Archives for February 24, 2014

Pamlico Capital Acquires Daxko

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Pamlico Capital has acquired Daxko, a software company serving the not-for-profits and member-based organization sectors, from Frontier Capital. Daxko represents the second investment made by Pamlico Capital III, a recently raised fund with $650 million of aggregate commitments.

“Daxko represents an industry leading software platform where we believe Pamlico’s experiences growing portfolio companies organically and through acquisition will accelerate value creation,” said Pamlico Principal Eric Wilkins.

Daxko is a provider of SaaS software and services to not-for-profits and member-based organizations. The company’s SaaS products, including Daxko Operations, Daxko Accounting and Daxko Engage, are used by more than 500 organizations to manage daily operations, perform administrative functions, and engage with members. The company’s customers include YMCAs, YWCAs, Jewish Community Centers, medical fitness centers, and community centers, among others. Daxko was founded in 1988 and is headquartered in Birmingham, AL (www.daxko.com).

Daxko’s CEO David Gray and other management team members will retain significant ownership of the company. “We are excited to partner with Pamlico. Their prior experience investing in vertically focused software businesses and the relationship they built with our team over the last two years really made them stand out. They committed to a swift and efficient process which allowed us to stay focused on our business and mission,” said Mr. Gray.

“The management team’s passion for their business, strong corporate culture, and their commitment to setting and achieving high growth goals impressed us,” said Pamlico Partner Art Roselle.

Pamlico Capital invests from $25 million to $100 million in companies with total enterprise values of between $50 million and $250 million. Sectors of interest include business and technology services, communications, and healthcare. Pamlico Capital was founded in 1988 and is based in Charlotte, NC (www.pamlicocapital.com).

Frontier Capital, which acquired Daxko in December 2008, invests growth equity of $5 million to $25 million in technology enabled business services companies that have revenues from $5 million to $30 million. Frontier Capital was founded in 1999 and is based in Charlotte, NC (www.frontiercapital.com).

“We are proud to have partnered with Daxko and played a role in helping the company more than triple in size during the tenure of our investment. Daxko has a well deserved reputation for building world class software and providing exemplary service to their customers and we know they will continue in this tradition with their new capital partner, Pamlico,” said Andrew Lindner, Partner of Frontier Capital.

The Daxko transaction highlights Frontier’s continued success in SaaS, which accounts for almost half of the firm’s investment activity since 1999 and includes realized investments in Anodyne Health, Digital Envoy, Accipiter, and Lanyon.

“Over the length of our partnership with Frontier Capital, we worked together to evolve our strategy and produced dramatic growth in revenue and profitability. With a record year for Daxko in 2013, we look forward to what the future holds and thank Frontier for their role in our success,” said Mr. Gray.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-24-14

High Road Acquires Martino & Binzer

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BlueSpire Strategic Marketing, a portfolio company of High Road Capital Partners, has acquired Martino & Binzer, a marketing agency that specializes in the senior living sector.

“Senior living communities are increasingly relying on sophisticated marketing services, such as those provided by Martino & Binzer, to build brand awareness, increase occupancy, and drive census. Martino & Binzer’s customer base makes it a natural partner for BlueSpire. Both companies bring complementary know-how in overlapping markets and highly regulated industries,” said Jeff Goodrich, High Road Partner.

Martino & Binzer is a provider of marketing, sales consulting, and technology services to the senior living and continuing care retirement services sector. Martino & Binzer was founded in 1980 and is headquartered in Farmington, CT (www.goodbait.com).

“This combination expands BlueSpire’s range of digital marketing services and enhances our ability to reach the important senior demographic for our healthcare and financial clients,” said Kathryn Hammond, Chief Executive Officer of BlueSpire. Ms. Hammond will serve as CEO of the combined business.

BlueSpire Strategic Marketing is a provider of strategy, technology, and content services for companies operating in the healthcare and financial services sectors. BlueSpire has a specialization in multi-channel marketing services with a strong emphasis on end-user content and digital media. BlueSpire was formed through the combination of Dowden Custom Media and Priority Integrated Marketing, which Dowden acquired in June 2011. In November 2012, High Road Capital Partners split Dowden Custom Media into two separate portfolio companies – Dowden Medical Communications Group and BlueSpire Strategic Marketing – with High Road maintaining a majority ownership of both. BlueSpire is headquartered in Minneapolis (www.bluespiremarketing.com).

High Road Capital Partners invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million. The firm was formed in 2007 and currently manages over $470 million of committed capital. High Road has completed 30 transactions, comprising 29 acquisitions – 12 platform investments, 17 add-on acquisitions – and two exits since its founding in 2007. High Road is based in New York (www.highroadcap.com).

Jeff Goodrich, Partner, led the transaction for High Road. Also working on the transaction from High Road were Ben Schnakenberg, Partner; Bill Hobbs, Partner; and Paul Langley, Senior Associate.

“We are extremely excited to partner with the BlueSpire team to extend a broader range of services to our core client base,” said Dave Martino, President of Martino & Binzer. Mr. Martino and other members of the company’s management team made an equity investment in the transaction alongside High Road. Mr. Martino will remain President of the Martino & Binzer business.

Financing for the acquisition of Martino & Binzer was provided by Fifth Third Bank.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-24-14

Odyssey Has Final Close of Fund 5 Above Target

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Middle-market private equity firm Odyssey Investment Partners has held a final closing of Odyssey Investment Partners Fund V, LP with $2 billion in commitments.

Investor interest in Fund V, which launched in September 2013, exceeded its initial target of $1.75 billion. Fund V’s limited partners include substantially all of the limited partners from the firm’s fourth fund, as well as several institutional investors new to Odyssey.

Fund V will be led by the Managing Principals of Odyssey: Brian Kwait (Co-President), Bill Hopkins (Co-President), Stephen Berger (Chairman), Doug Hitchner, Doug Rotatori, Randy Paulson, Jeff McKibben, Craig Staub and Robert Aikman. The senior Managing Principals have led Odyssey since the early 1990s and will continue to execute its buy-and-build strategy in the industrial manufacturing and business services sectors.

Odyssey raised Fund V independently, utilizing the relationships of the Managing Principals and other senior members of the Odyssey team.

“We and our partners are pleased by the significant demand for Fund V and by the speed with which we were able to complete the fundraising process. We are grateful for the confidence once again placed in Odyssey by a distinguished roster of institutional investors and in the coming years we will utilize our disciplined approach to create value on their behalf,” said Messrs. Kwait and Hopkins in a released statement.

Odyssey’s previous fund (Fund IV) closed in 2009 with capital commitments of $1.5 billion. Realized Fund IV investments include BarrierSafe Solutions International, a provider of branded disposable gloves and injection molded protective footwear, which was sold in January 2014; One Call Care Management, a provider of specialized cost containment services to the workers’ compensation industry (sold December 2013); and TNT Crane & Rigging, a provider of lifting services and equipment to customers in the North American energy and industrial infrastructure end markets (sold October 2013).

Odyssey typically invests in companies with EBITDA in the range of $20 million to $100 million. Within the firm’s target sectors, particular areas of interest include aerospace, equipment rental, distribution, insurance/healthcare services, energy, packaging, safety products, industrial equipment and industrial automation.  With the closing of Fund V, Odyssey now has more than $4 billion of capital under management. The firm has offices in New York and Woodland Hills, CA (www.odysseyinvestment.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-24-14