THL invests in inriver, and LLR backs Allmark Door, as e-commerce surge drives deals

Good morning, Hubsters. MK Flynn here with today’s Wire.

E-commerce, which has been soaring since the start of the pandemic, is continuing to drive private equity-backed deals, including two announced this morning.

High-growth market. Thomas H. Lee Partners is making a majority investment in inriver, which develops software designed to help companies deliver revenue-driving product information management, or PIM, across customer touchpoints. Estee Lauder, Cartier, Bacardi, and Kohler are among the company’s clients. The total deal value is approximately $400 million, sources familiar with the deal told PE Hub.

Verdane, the European specialist growth equity investor is retaining a significant stake in the target. The transaction includes a significant primary capital investment to support inriver’s product development roadmap and significantly expand its presence in North America and Europe, to meet the demands of a high-growth market, THL said.

Headquartered in Malmö, Sweden, with its North American headquarters in Chicago, inriver seeks to help manufacturers, distributors, and retailers manage, distribute, and optimize vast amounts of product information at scale to drive revenue, according to the company.

“Inriver has developed an extremely strong SaaS product and very high customer advocacy in the PIM market, which benefits from outstanding long-term secular growth trends,” said Jeff Swenson, managing director and head of vertical software at THL. “The company enables customers to seamlessly power complex use cases in omnichannel e-commerce, which we believe is highly differentiated.”

Pål Malmros, partner at Verdane, said: “Since Verdane first invested in inriver, the company has grown 10x in size and established itself as a global leader. We are certain that through this partnership with THL, inriver has secured the perfect backing to continue on its strong growth path….”

Smooth operations. Along with the surge in e-commerce, the need for warehouses has risen. One company that aims to help warehouses run more smoothly is Allmark Door. Headquartered in Springfield, New Jersey and founded in 1993, Allmark provides installation, maintenance and replacement services for industrial doors and loading docks. Earlier this morning, LLR Partners said it has invested in the company.

PE Hub’s Obey Martin Manayiti spoke with Katie Lankalis, a vice president at LLR, together with Tom Woodruff, the new chief executive of Allmark, to learn more about the company and why the Philadelphia PE firm is backing it.

“Some of the trends that we were looking at include the growth in e-commerce and the increasing volume of goods that are getting shipped across the country and the proliferation of distribution centers that are being built out,” Lankalis said.

Warehouse space is in short supply these days. For example, the logistics vacancy rate declined to an all-time low of 3.4 percent in the fourth quarter of 2021, down 1.4 percent from the fourth quarter of 2019, according to real estate developer Prologis.

Glitches in warehouse facilities are among many snags slowing down the supply chain. Not being able to get goods in and out of facilities just exacerbates the problems, Woodruff said.

“We make sure that the doors and loading dock equipment are properly maintained, serviced and properly installed to allow [customers] to have full usage of their facilities,” said Woodruff. He is joining Allmark from Reedy Industries, where he was the chief operating officer. Add-on deals are expected.

“We view this as a fragmented market where there are a large number of regional or local players that can be very interesting strategic partners and acquisitions for Allmark Door,” Lankalis said.

For more, read the full story.

Uphill battle. “An unintended consequence of the SEC’s proposed tighter regulation of private equity could be increasing the cost burden on smaller funds, which would impact the growing community of diverse managers that have been making inroads in the industry,” Buyouts’ Gregg Gethard writes.

“The nature of having LPs wanting to give diverse managers a chance has been a long-standing challenge,” said Robert Greene, president and CEO of the National Association of Investment Companies, the nation’s largest network of diverse-owned alternative investment firms. “Groups like mine have fought more than 35 years trying to get investors on board with us.”

But the new regulations that come with steeper compliance costs and demands will hurt smaller funds, according to Greene. The proposed regulations “are potentially pushing logs down a hill just as people of color and women are starting to climb the hill,” Greene said.
The potential new rules could also keep people from leaving old firms to create their own opportunities, Greene said. “Diverse managers are doing a great job and are one of the fastest growing segments in new fund creation. We don’t want to see overburdensome regulations and increased risk preventing people from moving from large firms to small firms,” Greene said.

Read the full story.

That’s all for now.

Until tomorrow,
MK