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GlobalWare Solutions gets $30M

by Clifford Carlsen

Posted 07:10 EST, 10, Dec 2001

After 23 years of profitable growth, software maker and content distributor GlobalWare Solutions is dipping into the private equity pool for the first time, lapping up $30 million in growth capital.

The Haverhill, Mass.-based company teamed with London-based Mezzanine Management llp to complete a transformation from a $40 million contract publisher in 1999 to a $125 million e-commerce company today. The investment, along with an additional $70 million on the sidelines, is expected to double revenue in the next two years.

Founder and CEO Jim Bartlett said that after 30 years developing, printing and distributing support material for computer hardware manufacturers and related industries, GlobalWare began four years ago to broaden its approach using the Web as its primary distribution format.

"We decided to redirect our resources to value chain e-businesses and started managing Web sites for customers," Bartlett said. "Instead of printing and mailing material we work with companies to provide software and information documentation for delivery to their customers on demand."

The company's customers include Sun Microsystems Inc., Nortel Networks Inc, Lucent Technologies Inc. and IBM Corp., and it has nearly 700 employees. In addition to providing support materials and what it terms "value chain" services, GlobalWare is a fully equipped contract manufacturer and distributor of commercial software products.

Bartlett said the company has been profitable since six months after he founded it to edit and print product documentation and other support material for technology companies. Expansion has been entirely funded internally throughout the company's history until it decided last year to aggressively expand through acquisitions and expansion of services.

GlobalWare enlisted the services of Hugh Taylor of Boston's Newbury, Piret & Company Inc., which served as placement agent on the deal, and raised the money entirely for expansion, with no current equity holders cashing out in the deal.

Bartlett would not disclose a valuation on the deal, but said it reflected the company's long history of profits, and allowed for rapid growth at a fair price to current owners.

"It was a terrific valuation, but that is all I can say," Bartlett said. "Investors are hard to come by in this market, but we had several offers."

In addition to the $30 million GlobalWare expects to invest over the next year, Bartlett said Mezzanine has extended commitments for as much as $100 million in total, depending on market opportunities. Mezzanine, which is currently investing its third fund, a $525 million that closed in July 2000, targets manufacturing and business service industries serving North America and Europe.

Bartlett said $10 million to $15 million of the new capital will go to acquisitions. In fact, the company closed a deal Monday to purchase the technology assets of Web infrastructure company ReleaseNow Technology for an undisclosed amount of cash. That deal follows the acquisition in March 2000 of Redwood City, Calif.-based Bindco Corp., a software manufacturing and distribution services company.

"Half the growth of the company will be the intrinsic growth of our customers, and the other half will be with acquisitions," Bartlett said. "The quicker we can move to the market the better."

GlobalWare currently has about 60 client including a number of Fortune 1000 companies, and it runs customer Web sites for about 40 of those. With additional infrastructure resources and acquisitions made possible by the new capital, Bartlett said he expects to introduce new services such as full-service product support centers.

The company specifically sought a deep-pocketed investor with resources to provide additional money quickly to take advantage of acquisition targets.

"With the supply chain management service sector maturing, we believe that proven suppliers will have significant growth opportunities," said Mezzanine Management managing director Brad Jay in a statement. "Our capital will provide the financial support necessary for the next stage of expansion, and with over $1 billion of capital under management, we have the resources to help GlobalWare meet the capital challenges associated with its growth."

Source: The Daily Deal

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