2014 Year-End Review


The last 12 months continued to be active:

  • Three new platform investments – BlueSnap, Periscope and ScentAir
  • 19 add-on acquisitions at seven portfolio companies
  • Two portfolio company exits – Injured Workers Pharmacy and Sequoia Golf Holdings
  • Recruitment of two new CEO’s and nine other c-suite executives at 10 portfolio companies

We are optimistic as we enter 2015. We believe the strengthening of the US economy witnessed in the second half of 2014 will continue due to (i) broad-based benefits from energy input price declines, (ii) continued low interest rates caused in part by foreign countries’ economic weakness, (iii) (relative) political stability in Washington, (iv) further clarity on the regulatory environment, (v) continued technological improvements and (vi) strengthening US consumer demand.

Despite these macro themes, obstacles and risks remain including financial market herd mentality and volatility; energy sector dislocation; foreign debt, currency and economic crisis; global geopolitical risk and international instability; populist rhetoric from both left and right and bad government policies; a highly competitive business environment; excess leverage, capital formation and valuations in the deal market.

Regardless, Parthenon Capital Partners’ (“Parthenon”; investment strategy remains the same — we partner with strong management teams to build and grow technology and service-based businesses with recurring revenues, defensible niches and technology- and/or IP-based competitive advantages. This focus allows us to better assess risk, seize opportunities and ultimately be better partners for bankers, financing sources, management teams and entrepreneurs in the face of dynamic and competitive markets.

Highlights include:

  • Growth investment in BlueSnap (“BlueSnap”;  BlueSnap is a global payment gateway supporting shoppers and merchants across 180 countries in 29 languages, 60 currencies and 110 payment types.  BlueSnap has optimized cross-border purchasing experiences and payment processing through advanced technology and dynamic e-commerce tools.  Parthenon teamed with CEO Ralph Dangelmaier and Great Hill Partners in this growth investment.
  • Control recapitalization of Periscope Holdings (“Periscope”; and simultaneous merger with BidSync (“BidSync”;  The combined company is the leading provider of e-procurement solutions and software to public sector agencies and education institutions.  The company’s end-to-end “procure-to-pay” solution helps customers streamline their processes while reducing costs and increasing transparency.  We partnered with Brian Utley, the CEO and founder of Periscope, to effect this transformative merger and are excited about building the leader in public sector procurement.
  • Acquisition of ScentAir Technologies (“ScentAir”;, the leading global provider of scent solutions to major hospitality, healthcare, casino, retail and real estate operators.  Our investment in the company is another example of our expertise investing in high-growth, recurring revenue technology-enabled service businesses.  Growing at 30% a year, ScentAir is the leader in an emerging market poised to experience increased adoption.  We are excited to be partnering with industry veteran Andy Kindfuller to create a world-class company and take advantage of first mover status.
  • Sale of Injured Workers Pharmacy (“IWP”; in July after a three-year investment.   During this period, we identified and recruited Ken Martino to take over as CEO from the founder, built-out the team and more than doubled the size of the business organically through increased national penetration and entry into adjacent markets.  IWP is the leading national home delivery pharmacy servicing patients in the workers’ compensation and automobile personal injury protection markets.  IWP was acquired by ACON Investments.  We are very pleased we had the opportunity to work alongside Ken and the IWP team and proud of their accomplishments.
  • Sale of Sequoia Golf Holdings (“Sequoia”; to strategic acquirer ClubCorp (NYSE:MYCC) after an 11 year investment period.  In 2003 we partnered with industry veteran Joe Guerra and built what eventually became the second largest (after ClubCorp) owner and operator of private golf clubs in the US with 50 clubs nationally and significant clusters in Atlanta, Houston and Denver.  While an out-of-favor and cyclical sector, the outcome validates our long-term orientation, ability to work and create strong alignment with management and our disciplined consolidation and operating strategy.  Sequoia is a special company and we wish ClubCorp and the team the best of luck in their future endeavors.
  • Following the August 2013 acquisition of Bracket Global Corporation (“Bracket”; from Express Scripts (“Express”; NASDAQ:ESRX), we have successfully carved Bracket out of Express and built-out finance, HR, IT and other back-office and administrative functions.   We also recently recruited a world-class management team led by Jeff Kinell, a veteran senior executive and former CEO of technology-based life science companies.  Bracket provides clinical trial software and technology-enabled services through a range of eClinical and Scientific Services solutions.  It assists pharmaceutical companies and CROs to improve and optimize clinical trial data capture and integrity, site monitoring and site performance to ultimately achieve greater trial outcome certainty.  With significant company building milestones achieved in the last 18 months, Bracket plans to take advantage of growth driven by increasing clinical trial complexity and specialization and the company’s innovative technology and expertise.

We are excited to welcome Anthony Orazio as a vice president from Oak Hill Partners and new associates Brad Blaser from Cain Brothers, Hemal Patel from Deutsche Bank and Matt Wender from Moelis & Co.

Our primary investment criteria include:

  • Equity investments of $20 million – $125 million per transaction and total enterprise value of    $35 million – $500 million
  • Industry focus
    • Financial and insurance services
    • Healthcare services
    • Business, information and technology services
    • Common criteria: recurring revenue streams, high intellectual property content, information or technology-intensive operations, route-based businesses
    • Buy-and-build situations
      • 2/3’s of our portfolio is highly acquisitive, averaging eight add-ons per company

In highly competitive markets, we continue to focus on key themes where we have substantial experience and expertise including sectors recovering from regulatory assault; incomplete management teams and/or complicated management succession dynamics; aggressive buy-and-build strategies; and disruptive technologies and first movers.   Our experiences and resources allow us to move quickly and work closely with operators to understand complex situations and to optimally position and build businesses.

Thank you for all your help and support.  Our partnerships with you are essential to our business and we look forward to working with you in 2015.  Don’t hesitate to reach out to any member of the Parthenon Capital Partners team.  And if in Boston or San Francisco, please stop by to see us.