The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

Passing on the takeover opportunity


I have been approached to consider taking over a competitor. While approaches have been made in the past, this time was different for reasons I will not go into here. The opportunity will not proceed unless the proposition is modified.

I know from the experience of April 2000 when I purchased RED Software from that one has to approach any takeover opportunity carefully. Due Diligence did not uncover the landmines laying in wait within RED Software and it was not until the deal was concluded and the money paid that the problems were uncovered. Our problems with RED began when we discovered that Scientology principles underpinned the business, making operational aspects cumbersome and some processes questionable. That experience and the years cleaning up the mess have left me cautious about takeovers – even more so of a competitor of long standing. No matter how well you know a competitor, there are bound to be landmines – Scientology or not.

Sure, I’d like the customers who would come with a takeover but I’m better off winning them through superior software and service than paying someone money to walk away while I and my team clean up their mess. It’s happening. Clients are shifting. Maybe this is why the approach was made.

I am not blogging this as part of any negotiation. This opportunity has not come to that. It’s more my way of saying to myself that no matter how strong the lure of getting bigger, any takeover opportunity has to be viewed with the perspective that only a reminder of history can bring.

Footnote: some reading here will try and guess the name of the competitor. It is worth noting that across several markets we have more than twenty competitors.

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By Mark