After notable successes with two British IT companies, Vin Murria is on the fast track yet again with Advanced Computer Software. GrowthBusiness finds out how she got started and what’s behind her impressive record.
After notable successes with two British IT companies, Vin Murria is on the fast track yet again with Advanced Computer Software. GrowthBusiness finds out how she got started and what’s behind her impressive record.
When Vin Murria was three years old her parents decided it was time to leave India and start a new life in Britain. The family settled in Coventry, where her father worked as a bus driver and her mother was a shopkeeper.
‘There was no glamour,’ recalls Murria, who went to the local comprehensive school. ‘But what both my mother and father absolutely believed in was the importance of education for their children. If you studied for an education and used it well, you could do anything you like.’
Murria has shown that their faith was well founded. Over the past 25 years she has been closely involved with some of the UK’s most well-known IT companies, such as Kewill Systems, where she was chief operating officer, and Computer Software Group, where as CEO she took the company private, merged it with IRIS Software and then sold it to private equity firm Hellman & Friedman in a deal worth £500 million – all in the space of four and a half years.
For someone who has made a fortune through private equity and the public markets, becoming a well-known figure in the City, Murria comes across as modest and lacking in ostentation. There can’t be many CEOs who give their salary to charity, as she does with her remuneration from Advanced Computer Software, which she joined in 2008. She uses the money to help fund children back in India so they can receive a proper education. ‘I go back there and see what’s happening and I think: “There but for the grace of God go I.” Here [in England] I’ve had the opportunity to do something.’
She believes ardently in giving something back. ‘It’s about helping children because if you give a child an education, you give it life. It’s a life not only for them, but for their whole family.
‘I was very fortunate in that I made a lot of money at Kewill and Computer Software Group, and if I did this just for the money, why would I bother? It also makes me feel great and good about what I am doing. It keeps me grounded too when you have business issues and the government is talking about cuts everywhere.’
Built to last
Murria has completed over 40 acquisitions since her days at Kewill. She knows how to attack a niche market and squeeze it for sales by accumulating underexploited, complementary businesses. It’s a formula for success that she’s repeating at Advanced Computer Software, where in two years she has overseen five acquisitions, including COA Solutions for £100 million from Alchemy Partners, and opened offices in Asia and North America. In between all of this, she managed to negotiate a new £55 million financing facility with two banks.
The AIM-listed company, which provides software and IT services to public, private and third sector organisations, has gone from zero to close to £100 million in the space of two years. ‘I’m good at taking something that has sales of £2.5 million and making it a £500 million business,’ she comments. ‘I’m not good at going from a start-up to a few million pounds; that’s not me, but I do have a huge amount of respect for those who can do the start-up phase.’
ACS specialises in front and back office applications, assisting GPs, who operate as private businesses, and the NHS. Looming government cuts do not pose a threat, says Murria, as ACS is not reliant on the national spending programme.
It’s a sector that is ripe for consolidation too, which makes it ideal for Murria. ‘None of the acquisitions I’ve made have ever been pure-play, stable businesses. They weren’t crash-and-burn concerns in any way, shape or form, but businesses that with the guidance and focus on sales and marketing, infrastructure and, critically, the right people, could go on to greater success.’
1
Murria likes to take a company that has fallen into the rut of a “lifestyle business” and revitalise it. ‘People get comfortable as their business gets to £3 million or £5 million turnover; they like their position in the community and are quite settled. The problem with this is that the founders and senior managers have never brought the next level of management through.’
So when taking over a company that may have become too settled in its ways, the answer tends to be to recognise the talent that already exists within the business.
‘We generally move the next level of managers up and then nurture the new lower levels, so you’re constantly building up the team,’ she says.
Financially, Murria knows exactly what she is looking for in a company and how a deal should be structured. ‘We only buy businesses where there is 50 to 60 per cent recurring revenue and a further 30 to 40 per cent will be non-contracted but recurring because of selling into the user base. There will be long-term, loyal customers and the scope to take additional modules and functionality to them.’
The deals are either cash-outs or a combination of cash and equity. ‘We don’t do earn-outs,’ she states. ‘We want to have everyone’s priorities aligned.’ The approach is admirably direct, and she says she finds it funny when people see what she does as some kind of dark art. ‘It’s very straightforward,’ she adds.
