AUBURN HILLS — When it comes to owners, the manufacturing management software developer Plex Systems is switching coasts.
New York-based Apax Partners announced that it would sell its majority stake in Plex, acquired in 2006, to San Francisco-based Francisco Partners, a technology-focused private equity firm.
Terms of the transaction were not disclosed.
Plex Systems’ flagship product, Plex Online, is a “shop floor to top floor” solution providing deep functionality for virtually every department within quality-driven manufacturers. The company has a broad customer base across the automotive, aerospace and defense, food and beverage and electronics industries, where manufacturers are turning to the cloud to streamline and modernize their global operations.
Francisco Partners identified Plex Systems as an early mover in the cloud ERP market with significant recurring revenue and strong growth opportunities.
“We believe that Plex Systems has the potential to lead the transition to cloud ERP for manufacturers, and that this will be as transformative as the adoption of cloud solutions has been to sales, marketing, and human capital management,” said Petri Oksanen, a principal at Francisco Partners.
Mark Symonds, CEO of Plex Systems, called the deal “real validation of what we’ve been able to accomplish over the past several years. Apax feels they got a very good return on their investment and they’re pleased. And there’s further validation that Francisco Partners sees what we see as far as the opportunity before us in the ERP market.”
Symonds said that “Francisco Partners shares our vision and sees the huge opportunity before us. We have entered an era where cloud computing is impacting virtually all business operations, and Plex Systems is among the leaders of this new model for technology development and delivery.”
Symonds said no change in management is planned, and the company’s hiring and expansion plans released early this year are still in place. The company has 25 to 30 current openings, and is negotiating for new headquarters space at 900 Crooks Road in Troy.
“This isn’t about changing direction or mashing us up with another entity,” Symonds said. “It’s more about ‘How can we help you grow faster? How can we help you do the things you’re already doing, except doing more of them?’”
Francisco Partners was advised by Pacific Crest Securities, and Plex Systems was advised by Lazard. Skadden Arps Slate Meagher & Flom provided legal counsel to Apax in the transaction.
Since its launch more than a decade ago, Francisco partners has raised about $7 billion and invested in more than 100 technology companies, making it one of the most active investors in the industry. The firm invests in transaction values ranging from $50 million to over $2 billion. More at www.franciscopartners.com.
Apax acquired a majority stake in Plex Systems in 2006 and supported the company’s growth into the leading provider of Cloud ERP solutions for global manufacturers. Plex Systems’ revenues have tripled since the company changed to a subscription-based business model in 2007, and its employee count has also grown by more than three times during Apax’s ownership. From 2007-2011, the company’s revenues increased by a 25 percent compound annual growth rate.
“Apax has been a great partner to Plex Systems,” said Mark Symonds, President and CEO. “They provided important strategic guidance as we transitioned to a subscription-based business model in 2007, and committed additional equity at a key point to accelerate Plex Systems’ growth. We will miss our collaboration with Apax even as we embark upon a new phase of our growth with Francisco Partners.”
Jason Wright, Partner in the Apax Tech & Telecom team, commented: “We are proud of our partnership with Mark Symonds and the entire Plex Systems team and the successes we’ve achieved together since 2006. The company has been unwavering in pursuit of its mission to enable manufacturers to dramatically improve their operations and lower their costs, and continues to demonstrate extraordinary growth as a true market leader in cloud ERP. We also are pleased that the exit from our investment in Plex Systems contributes to Apax’s track record of success in the software industry. Realized software investments since 2000 have achieved a weighted average return of 4.6 times for Apax Funds.”
The announcement made Wednesday was of a definitive agreement of sale. Closing is expected this summer, Symonds said.