate a return far greater than its cost, the deal made sense and the risk went down.
The structure had three parts. First, opening a credit line with the fund, which prioritizes sector deals and therefore released a much larger amount. Second, a business plan presented to the fund, defending the thesis and showing how the capital would be used and how it would ensure repayment. Third, building the numbers in advance to prove repayment capacity, which lowers the deal's risk and brings longer terms and a lower rate.
The most demanding part was negotiating with the fund to reach the best return structure for the client, with an installment that fit cash flow without causing delays or new interest. And here the relationship made a difference: going directly, the client probably wouldn't have gotten the same terms.
The results
The R$ 1 million raised made it possible to acquire a competitor, with a 48-month repayment term.
- Revenue: up R$ 300 thousand a month.
- EBITDA margin: up 15%.
- Net result: positive, at 9%, after investments and liabilities.
- Equity: up 250% after the acquisition.
- Infrastructure: more free ports and room to activate new customers.
- Debt: being repaid without compromising cash.
The company also gained relevance in the region where it made the purchase.
What changed
The client came to understand that growth can also be inorganic, and that third-party capital, used well, is a lever. Acquisitions and the use of third-party capital became a standing topic in meetings. He deepened his knowledge of the subject and saw, in the numbers, how much it benefited the company.