There is life after a low valuation. Just ask W. Keith Maddox. Last year, as part of our annual valuation guide, he let appraisers take a crack at Infinite Conferencing, which specializes in webcasts and teleconferencing and is based in Millburn, New Jersey. Maddox felt the company was worth about $15 million, and was frustrated when the two experts valued it at approximately $10 million, about twice Infinite's 2005 revenue. At the time, Maddox told Inc. that at that price, he was not interested in selling or even taking on a new investor.
But last fall, when Infinite received three unsolicited offers--and Maddox was feeling the pull of another start-up--he decided it might be time to sell. Infinite retained an investment bank to hold a controlled auction and wound up with eight serious offers. In March, Onstream Media (NASDAQ:ONSM), a publicly traded company that offers digital video services, announced plans to buy Infinite for $18 million.
Maddox says the two appraisals he received last year were critical to his decision-making process. "I wasn't interested in selling for less than $16 million," he says, "but I also knew it would've been foolish to hold out for much more than $18 million." Maddox also notes that he took seriously valuator Len Green's concerns that Infinite seemed too reliant on Maddox. He promoted his right-hand man, David Kott, to president in good part so "the buyer could see that the company didn't depend on me for the day-to-day."