Define Capital is a company that buys SaaS and software companies for long-term value creation. They help entrepreneurs find a long-term home for their business.

Define Capital

Define Capital is looking to acquire B2B software and SaaS companies that operate in a niche market. Our sweet spot is profitable companies with $400K to $5M in EBITDA. 

📢 Exciting News from Define Capital!

In March, Define Capital acquired two pioneering software and technology companies, Realtax and Ontario Tax Sales, which specialize in the property tax arrears market. We have now merged them into the new Realtax Inc.

Realtax, founded 28 years ago, now with over 225 municipal customers, is the leading provider of property tax registration and property tax sale services for municipalities across Ontario. Our dedicated team and advanced software deliver a seamless experience for municipal treasury departments, enabling efficient management of property tax arrears and substantial returns on investment.

What is a tax registration? When a property owner in Ontario fails to pay their property taxes for an extended period, the local government registers the property as overdue. If the taxes remain unpaid, the government can eventually sell the property to recover the owed funds. This complex process can take years, but Realtax simplifies it, allowing municipalities to focus on what truly matters: managing their communities.

We are incredibly grateful to inherit such a great product and a fantastic group of professionals. Let's goo!

#DefineCapital #Realtax #Innovation #PropertyTax #MunicipalServices #Acquisition

Ever wondered what it's like to go through a private equity deal? 

Here's a breakdown of the steps involved:

✏ EARLY STAGES
In the early stages, investment bankers typically represent companies for sale and prepare a "teaser" — a one-page overview of the business for sale. 

If the private equity (PE) firm is interested, they'll sign a non-disclosure agreement (NDA), and the investment bank will then send the PE firm the Confidential Information Memorandum (CIM). T

he CIM is a comprehensive presentation, usually 50-100 pages, detailing all aspects of the business for sale. 

The PE firm will build a basic model, often a leveraged buyout (LBO), and perform some initial research. 

If everything looks promising, the PE firm will submit an Indication of Interest (IOI), which expresses their interest in learning more and typically includes a valuation range. If the investment bankers feel the IOI valuation is within range, the process continues with the PE firm.

✏ MID-STAGE
In the mid-stage, the PE firm conducts more detailed due diligence and eventually submits a Letter of Intent (LOI). This document indicates that the PE firm is serious about purchasing the company, assuming all due diligence checks out. The LOI includes an actual valuation, but it is non-binding. 

Next, the bankers arrange a meeting between the PE firm and the company, usually an on-site meeting that includes a business tour, Q&A session, and more casual dinner/drinks in the evening. 

The PE firm then moves forward with formal diligence, a comprehensive process that includes modeling, industry research, customer research, background checks, and accounting checks. 

A significant part of this stage is building a model that shows lenders the deal is attractive enough to finance with debt, complemented by equity from the PE firm.

✏ LATE STAGE
In the late stage, if everything continues to look good, the process moves to the legal stage where lawyers exchange drafts of the Purchase Agreement, whether it be an asset or stock purchase. This agreement should reflect the terms outlined in the LOI or the latest mutual understanding. 

During the closing stage, the deal officially "closes." The PE firm calls capital from its investors (equity), and lenders provide their "debt capital." The money goes to the seller and covers the seller's expenses, resulting in the PE firm owning the company or at least a majority portion.

They say aviation is a great proxy for life. 

When things go wrong when you're flying an airplane, there's a tendency to want immediately address it.

History is replete with with situations where that first move during an emergency makes things significantly worse. 

So one of the things they drill into you during flight school is to sit on the situation, catch your breath and let your head clear.

"We expect enterprise software to remain the largest and fastest growing sector over the next two years with a ~16% growth rate and a market cap of over $34TN by 2026."

At the inaugural DEIC Power 100 event, Martin Taylor, Co-Head of the Foundation Fund and Senior Managing Director, took the stage to share insights on the continued growth and opportunity set in the enterprise software sector.

Our CEO, Narbe Alexandrian spoke about the genesis of Define Capital and its recent acquisition of Realtax Inc. at the CPA Ontario Innovation Leadership Accelerator event. Check out the recap below!

Opportunity is going beyond tech.

In an era where tech startups seem to be the go-to, there's a quiet but noticeable trend among young entrepreneurs: a return to traditional businesses. 

Instead, they're investing in entities like laundromats, self-storage units, and vending machines. While this might seem like a step back in a digitized age, it's actually a sharp reminder that opportunity doesn't always wear a Silicon Valley badge. 

This divergence from the norm speaks volumes about the versatility of today's entrepreneurs. They recognize potential in places often overlooked, bringing a fresh perspective to traditional business models.

This trend could well be a defining feature of our current entrepreneurial landscape. It's a testament to the fact that there's more than one path to success and that sometimes, the most time-honored industries can offer new grounds for innovation and growth.

DEFI

CA:DEFINECAPITAL

Define Capital