DEAL NOTES (for paid subscribers)

Inside the deal: how the Halden sale was priced

When Halden sold last month, the headline number was the one everyone repeated. It was also the least interesting part of the deal. What matters is how the buyer got there, and one clause that almost sent both sides home.

Halden had steady revenue but almost no growth for two years. Buyers usually punish that. This one didn't, because it priced the business on the customer list, not on the product. Long contracts, low churn, and a few customers who had been there for more than a decade.

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The clause was a three-year earn-out tied to renewals. The sellers wanted it tied to revenue instead, which they could push up with price increases. The buyer refused, and for nine days the deal was off.

They settled on renewals by customer count rather than by value. It's a small difference on paper. In practice it stops anyone from raising prices just to hit a number, and it tells you exactly what the buyer thought it was paying for.

Watch for this in the next sale in the sector. If the earn-out is tied to customer count again, the buyer is betting on the list, and the sellers will be pushed to keep every account through the handover.

Thanks for supporting Deal Notes,
Helen

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