That’s not to suggest that she isn’t thorough. ‘I don’t do high-risk, high-profile buy-outs. That’s not the market we’re in, and we find the businesses we want ourselves. I will go to an event or exhibition personally and speak to competitors about the company I want to acquire. I’ll take everything the owner of a company I want to buy has told me at face value until I’ve checked out what the competition says.’
Pushing boundaries
There is a natural limit to how far a company can be scaled in the UK, which is why the more ambitious entrepreneurs embrace acquisitions and have an eye on broadening a customer base internationally.
The move to expand overseas shouldn’t be taken lightly as it’s both costly and time consuming. Unlike a corporate, smaller companies can’t afford to have loss leaders in emerging markets. ‘My philosophy for international expansion is that you only do it when you’re ready to be there. You don’t do it as a small entity.’
ACS has moderately sized sales teams in the US, India and Vietnam. Among the Asian powerhouses, Murria argues that China poses a trickier prospect for British companies than India. ‘The most successful businesses I’ve seen in China tend to be manufacturing or retail outlets that have been developed specifically for the Chinese market. So rather than exporting to the UK, they’re selling to China.’
India, by contrast, has more in common with the UK due to the history between the two countries. ‘It is challenging but at least they have a democracy and a legal system that’s not too dissimilar to our own,’ she says, noting that the idea at ACS is to identify markets ‘where dynamic change can be achieved’.
As careful as a CEO needs to be strategically when opening offices abroad, Murria has no doubt that a global perspective is essential if a company is to scale properly, especially in the software and IT sector. ‘There is a natural limit to the opportunities in the UK when compared with US, Asian or Israeli entrepreneurs.
‘We need to become the Israel of Europe and be much more entrepreneurial about how we take our own innovations and leverage them in other markets. The whole concept of software on the internet now allows us to operate globally.’
Backing entrepreneurship
Not so long ago, Murria was the overall winner of the annual Asian Women of Achievement Awards. She is clearly pretty chuffed by the accolade, but stresses that for her it doesn’t matter ‘if you’re black, white, green or pink, male or female’.
The priority is to create and support innovators and people from all backgrounds who harbour a passion to create enterprising businesses.
‘We have to build momentum,’ she says. ‘As the market moves toward the East, we need those innovators who can put us ahead of the game.’
So far, it appears that she is putting together just such a business with ACS. The company seems to be in a strong position, with further acquisitions on the cards, and while developing the UK market, the potential for transformational growth is evident in overseas territories. Her goal is to push the company’s market cap to the £500 million mark in the next two to three years.
The business may have the aforementioned debt of £55 million, but she comments that the company’s contracted revenues are almost twice the debt, which is why the banks were queuing up to provide finance: ‘We tend to stay well below two times EBITDA as you don’t want to over-leverage yourself.’
Murria’s focus is clear with ACS, but it’s easy to forget that she sits on the board of other companies and is a partner at venture capital firm Elderstreet Investments (whose chairman is GrowthBusiness blogger Michael Jackson). She acknowledges that if she has a failing, it’s trying to take on too many things. ‘I could do with 48 hours in every day,’ she says, adding that she probably drives everyone too quickly. ‘Managers will get an email from me at 2 o’clock in the morning.’
It’s a lot to balance, and the pressure from investors must be intense. As much as she evidently likes to feel tested and challenged, she has a refreshing take on the messy business of making money: ‘What grounds me is when I think about where I come from,’ she says. ‘It makes you realise that nothing is that important in the end.’
Vital Statistics
Married: ‘Yes, to a man who is fantastic, lets me get on with things and loves what I do’
Children: A son
Place of birth: India
Favourite book: Three Billion New Capitalists by Clyde Prestowitz: ‘It’s an amazing book and shows what will happen to the West as the BRIC countries develop’
Business hero: ‘I have a little green book and in it I write down characteristics I would like to emulate from everyone I’ve ever worked with and have a huge amount of respect for’
Pet hate: ‘Bureaucracy: it has a negative impact on every business and you lose innovation’
