RedPrairie Holding Inc., which had filed last November for an for an initial public stock offering, announced Feb. 22 that it has agreed instead to be acquired by a fund affiliated with New Mountain Capital, L.L.C., a leading private equity firm. Terms of the deal, which is expected to close by the end of March, were not disclosed.
RedPrairie, which develops software for inventory, warehouse, workforce and transportation management, is controlled by Francisco Partners, a Menlo Park, Calif., private equity firm that paid $240 million for a majority stake in 2005. Francisco Partners owns 89.7 percent of RedPrairie. "We registered our co with the Securities and Exchange Commission last November with the intention of recapitalizing the organization through a public offering," says Mike Mayoras, RedPrairie CEO. "As is not uncommon to that exercise, we attracted some interest from several organizations. Candidly, we really had no formal exercise or process except with the people from New Mountain Capital, who were exceptionally interested in our business model and our strategy, as well as our management team." After some quick diligence, he says, Red Prairie signed a definitive agreement to be acquired by New Mountain, a New York-based private equity firm with approximately $8.5 billion under management. New Mountain typically invests in growth-oriented organizations that have strong positions in their markets. The acquisition will result in no changes in Red Prairie's business plan, Mayoras says. "New Mountain Capital has said they like the vision of this company, the position that it has competitively in its markets and the solution set that it brings to the marketplace. For Red Prairie, this option gives us the opportunity for less risk and costs going forward and the ability to execute our strategy in a far more controlled environment."
Mayoras says Red Prairie is "extremely well positioned" to take advantage of its core markets in warehouse management and supply chain applications in a post-recession marketplace. In addition, he sees tremendous opportunity for the company to expand globally. "We already do more than 30 percent of our business volume outside the U.S.," Mayoras says. "We think that the world is changing, particularly as it relates to sourcing and the supply chain, and there is no question that this will open up opportunities for us." In addition, Mayoras believes there are growth opportunities in transportation and logistics that are equal to or greater than its traditional business lines of inventory and warehouse management. Red Prairie will increase its investments in these areas through organic growth and acquisitions, says Mayoras. While declining to offer specifics, Mayoras says "it is fair to assume that the categories in which we already are doing well are categories where we will to look to expand and gain market share. We think markets are in a unique place right now. We believe that our expansion internationally, in retail markets and in core functionality around warehouse management, transportation management and inventory management all provide us opportunities for quick growth."

Source: Red Prairie