RedPrairie to be Acquired by Francisco Partners

Source: ARC Wire

RedPrairie Corporation, a provider of supply chain technology solutions that enable business process transformation announced it has entered into a definitive agreement to be acquired by Francisco Partners, a technology-focused private equity funds.

Francisco Partners is a technology-focused investment firm. It invests in public and private technology companies at inflection points, where its strategic insight and long-term focus give it a differentiated view of investment value. Francisco Partners provides transformational capital by working in close concert with the management team to reposition, recapitalize, or otherwise rejuvenate companies to support strong long-term value creation.

Adrian Gonzalez, ARC Advisory Group, commented, "This news confirms a rumor that had been circulating for a couple of weeks. As the software landscape continues to consolidate--and the large enterprise players like Oracle, SAP, SSA Global, and Microsoft become more powerful--vendors like RedPrairie are being forced to think defensively and find new sources of capital to accelerate growth. Going public continues to be a challenge for small and midsized software vendors, especially with the added costs and constraints inflicted by Sarbanes-Oxley. Therefore, it's not surprising that RedPrairie and others are going the private equity route--i.e. consolidating ownership under one entity and pursuing a roll-up strategy (a strategy that's easier to pursue as a private entity instead of a public company). The rumor that was floating around also said that a large Transportation Management Systems vendor was also being acquired. It remains to be seen whether this comes true, but additional acquisitions will certainly occur this year. What does this mean to customers? Being acquired by an equity firm is arguably less disruptive than being acquired by another software company. So in the near term, it's business as usual. It remains to be seen what changes Francisco Partners makes down the road from a strategy and acquisitions perspective."