Transaction valued at $21 million.
By: George Frey
WEST WINDSOR Princeton Softech, a pioneer in the active archiving technology industry, was acquired March 26 by two investment groups, Apax Partners Inc. of New York City and Philadelphia-based LLR Partners Inc., in a transaction valued at $21 million.
Formerly owned by Computer Horizons Corp. of Mountain Lakes, Softech is most recognized for its active archive solution software products, which help companies improve application and database performance and availability by improving data storage, the company said.
The investment, of which Apax provided two-thirds and LLR the remaining third, will be primarily applied toward marketing, business development and product development, officials with Softech said.
"This is a good thing," said Lisa Cash, the CEO of Princeton Softech. "When you are owned by a parent company, your business plan is subject to the strategic initiative of the parent company."
She explained that Computer Horizons Corp., a staffing and consulting company, had seen significant revenue reductions recently. She said there had been discussions at Computer Horizons about how to monetize the assets of Softech.
"We are in line to be the market leader of the industry," Ms. Cash continued. "The new owners are in line with our strategic initiatives, providing financial support to accelerate our business plan," which, she said, is a market that can be very profitable.
"There is a ton of data stored ineffectively," she said, adding that Softech has the products to store those data cheaply. If the data burden is brought off a company’s internal computer system and conveniently stored and accessed, it can greatly enhance the performance of the company’s computer systems.
Ms. Cash noted several industries that require huge volumes of information to be left on hand electronically for various reasons such as taxes or federal regulations, citing banking, insurance and the telecom industries as examples.
Princeton Softech says its software is more efficient, allowing companies to avoid costly computer upgrades. Its active archiving technology, introduced last year, can set aside infrequently used data while still maintaining easy access, and can quickly restore individual records while retaining their proper relationship with other records. Other archiving programs are limited to dealing with entire files, rather than individual records, the company says.
Ms. Cash said the new owners are looking forward to seeing a profit on their investment and that they could be looking to sell the company or have it go public, perhaps within three years.
Ms. Cash also said the company is poised to release several new products within the year. Archive software for its existing Clarify product would be released in four to six weeks, she said, which would be followed by Archive for Peoplesoft and Archive for Oracle Financials. She said the company is looking forward to extending its market share and providing its customers with "more out-of-the-box solutions."
Apax general partner Greg Case said Princeton Softech fulfilled all the criteria for a good investment. "They have a strong growth product," Mr. Case said. "They have a customer base around the world. They are far and away the leading company in archiving software solutions. They intrigued us. We think they are on the right path."
Mr. Case praised Princeton Softech’s products as "bullet-proof." He said many companies release a version of software that then essentially has to be de-bugged by consumers. "They have a terrific product and great support," he said. "We are the firm which puts in the necessary growth capital."
Apax Partners manages more than $11 billion on behalf of institutional investors worldwide. LLR Partners is a $260 million private equity firm.
Princeton Softech has offices in the United States, Australia and throughout Europe.