One deal last year involved a breed of software company that played to Michigan’s strengths — combining manufacturing, finance and technology.
Plex Systems Inc. in Auburn Hills makes software that monitors manufacturing production lines while tying that data with back-end office functions such as accounting. The company was founded in 1995.
Plex generated $50 million in revenue last year and has been growing at an average annual pace of 27 percent for the past five years, CFO Michael Twarozynski said. In 2010, the company reported that 2009 revenue had grown 14 percent to $26 million despite the auto industry crash.
Last year, Plex was sold to Francisco Partners Management LLC of San Francisco for an undisclosed amount. Crain’s list of M&A deals for 2012 put the figure at more than $50 million. CEO Jason Blessing, who joined the company in January, said the price was “significantly more” than that.
Blessing previously was senior vice president of application development at Oracle Corp. and is a graduate of the University of Michigan.
The Francisco deal was mostly cash; less than 15 percent was debt and it was all senior debt, Twarozynski said.
“We are a growth play, not a typical private equity play,” he said. “We’re more like a venture play. Francisco didn’t want to load us up with debt.”
Twarozynski said the company’s previous owner, the London-based private equity company Apax Partners LLP, had received inquiries before the Francisco deal.
“Over the past couple of years, we had inbound interest from strategic players and private equity firms,” he said, but Apax wasn’t ready to cycle out yet. Last year, some unsolicited offers came in, prompting Apax to look at what the market was offering. That search led to the Francisco deal.
In December, Palo Alto, Calif.-based Accel Partners invested $30 million for a minority stake in Plex. Francisco asked Accel to come on board because of its track record driving growth from the board level, Blessing said.
The goal is an IPO on a timeline of three to five years, based on current economic trends, Blessing said. The company thinks its software can be applied more broadly to other industries.
Plex plans to invest in its technology and expand its sales and marketing staff while targeting more industries and regions beyond its Michigan-centric automotive business. First up will be the food and beverage and electronics assembly industries, with better overall coverage in North America this year. In the next few years, Plex will target Europe and Asia, Blessing said.
No acquisitions are planned as the company concentrates on internal growth, he said.
March 10, 2013 | Crain’s Detroit Business – New Michigan Deal Supplement