Diversis Capital to make 10x on sale of ArrowStream

Tailwind Capital is buying the provider of supply chain management software for the foodservice industry.

Diversis Capital is set to make 10x its money on the sale of supply chain management software provider ArrowStream, a source familiar with the deal told PE Hub.

The buyer is New York mid-market firm Tailwind Capital, an announcement revealed on Thursday. Financial terms were not disclosed.

ArrowStream, based in Chicago, is a cloud-based provider of end-to-end supply chain management software for the foodservice industry.

The company connects over 250 restaurant chains, 1,000 distributor locations and 8,000 suppliers on a single platform. ArrowStream serves well-known brands such as Raising Cane’s Chicken Fingers, Shake Shack, Wendy’s, Inspire Brands, QDOBA Mexican Eats and Subway, among others.

Diversis acquired ArrowStream in 2017 from the founding family as a pre-fund deal. The firm’s inaugural fund closed in June 2019 at its hard cap of $255 million.

Diversis worked collaboratively with ArrowStream’s management to invest in the company’s technology platform in order to enhance its functionality and broaden its presence in the foodservice industry, the news release said. Diversis also helped to strengthen the management team and expand sales and marketing programs.

ArrowStream’s recurring revenues organically tripled during Diversis’s ownership, the press release said.

Founded in 2013, Diversis is a software and technology-focused private equity fund that invests in lower middle-market companies, targeting situations where it can add unique value to grow the business.