by Joanne Carew

Q&A: How Striata sealed its acquisition deal during the lockdown

Oct 07, 2020
IT LeadershipMergers and AcquisitionsStartups

While the world was in lockdown, the team at South African customer communications management (CCM) company Striata was ironing out the details of a buyout offer from Doxim. Founder Mike Wright explains, and outlines management and technical challenges that face any IT leader going through a merger or acquisition.

michael wright
Credit: Michael Wright

There’s something distinctly South African about Striata’s Mike Wright — part of it may have to do with that fact that he runs a successful digital customer communications management (CCM) business that he named after a common South African aloe species. Today, the company is entering a new chapter. Recently acquired in a multi-million dollar deal by Canadian communications and engagement company, Doxim, the Striata team have work to do to complete the merger of technology and staff, and also see some exciting prospects for international expansion.

In this Q&A, we chatted with Wright about the technical and management challenges of bringing two companies together, and why he’s making sure that the company doesn’t lose its well-established South African culture.

Let’s start with a little introduction to Striata.

We’re a South African success story. We started in my garage over 20 years ago and expanded quickly. It wasn’t long before we realised that the value that we were providing to the local market had just as much appeal in other regions. So we sent out different South Africans employees as our “envoys” and we grew the business from there.  

 Tell us about the acquisition by Doxim. Was a buyout your ultimate goal when you started the business?

The idea was always to build the business and eventually become part of something bigger; realising capital value for our shareholders and for the staff who are invested in the business. In 2017, we were named a visionary business in Gartner’s magic quadrant for customer communications management (CCM) software. Being acknowledged like this put us on everyone’s radar so we’ve had a lot of conversations about potential deals and partnering up.

How did you get this deal right during the COVID-19 pandemic?

We started chatting to Doxim in September last year and got a formal letter of intent from them just before the global lockdown started. It was complicated to do all of this during a pandemic; we pretty much had to secure an agreement and develop a relationship over Zoom. We’ve literally sat across the world from each other, figured everything out and signed the deal. There’s value in being able to look your new partner in the eye, shake their hands and confirm that the deal is on so getting this right during this time was a massive achievement.

What does the acquisition mean for existing business leaders?

With our acquisition, we have contracts that outline incentives for both parties. The ultimate plan is to work together to grow this thing into something bigger going forward. All of the top executives are staying. We’re all in charge of the same processes as we were in the past. What will happen is that we’ll redefine our roles and our place in the business as we work with Doxim to scale up and start a new chapter.

 How will you manage the transition without causing too much disruption to your operations?

When you’re putting two things together, change is inevitable. Typically, the key is good communication. Tell people why a decision is being made. If we’re using technology X and they’re using technology Y, you need to be able to explain to your team why you’re making the change to technology Y. If my guys think that this is a mistake, it’s my job to make sure that they understand why technology Y is the better bet, how technology Y can add value to the work they do and why we’ve decided to go this route. In situations like this, your attitude and your approach to the change are very important.

This deal opens you up to a whole new network. How do you preserve your company culture while tapping into new networks?

If I work with South Africans they understand my values, how I talk and my inferences. This sense of familiarity makes it easier to build trust. When partnering with or hiring people who aren’t South African you must take time to make sure that they understand your South African-isms and your culture so that you can work together successfully. Having established networks is just as important, especially if you’re moving into a different region and you don’t know the ins and outs of doing business in this territory. You need to understand the opportunity and then come up with a happy mix that taps into the different networks and leverages your business’ secret sauce — your culture — in order to make the most of the opportunity.

You’re a South Africa-born business – are you worried about maintaining your African history/roots?

Not at all. Actually, our South African market is one of our most mature when it comes to our clients. Our customers in SA are pushing the envelope harder and faster than our international clients. We use South Africa, to some extent, as a test bed. We take ideas from what is happening in the South African market and use this as a basis to develop and build an offering that will work in other regions. I truly believe that there is a lot of opportunity for the type of work we do, and the work Doxim does, in Africa. We also picked a fully South African team to help us through this deal and I couldn’t have done it without them and their support. It takes a village and the village we chose was a village of South Africans.

 How will you handle the challenges around integrating Doxim and Striata – particularly from a tech integration perspective?

I’ve bought two companies in the past. The one deal was wonderfully successful and the other was not. The unsuccessful deal did well financially but it didn’t work out from a people perspective. With the other acquisition, both of us were smallish businesses so putting the two entities together happened without a hitch.

It’s early days on the systems integration side of things but we do know that two of the most significant migrations will be from GSuite to MS 365 and from Hubspot to Salesforce for CRM. Striata changed our mail, calendar and document sharing platform from Microsoft to Google’s G Suite in 2013. With the acquisition by Doxim, we will be migrating back to Microsoft so that we are on the same platform and can access all integrated MS processes. Although the change for Striata staff is significant, the majority of work will come in replacing or migrating the integrations we have done with G Suite for many of our business processes. 

In most instances, the success of an acquisition is about met and unmet expectations. It’s about what you promised six months ago. People don’t forget those promises so you need to deliver. In this case, we’re taking the best of what we do and creating something new. The new is the best of them and the best of us. We’re constantly having integration, people and technology meetings. It’s all comes down to us joining forces and getting everyone on the same path.