The organization
tyGraph is a SaaS company that works with large enterprises around the world to organize, measure, and analyze human interactions at work. By collecting data from Microsoft 365, they can present information that provides a better understanding of the employee experience. In addition, they collect communication data and analyze it to reflect how messages are resonating with employees across regions—an increasingly important tool as organizations become more decentralized.
The business launched in 2007, focusing on providing business intelligence services and a few years later they added software solutions. In 2018, they sold their services business to focus solely on their software: this bet paid off because their international sales grew and so did their revenue. This growth eventually led to the business being acquired by AvePoint in September 2022.
The challenge
tyGraph's bookkeeping was inconsistent and disorganized. They were using two different software programs, creating duplication of data and effort.
Additionally, as their international business grew, so did the complexity of their tax and accounting needs. With international sales growing, they were subject to new taxes but lacked the infrastructure necessary for compliance—and their existing bookkeeper was under qualified and overwhelmed.
Around the same time, in late 2019, the owners set a goal for themselves to exit the business within four years. They knew that this would require a lot of work to be ready for a sale.
They would need to clean up their books, provide three years of audited financials, as well as improve their governance and regulatory compliance.
tyGraph needed to bring in experts who could clean up their financial infrastructure and set them up to succeed in their four-year exit plan. tyGraph brought on BDO to help with bookkeeping services, audit, tax, and the M&A deal. The business owners felt that BDO was the right fit based on their national coverage and presence in the middle market. This provided tyGraph with confidence that BDO would handle their issues and could offer expert advice at an affordable rate.es.
The solution
To help tyGraph, BDO first migrated its bookkeeping to one cloud accounting program—Xero. This removed duplication and helped streamline the company's financial processes. Because Xero is cloud-based, the owners could access their financial information in a timely manner, from anywhere.
Once their books were improved, they were audit ready. The team worked closely with BDO partner Alex Hardy on the audit process, to meet their goal of selling the business within a few short years. BDO also advised the business on their tax strategy, including international and personal tax issues.
In 2020, tyGraph got serious about their exit strategy and BDO was there to support the deal process. “When we got into the M&A transaction, that’s when we really realized the depth of BDO’s service and its benefit to us,” said Edward Senez, CEO, tyGraph. “Having an advisor who has been involved with our organization—as part of its audit and due diligence processes—has proven indispensable,” he added.
BDO supported the sale process, which included preparing financial and tax information for prospective buyers, as well as legal representation. BDO assisted with structuring a deal that would allow both parties to meet their goals.
The outcome & benefits
BDO supported tyGraph's growth, helping them save significant costs in financial operations and taxes. For example, when tyGraph set up their U.S. entity, BDO saved them $25,000 USD in potential penalties. They would not have been aware of this accumulative fee had they not been working with BDO.
“That’s what I like about BDO, they have someone for everything. Every time we needed another resource, BDO had an expert in this space,” said Edward Senez, CEO, tyGraph.
When tyGraph was approached by a potential buyer, they were prepared. “I was confident that because BDO supported our bookkeeping practices and accounting methodology, that our books were accurate and well-audited, and that we would receive a fair purchase price for the business,” Edward Senez added. And on Sept. 13, 2022, tyGraph was acquired by AvePoint.
Edward felt that the time and money spent working with BDO to clean up their bookkeeping and audit their financials was well worth it because they were equipped with the right tools and experts in their corner—adding tremendous value in supporting the business valuation during the diligence process.
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