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Deal Maker of the Year Awards 2013 WINNER - VISTA EQUITY PARTNERS
DEAL: Vista Equity Partners buys ACTIVE Network
COMPANY: Vista Equity Partners WEBSITE: www.vistaequitypartners.com
USA
DEAL OVERVIEW
Vista Equity Partners, a U.S. based private equity firm with offices in San Franciso, Chicago, and Austin, is managing over $7 billion in commitments and investing in enterprise software businesses and technology-enabled solutions companies.
Vista is a value-added investor, contributing professional expertise and multi-level support towards companies realizing their full potential. Vista’s investment approach is anchored by a sizable long-term capital base, experience in structuring technology-oriented transactions, and proven management techniques that yield flexibility and opportunity in private equity investing.
When evaluating a potential acquisition, Vista focuses on identifying the key value drivers for improving the business that are within the direct control of the company, regardless of market shifts or competitive dynamics.
Vista focuses on a set of levers that
apply to software businesses including expanded or refocused sales strategies, product and service pricing and packaging, recruiting and hiring processes, cost rationalization, product platform simplification, customer service enhancements and
customer
contract improvement. Vista generally only invests in opportunities in which the firm believes it can drive operational change. Vista takes a very active role in working with company management at all levels to drive change through the organization, and Vista remains very active with the company throughout its hold period. This is the reason why Vista added ACTIVE Network to its portfolio of companies.
In November 2013, Vista Equity Partners completed its tender offer for ACTIVE Network, the leading provider of cloud-based activity and participant management solutions for event and activity organizers. Vista
acquired all of the outstanding shares of common stock for $14.50 per share in an all cash deal, bringing the total transaction to approximately $1.05 billion. This transaction took place a little more than two years after ACTIVE Network went public. Vista’s strategy began by actively following the company and in September 2013, Vista signed agreement to acquire 100% of the Company in a highly competitive process.
With a customer base of 56,000 organizations, including Starbucks, YMCA, California State Parks, Triathalon America, Cisco Systems, IBM, and Bose Corp, driving 93.5 million registrations annually for over 200,000 events including business conferences, community programs, camping/hunting/fishing licenses, and sports races, ACTIVE Network fits Vista’s strategy of investing in companies that provide recurring revenue through proven technology services. For Vista, ACTIVE Network presented itself as a unique opportunity to grow and capture the online shift of the offline event management business.
According to Berkery Noyes’ latest research, the industry’s most active financial sponsor in 2011, 2012 and in 2013 year to date was Vista Equity Partners. Vista Equity Partners was also responsible for three of the top ten highest value transactions in 2013. As the Board of Directors of ACTIVE Networks was considering offers for the company, Vista is known for having a deep understanding of enterprise software and therefore distinguished themselves with the management and BOD of ACTIVE Network as the best stewards of the business going forward. In addition, Vista understood that adding ACTIVE Network to its arsenal of portfolio companies would help it deliver a more complete offering in Travel & Entertainment, especially combined with its strategic asset, Lanyon, which was acquired in December 2012. Vista’s record
in completing over $6B in Enterprise Software deals in the last 24 months combined with the certainty of its offer, was a compelling factor that the Board of Directors took into account in selecting Vista in this process.
Vista will strengthen ACTIVE Network’s operations through the implementation of standardized, tested, and proven processes and methodologies or Vista Standard Operating Procedures (VSOPs) that, combined with a unique, long-term perspective, encourages optimal business decisions,
enables
the pursuit of operational excellence, and drives maximum value creation for all shareholders. As software companies are inherently driven by the search for efficiency, Vista’s portfolio companies are well predisposed to adopt VSOPs and create greater profitability. Vista’s expertise in the software sector allows it to continuously develop and improve VSOPs based on feedback and lessons learned from its portfolio companies. Vista has a 100% success rate in creating value in all of its control transactions since 2000.
Vista seeks to grow ACTIVE Network’s revenues and profitability through increased participation, expanding event growth and increasing the number of sponsorships that drive its business. With a target market of approximately $10 billion in the U.S., and a similarly sized international opportunity, Vista will seek to capitalize on this growing market opportunity that has been fragmented and under-penetrated through centralizing and standardizing operations, restructuring the R&D organization, developing the inside sales function to increase market coverage and penetration, and evaluating and pursuing add- on acquisitions to increase market share and expand product reach into new markets and geographies.