Performant Capital, led by ex-Vista operators, bets on MarTech in debut deal

Marketing technology tailored exclusively to the automotive industry makes for an attractive PE investment due to the consolidation opportunity, the investors said.

Performant Capital, launched by former Vista portfolio operators, is sticking to what it knows best as it forms its first platform company in marketing tech.

The Chicago firm jointly invested in and merged MyShopManager and uNotifi, a marketing software company for independent auto repair shops and a cloud-based customer relationship management company for franchise dealerships.

The marriage of the two businesses will form a new company called Dealer Holdings.

Dealer Holdings will cover the auto repair market and seek to grow both organically and through additional M&A, partners Chris McLaughlin and Michael Ciaglia told PE Hub.

Marketing technology, or MarTech, tailored exclusively to the automotive industry, makes for an attractive PE investment due to the consolidation opportunity, the investors said.

“There are many things about the market that we like: the overall size, the scale, the technology, the fragmentation – all of it goes within [the] automotive SaaS market generally,” McLaughlin said.

“But in operating and competing within the landscape, we are very bullish on [the] specific features and functionality in [Dealer Holdings’] tool set to drive revenue opportunities for underlying software clients.”

Dealer Holdings marks the first platform investment for Performant since its formation in early 2020. The private equity shop was launched by McLaughlin, a former principal at CIVC Partners, alongside Ciaglia and Jeff Dillon, former industry executives.

Ciaglia and Dillon respectively were the head of Corporate Development and CTO of Market Track, later known as Numerator, a Vista Equity portfolio company.

That background has influenced Performant’s investment strategy to a certain extent. “We are not running the same model as Vista; Obviously we [are investing in] much, much smaller assets,” Ciaglia said.

But generally, the team, like Vista, believes that a sponsor can create value through operational change, the partner told PE Hub. “That ethos we share with Vista,” he said.

Performant focuses on the lower mid-market, specializing in software-as-a-service companies where the firm can add value by advancing the companies’ operations.

“There are opportunities with these smaller scale SaaS businesses where the ability to go and improve operations and help accelerate growth of these businesses can create the exceptional equity creation opportunity for our investors,” Ciaglia said.

To the extent that Vista is a software-centric investment platform, “we are certainly investing in what we know and where we have operated,” he said.

The firm invests in companies with enterprise values as low as $5 million, annual recurring revenue north of $3 million, and EBITDA ranging from $1 million to $8 million.

Performant doesn’t have a formal fund at this time. The firm invests on a deal-by-deal basis through its relationships with institutional investors, high-net individuals and family offices.

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Correction: The spellings of uNotifi and Dealer Holdings were corrected as well as Michael Ciglia’s title at Market Track.