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
