Acquiring Kaleidoscope
When an app is transferred to a new owner, the historical revenue data is not transferred. And because it was only recently transferred from Black Pixel to Hypergiant, we had to look for other sources of data to find the trailing twelve months (TTM) revenue, which was needed to have an overview of the app’s financial performance.
We weren’t able to get all the Kaleidoscope graphic assets. And we had no way of looking up references to issues that were noted in the source code because bug reporting and customer support history were no longer available.
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After reviewing the pros and cons of each option, we ultimately decided on taking out a loan from a bank. We were able to get a six-year term, which provides the freedom to try and make the app profitable. We have two years to try and make it work. If it doesn’t, the six-year timeframe makes monthly repayments manageable in a scenario where we’d have to downsize the team.
Previously:
The blog post implies that the reason the financial data wasn't available was because of the recent change in ownership from Black Pixel to Hypergiant. That doesn't really make sense to me. Why didn't Hypergiant get the financial data from Black Pixel when they acquired the app? This type of historical revenue data is typically disclosed during purchasing negotiations as part of the due diligence process. After all, how can you value the app and agree on a price without seeing its financial performance?
Atlan says he consulted a lawyer, so I assume that he was properly advised and that in this case there were extenuating circumstances but this doesn't sound normal to me. Developers thinking of purchasing an app should absolutely expect to be able to get this information. The information may be under some kind of confidentiality agreement or only available after the prospective purchaser makes a deposit (to prevent purchasing offers that are really fronts to fish for information) but there's no law of accounting or something that says you can't share this data.