Like a lot of veteran venture capital firms with large funds, Battery
Ventures has recently increased its emphasis on late-stage deals. It has even taken
companies private as platforms for consolidation in industries that may not being growing as quickly as sectors it targets with early-stage investments.
Battery's latest foray into the later-stage investment scene didn't go to the
public markets, but to a managed sale announced today by 3M Corp., which is selling
HighJump Software, a venture-backed supply-chain software company it acquired
from Gemini Investors, St. Paul Venture
Capital and Upper Lake Growth
Capital Partners in 2004, to Battery. 3M originally acquired the company to use its supply-chain chain expertise to promote its other products. 3M continued to grow it
organically, even acquiring additional technology to move into the beverage
and transportation industries.
But 3M determined that other products and services in its portfolio address the market
in different ways and that HighJump as a software provider would be better
served with independent ownership. Battery Ventures' general partner Dave
Tabors (pictured) says the firm saw an opportunity to acquire the company and put it on a
footing for more aggressive growth both internally and through acquisitions.
"We had been looking
for a platform asset in the supply-chain space that had enough scale as a
starting point before 3M made the strategic decision to divest," Tabors says. "It
has done quite well under 3M, and they have continued to innovate the product
to where it is considered by many, including us, as the leader in the market."
Battery closed a $750 million new fund last
summer. Tabors says the firm will look for additional deals where it can acquire lat- stage or public companies as platforms for
growth, even putting some leverage on the companies, as it did with
HighJump, bringing in Wells Fargo Foothill as a debt investor.
Tabors says HighJump
is profitable, but while terms of the deal were not
disclosed, he says Battery will put some additional working capital
into the company in addition to purchasing it outright from 3M. Although Tabors says he doesn't like to use the term rollup, he expects to use HighJump as a platform for buying additional supply-chain software companies
and may bring in additional investors as it does so.
Tabors also says the firm has
no immediate plans to alter HighJump's business model, which involves a mix of
purely licensed software and hosted subscription sales, adding that the market
will determine the extent to which it offers its software as a service. -- Clifford Carlsen
See May 9 press release from 3M
See May 9 story on Battery deal from the Minneapolis Star Tribune
See Battery Ventures' investment portfolio
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