DriveCam Adds $85M For Acquisition

San Diego, Calif.-based DriveCam Inc., a developer of video-based driver safety technology, has sealed $85 million from buyout firm Welsh Carson Anderson & Stowe. The funds are aimed at supporting the acquisition of RAIR Technologies, a provider of regulatory compliance technology for DOT-regulated fleets.

To continue funding rapid growth and market expansion, DriveCam, Inc., a global, SaaS-based Driver Risk Management company, announced today that it has entered into a definitive agreement to raise $85 million in investment capital from WELSH, CARSON, ANDERSON & STOWE XI, L.P. (WCAS), a New York-based private equity firm and global leader in the funding and development of information and business services providers. The investment is being made, in part, to fund the acquisition of RAIR Technologies, LLC, a leading provider of regulatory compliance solutions for DOT-regulated fleets. RAIR allows fleet operators to efficiently manage hours-of-service logs, CSA safety scores, driver qualification and vehicle inspection requirements.

The investment is a direct result of DriveCam’s pioneering leadership in the field of video-based driver safety and its growing customer base, including many of the largest and most prestigious fleets in the world. By consistently delivering customer value, DriveCam has achieved strong profitability, generated significant year-over-year growth and continues to win multi-year orders from both new and existing clients. The new investment will fund DriveCam’s aggressive growth agenda, including its acquisition of RAIR.

“We are very pleased to partner with DriveCam, the market-leading provider of driver safety technology and solutions,” commented Mike Donovan, General Partner at WCAS. “DriveCam’s management team has been at the forefront of industry innovation and operational excellence, and as a result, we see the very strong momentum in the business today continuing into the future.” WCAS joins DriveCam’s strong group of existing investors.

“It’s exciting to be recognized by leaders in the investment community for our hard work and success,” remarked DriveCam CEO Brandon Nixon. “With this investment, DriveCam will continue to accelerate its growth by expanding into new market segments and broadening its value proposition through strategic partnerships and targeted acquisitions, the first of which is RAIR.”

RAIR provides web-based safety and compliance services to many top fleets in trucking, distribution and transit, including 50% of the “Top 100” carriers in the U.S. and Canada. Its services include the processing and auditing of hours-of-service logs, CSA data analysis and management, driver qualification file auditing, vehicle inspection (DVIR) reporting and auditing, drug testing and more. RAIR’s services save fleet operators time, reduce exposure related to litigation or poor safety ratings and improve overall fleet competitiveness. By combining DriveCam and RAIR’s complementary services, clients will be able to take advantage of a suite of driver-centric services that will help fleet operators more efficiently manage their driver workforce.

“We’ve dedicated many years to building a business that is an industry leader, recognized for great customer service,” stated Greg Lofy, CEO of RAIR. “In DriveCam, we have found a strategic partner that shares our commitment to high-quality service and innovation – and is the unparalleled leader in driver safety. By joining forces, I’m confident we will be able to expand our technology and services to bring additional value to our customers.”

“We are only in the initial phases of delivering on all the benefits we can provide to the combined client base,” Nixon commented. “RAIR has a strong position in the DOT-regulated transportation market, which nicely complements DriveCam’s already strong client base in trucking, local distribution, services, utilities, transit and solid waste. Building on this acquisition, DriveCam is dedicated to investing heavily in our service offering through both organic growth and strategic acquisitions.”

The investment and acquisition are expected to close in early December 2011, subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Terms of the transactions were not disclosed. Barclays Capital Inc. served as exclusive financial advisor and exclusive placement agent to DriveCam on the transaction.

WELSH, CARSON, ANDERSON & STOWE (“WCAS”) is one of the largest and most successful private equity investment firms in the United States. Since its founding in 1979, WCAS has organized 15 limited partnerships with total capital of $20 billion. Since inception, WCAS has invested in over 160 companies in its core industries and has funded over 650 follow-on acquisitions. Across all WCAS Partnerships, the current portfolio consists of 30 companies with combined revenues of approximately $24 billion and EBITDA of over $3.3 billion. Investors in WCAS’ previous Partnerships include many of the nation’s most prominent institutions, including public and private pension funds, banks, insurance companies, university endowments and other institutional investors.

About RAIR Technologies, LLC
Founded in 2001, RAIR provides web-based safety and compliance services to over 300 truck and bus companies, representing more than 300,000 drivers. RAIR services include paper and electronic (EOBR) driver log auditing, CSA data analysis and management, driver qualification (DQ) file auditing and online DQ files, paper/electronic driver vehicle inspection report (DVIR) auditing and online vehicle files, drug testing and more. Because of its expertise in regulatory compliance issues for DOT-regulated fleets, RAIR has fostered long-term relationships with many of the largest and most prestigious fleets in trucking, distribution and transit, including 50% of the “Top 100” carriers in the U.S. and Canada.

About DriveCam, Inc.
As proven experts in the science of safe and efficient driving, DriveCam prevents collisions and reduces fuel costs by improving the way people drive. Our solution addresses the causes of poor driving by combining data and video analytics with real-time driver feedback and coaching, resulting in reductions in collision-related costs and fuel consumption in over 170,000 commercial vehicles. In addition, DriveCam has monitored and analyzed data from over 4 billion driving miles and holds the world’s largest database of risky driving, which is continually used to improve proprietary analytics and deliver insights into transportation industry trends. DriveCam was recently recognized as #30 in The Wall Street Journal’s listing of Top 50 Venture-Backed Companies.