Buy & Hold Forever: ABCs Spotlight Part 2

• Autonomy
• Buy & Hold Forever
• Culture of Sharing Best Practices

Read more from our previous post on Autonomy.

We are now on part two of our three part series: Buy & Hold Forever.

Since our beginnings in 2003, Jonas has never sold a company it has acquired. This is our “Software for Life” motto and we strive to be a great permanent home for companies that join the Jonas family. As perpetual owners, we care deeply about the long term health of the employees and customers of our businesses.

Never selling the companies we buy is unique amongst many of the other buyers that we compete against, who buy companies with the goal of re-selling or “exiting” at a higher price within the next five years. This model can incentivize short term decisions, like maximizing near term profits to increase the sale price at the expense of long term employee and customer relationships. Our constraint of not even considering the word “exit” allows us to make every decision based on building great, enduring software businesses for decades. Thinking in terms of decades instead of months or years allows to develop long term relationships with long term people.

We recognize that many of the founders who sell their businesses to Jonas have devoted their entire lives to building their software companies from scratch. Whether it be having the CEO of your largest customer on speed dial or knowing the kid’s names of your employees, we understand that many of the existing relationships with the businesses we acquire are decades in the making. We strive to preserve the same care and long term thinking post-acquisition.

We have written about Warren Buffett in a previous blog post. This quote from him really resonates with our long term thinking:

“Our long-avowed goal is to be the ‘buyer of choice’ for businesses – particularly those built and owned by families. The way to achieve this goal is to deserve it. That means we must keep our promises…hold the purchased companies through thick and thin (though we prefer thick and thicker). Our record matches our rhetoric. Most buyers competing against us, however, follow a different path. For them, acquisitions are ‘merchandise.’ Before the ink dries on their purchase contracts, these operators are contemplating ‘exit strategies.’ We have a decided advantage, therefore, when we encounter sellers who truly care about the future of their businesses.”

In fact, Mark Leonard, Constellation Software’s (Jonas’ parent company) Founder and CEO, has echoed similar thoughts:

“Our objective is to be a great perpetual owner of VMS [Vertical Market Software] businesses. We like VMS businesses because they are asset-light, have robust moats, and attract the sort of managers and employees with whom we enjoy working. Lots of investors seek businesses with those characteristics, but great owners are rare… As perpetual owners, we care about the long-term health of our many small businesses. We try to provide an environment in which they can flourish.”

And finally, here are a few notes from business leaders who have sold their business to Jonas related to our Buy & Hold Forever promise:

Think Jonas would be a great permanent home for your software business? Get in contact with us to learn more.

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