SEO Hacker’s First Company Acquisition

Sean Si Talks

Yup, you read it right. We’ve gone through our first company acquisition. I didn’t want to make it public during the time because the turnover of accounts have not yet been completely fulfilled. So here’s what’s happened and how we went about it.

SEO Hacker’s First Years

The SEO Hacker blog was built and published some time April 2010. During that time, it was a personal blog where I wrote everything I’ve been learning about SEO. It was fun, flexible and a pastime – until the traffic started to mount up.

Sooner than I expected, things picked up. Comments were piling up, and shares and searches were coming in fast. The blog, as far as its age goes, was a success.

It became my online portfolio. Then, on April 2011, I finally registered SEO Hacker as an official business. A sole proprietorship. I hired my first teammates November that year.

I was ecstatic.

Today, SEO hacker has grown to a team of 18 full-time people and counting. This November is officially our third year as an SEO company.

The Acquisition

I’ve been regularly checking SERPs for new players in the industry. I vividly remember one time there’s this company that popped up. I was amused at how they did their website. As far as I’m concerned, they were doing it right (compared to other, completely crap philippine SEO websites out there who just don’t get it).

I found the company’s name pretty funny though. Outsource Force.

It was at Morcon 2012 when I met the company’s owner, Darrel Bella. We shook hands, exchanged a few words then finally went our separate ways. I didn’t hear from him after that.

Until one day, I got a LinkedIn message from Darrel last December. Here’s what he wrote:


Hi Sean,

I hope you’re well. We met at the MORCON before.

I am wondering if you’re interested to buy www.outsource-force.com as a business/company, or if you know anyone who’s interested and willing. There are other websites or domain names that we own too that are receiving inquiries.

I am living full time in Thailand now running a different type of business with my partner. Recently, it is getting difficult for me to control the business and the staff in the Philippines, therefore, I’ve decided to just sell it. But I need a person who can very well take care of the existing clients of the company and even grow it.

I will be in the Philippines beginning of January. Let me know if you’re interested to meet to discuss further.

Thank you for your time.

Kind Regards
Darrel

To which I replied:

Darrel,

Of course I remember you. You are having such a good run with outsource force. It is unfortunate to hear that you are selling it. While I would love to help you by buying your company, we are not yet in a financial position to do so. I would be happy to take care of your clients however that would be a matter of charity from your end.

If there is anything I can do to help, please don’t hesitate to ask. Meanwhile I will ask around if there is anyone interested to buyout your company.

Hope you are in a much better position there in Thailand.

– Sean Si

The negotiations took off from there. Darrel didn’t want a good clean exit. He wanted someone who can really take care of his clients and reputation – which I think is a very honorable thing to do. He responded:

Hi Sean,

Thanks for responding. I am still talking to few people and companies who show interest on the business. I will contact you again if I will need your help.

Also is it possible to have a Skype meeting with you to talk about your SEO services and your packages? Maybe I can also give you an overview of what we do for our clients.

I am keen of selling my business and not just to give away my clients, but at the same time I need a person who is capable to take care of them, and I know you can. So I am keeping my options open. Maybe we can do some sort of an arrangement.

My Skype ID is (xxxxxxx)

Kind Regards,
Darrel

In his insistence, I was driven to think of a way wherein I can honor him by taking care of his clients while being profitable for the both of us. So I devised a way that we can turn things over profitably. I messaged back:

Added you up on Skype.

Here’s what I can do for you: We can do an ex-deal. You can keep part of the % profit as a partner but I will manage and grow the business for you. We will talk about the % ownership of each other but it might change the business face and branding.

It’s a win-win in the sense that you still get to be owner and keep a passive income from the business. This is assuming that you have a positive cashflow right now and the employee contracts, benefits and morale is all legal and positive.

I’m open to options and your ideas. This is one of the ways we can make it work.

Hope this helps,
– Sean Si

We met up on January and worked on the details. We agreed on a % profit sharing with SEO Hacker acquiring the company 100%.

Disclaimer: There are some parts of Outsource Force that we opted not to acquire because of our own discretion. However as for the branding, website, clients, email list, etc., it has been turned over as SEO Hacker’s company assets.

We ended up with a win-win deal.

Making things Profitable

Profitable

When I looked at the numbers, almost each of the clients being turned over had a small contract. It’s alright if we weren’t paying part of the profits away as the cost of acquisition. However that’s not the case.

So I talked with Darrel about it and we set meetings to all their clients in the country. I got to meet each and everyone of them and we presented the case of acquisition. Naturally, we also presented the case of the upgraded services on our end.

We leveraged on the fact that they had good previous working relationships with Outsource Force and used that to upsell the contract to the normal price range of SEO Hacker.

Thankfully, all of the Outsource Force clients agreed.

Good to Great

They say that 5 years is the benchmark that a business has to go through to prove its salt.

The acquisition of Outsource Force put SEO Hacker in a better business position. After all, we now have a handful of new clients and a whole new source of client inquiries coming from the Outsource Force website.

We aren’t really going to change the website – yet. It’s still doing great on its own and we have a bunch of new clients we have to deal with. Right now, we have our hands pretty full – and we’re on our way to starting our first SaaS business with a partner systems development startup.

Things are looking pretty good. And we’re not even in our first 5 years yet. I’m learning a whole lot and I plan to share it all in our 50k series. You can register on the form below.

All glory to God!

SEO Hacker, , , , ,

About Sean

is a Filipino motivational speaker and a Leadership Speaker in the Philippines. He is the head honcho and editor-in-chief of SEO Hacker. He does SEO Services for companies in the Philippines and Abroad. Connect with him at Facebook, LinkedIn or Twitter. Check out his new project, Aquascape Philippines.