From the day RedPrairie Corp. filed to sell stock to the public, New York financiers began drilling down on the details of the Brookfield software supplier's business.
One of them, New Mountain Capital LLC, said on Monday it would buy the company.
The company expects the transaction to occur by March 31, said Michael Mayoras, RedPrairie's chief executive officer. Terms of the purchase agreement weren't disclosed.
If completed, the deal will end RedPrairie's plans to go public. The company had filed with federal securities regulators in November for an initial stock offering to raise up to $172.5 million.
"An IPO is basically a stalking horse to a sale," said Ron Miller, managing director at Cleary Gull Inc., Milwaukee.
RedPrairie, which develops software that helps manufacturers, distributors and retailers manage their workforce, inventory and transportation, was approached by New Mountain in mid-December, Mayoras said.
The New York private equity firm says it manages about $8.5 billion of private equity funds. Mayoras said the deal will help RedPrairie achieve the goals it set out in its offering documents, which include expanding its presence in international markets, building more strategic marketing partnerships and making strategic acquisitions.
"This allows us to actually accelerate our growth plans in a far more controlled way," Mayoras said. At private companies, management can operate in a "more quick and controlled fashion," he said.
More than 300 of RedPrairie's global workforce of about 1,100 employees are in Wisconsin, Mayoras said. Another 240 are in Atlanta.
The company has no plans to reduce its workforce, Mayoras said.
"The Milwaukee area is a key part of our business strategy and will continue to be a key part of our business strategy," he said when asked if the company had any plans to move its headquarters.
New Mountain generally invests from $100 million to $500 million per transaction, according to the firm's Web site. It was founded in 2000 by Steven B. Klinsky, who has more than 30 years of deal-making experience and has done transactions with companies that include General Instrument Co. and Sybron Inc.
RedPrairie currently is controlled by Francisco Partners, a Menlo Park, Calif., private equity firm that says it has about $5 billion of capital under management. Francisco Partners paid $240 million for a majority stake in 2005, and owns 89.7% of RedPrairie, according to documents filed with the U.S. Securities and Exchange Commission.
Francisco Partners also owns Hartford-based API Software Inc., which it acquired in 2008 with the intent of building on its expertise in health care workforce management technology.
Erez Goren, former CEO of Atlanta-based BlueCube Software Inc., owns another 10.3% of RedPrairie, the filings said. Mayoras owns 2% of the company, the filings said. BlueCube is one of the five companies RedPrairie has acquired since 2005.
In documents filed in connection with the IPO, RedPrairie said it wanted to use proceeds to pay unpaid dividends on its preferred shares and to repay some of its $216.4 million of debt.
The firm had sales of $292.9 million in 2008, with $10.7 million of net income, the filing said. The company said in 2005, before making the five acquisitions, that revenue was about $140 million.
"If this was a business that was serious about going public, it has to be a good business," said Doug Mitman, a managing director at Grace Matthews, a Milwaukee private-equity firm.
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