TA Associates has invested C$98 million in Radialpoint, a Montreal-based provider of managed digital home security and care service to broadband service providers.
TA Associates, a leading growth private equity and buyout firm, today announced it has completed a C$98 million investment in Radialpoint, a Montreal-based provider of managed digital home security and care services to the world’s largest Broadband Service Providers (BSPs). Proceeds from the investment will be used to support growth initiatives of the business, including investment in new products and services. Further terms of the transaction were not disclosed.
Founded in 1997, Radialpoint provides managed security and care solutions for the world’s largest BSPs via a private-label, software-as-a-service (SaaS) delivery platform. Radialpoint’s offerings currently include a range of desktop security services, including anti-virus, anti-spyware, firewall, privacy manager, fraud protection, parental controls, backup and restore, PC optimizer and pop-up blocker. Radialpoint customers include leading broadband carriers such as Verizon in the U.S., Virgin Media in Europe, and Bell Canada and TELUS in Canada. Through its clients, Radialpoint’s services are currently available to more than 20 million broadband subscribers globally.
“We are pleased to complete this investment in Radialpoint,” said Hythem T. El-Nazer, a Vice President at TA Associates who will join the Radialpoint Board of Directors. “Radialpoint’s offering addresses many of the business priorities of BSPs, including increasing service revenue and customer acquisition, and reducing churn. There are several potential avenues of growth to Radialpoint’s business and we look forward to working closely with the company’s talented management team as they seek to further expand the business and increase market share.”
“We are delighted to partner with TA Associates to expedite our growth plans,” said Hamnett Hill, CEO of Radialpoint. “We believe that we have the market leadership, financial success and differentiated market strategy to position us for rapid growth in the emerging digital home security and care space. TA brings deep technology and communications expertise and a proven reputation as a successful investor, providing meaningful insight and value to its portfolio companies. TA’s interests are perfectly aligned with our goals of expanding our sales efforts and addressing additional markets, and we anticipate a very beneficial relationship.”
There are currently more than 300 BSPs globally with a total of 350 million subscribers. Subscriptions are expected to grow 12 percent annually by 2012 to more than 570 million, according to Parks Associates, a leading research and analysis firm focused on the digital home environment. Parks forecasts a $2.6 billion market for ISP-managed Internet security and care services by 2012 in North America alone. Parks further expects the market penetration for managed Internet security services to climb from 9 percent in 2008 to more than 17 percent by 2012. Its research indicates that, in terms of digital home services, automated PC maintenance is in highest demand with 32 percent of U.S. Internet users expressing interest, followed by unlimited tech support (24 percent), technical troubleshooting (19 percent) and online storage (8 percent).
“Broadband customers are increasingly seeking professional help from their service providers to protect the growing number of broadband connected devices and digital assets from Internet menaces and to optimize their digital experiences,” said Michael Cai, analyst at Parks Associates. “Radialpoint, with its penetration among major broadband service providers, flexible SaaS delivery system and a strong focus on end-user experiences, is well positioned to become a market leader.”
“Digital home management and security delivered as a managed software service is a nascent market,” said Jonathan W. Meeks, a Managing Director at TA Associates who will also join the Board of Radialpoint. “It is anticipated that there will be substantial growth, particularly in the digital home security and care market, as digital home networks grow in complexity and consumer IT frustrations mount. With their deep customer knowledge, billing relationship and connection to the home, BSPs are in a prime position to service these clients using a SaaS platform and services provided by industry leaders such as Radialpoint.”
TA Associates has four decades of investing experience, focusing on profitable growth companies. During that time, the firm has invested in more than 60 software companies. Some of TA’s prior investments in the software sector include BMC Software (NYSE: BMC), Cadence Design Systems (NASDAQ: CDN), InstallShield Software, McAfee (NYSE: MFE), Monotype Imaging (NASDAQ: TYPE), Numara Software and Sophos.
Goodwin Procter served as legal counsel and Deloitte & Touche provided financial advisory services to TA Associates. Osler, Hoskin & Harcourt LLP served as legal advisor to Radialpoint.
Radialpoint is a leading provider of managed Internet security and digital home care services for Broadband Service Providers (BSPs). Its value added service (VAS) solutions and managed delivery platform enable ISPs to generate new revenue and significantly lower operational costs associated with supporting and bringing new Internet services to market. Representative customers include AT&T / BellSouth and Verizon in the U.S.; ONO and Virgin Media in Europe; and Bell Aliant, Bell Canada, TELUS and Vidéotron in Canada. Radialpoint’s VAS solutions are currently available to more than 20 million broadband subscribers worldwide. Radialpoint is headquartered in Montreal, Canada, with offices in Europe. More information about Radialpoint is available at www.radialpoint.com.
About TA Associates
TA Associates, founded in 1968, is one of the largest and most experienced private equity firms. With offices in Boston, London and Menlo Park, the firm manages more than $12 billion in capital and has invested in more than 380 companies. TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, healthcare, business services and consumer industries. More information about TA Associates can be found at www.ta.com.
Safe harbor statement under the U.S. Private Securities Litigation Reform Act of 1995: Statements made in connection with this release which are not historical fact, such as forward-looking statements concerning future financial performance and growth, involve risk and uncertainties. Such statements are subject to various factors that could cause actual results to differ materially from those set forth in the forward-looking statements. Any forward-looking statements represent the best judgment of TA Associates and Radialpoint as of the date of this release. TA Associates and Radialpoint disclaim any intent or obligation to update any forward-looking statements.