“So, if you’re not actually generating well in excess of that number, then you’re going to be on the borderline, and that’s where Bulletproof found itself, I guess,” he said.
Citing the example of another publicly-listed company, Telstra (ASX:TLS), which on 20 June revealed it would slash up to 8,000 jobs in its efforts to return value to shareholders, any listed company facing challenges needs to spend time and resources restoring faith among investors.
“I don’t envy Telstra at all,” Woodward said. “We got rid of 30 staff. That was disruptive. Getting rid of 8,000? That’s going to be a very big call.”
In February 2017, long before Macquarie Telecom made its initial off-market buyout bid for Bulletproof in November of that year, the cloud services provider revealed it would cut 30 jobs from its ranks amid consolidation efforts aimed at turning around its balance sheet – Bulletproof reported a $5.4 million loss in the six months ending December 2016.
The job cuts were just a small part of Bulletproof’s efforts to return value to shareholders and boost its balance sheet, with the company also undertaking a program at the board level to look at the board structure and the executive structure.
According to Woodward, the company made quite a few changes through the second half of last year to bring about certain changes from an operating model and organisational perspective that would have set Bulletproof up to succeed over the long term going forward.
“Unfortunately, that’s the tune you’ve got to dance to when you’re a public company, and so it can be significantly limited, and then the other aspect is, in Bulletproof’s case, we actually did make some significant headway in this in terms of building revenue and in doing acquisitions,” Woodward told ARN.
While the changes the company had instigated prior to its acquisition by AC3 could have led to a return of value to shareholders over a period of years, the valuation of the company following the challenges it faced last year and year before turned out to be a catalyst for the ultimate sale of the business.
“There were a few options that were put on the table, and being acquired was one, continuing to turn around the business was another,” Woodward said. “I think, ultimately, the outcome for shareholders is as good as it could have been, and it was also motivated by the process being kicked off by the Macquarie bid.”
Now that the dust from the bidding war between Macquarie Telecom and AC3 has settled, Woodward is convinced that going private again was the right thing for Bulletproof and its shareholders – indeed, all of its stakeholders – regardless of whether the move was accomplished via a sale or through some other mechanism.
“Ultimately, Bulletproof now gets the benefit of scale, being part of the AC3 Group, which is what it really needed one way or another,” he said.
Woodward expects to stick around long enough to help bring together some of the strategy for the company going forward under the ownership of Klikon Group, but will eventually bow out entirely at some point.
“We’ve recognised that the company doesn’t need two CEOs,” Woodward said. “So, what I’m working through with the team is a bit of a phase out process, and that will probably take a number of months to work its way through.
“As to what I do after that, it’ll probably be next year before I’m really in a position to do something new. [But] I do have a lot of ideas,” he said.