On average, Vista operates these companies for four to six years. “Once we buy a company, we invest significant expertise, time, and resources in it to be a leader in its market for long-term operating success,†says Rogers. “We find that doing so ultimately makes these companies compelling to potential buyers.â€
Adding Value
Once Vista has acquired a controlling interest, its team applies what it calls VSOPs, or Vista standard operating procedures. These are hush-hush business-process best practices–Vista has developed more than 50 of them–that are run across the entire acquired company. They include examining the way a business manages its contracts and customers, code development processes and efficacy, services infrastructure, salespeople, sales training, territory management, and pricing grids. “Our VSOPs are designed to manage this process efficiently and effectively, with scale, across our entire platform, across every single software company we look at and buy,†says Smith.
The idea is that by applying these best practices, revenues and earnings will increase along with the value of the company in which Vista has invested. “We are focused on building fundamentally strong, growing businesses which generate additional shareholder value every year,†says Alan Cline, a principal at Vista. “The result is that we can be patient through different business cycles, focusing on the long term to achieve consistently strong financial results for our shareholders. This often results in the eventual sale of the business.â€
Cline says that Vista looks to “achieve three times or better returns for our shareholders on each investment we make.â€
Smith worked for Goldman Sachs from 1994 to 2000 where he executed and advised in mergers and acquisitions worth more than $50 billion. He says the problem-solving aspect of his business excites him most, and that he is best at creating elegant solutions to complex problems. “That’s really what Vista does in the world of software. It focuses on buyouts of enterprise software and technology-enabled solutions companies. When you create an engineered solution to a problem, you will get a predictable outcome.â€
Smith’s analytical strength, determination, and winning attitude are among the reasons for Vista’s success, says John Utendahl, vice chairman of Deutsche Bank Americas Holding Corp. Utendahl was a friend and adviser to Smith during Smith’s early years on Wall Street. “Robert is professionally persistent,†says Utendahl. “He knows how to win. When I first met Robert, he made sure I understood his strengths and areas where he could improve. His balance and self-awareness make Robert tremendously successful. Using a sports analogy, when you’re in a tough game you want Robert on your team.â€
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