M&A at Accellos

Contact: Brenon Daly

Another supply chain management (SCM) rollup is getting rolling. Colorado Springs, Colorado-based Accellos has already closed four acquisitions and has a letter of intent in place for its fifth. Backed by a handful of private equity (PE) firms, Accellos began shopping back in October 2006 with the double-barreled purchase of Headwater Technology Solutions and Radio Beacon. The pair of deals gave Accellos $15m of combined revenue out of the gate. The company added one company in both 2007 and 2008.

As it was closing the purchase of Prophesy Transportation Solutions last September, Accellos also pulled in a $28.5m second round of financing. (That brought its total funding to $54m, although it still has $20m of that in the bank.) Accellos, which projects that it will wrap this year with some $45m in sales, says it’s only about halfway through its shopping spree. (It’s looking for companies with revenue of $4-8m.) The company indicated at this week’s Montgomery Technology Conference that it will probably need to close a total of 9-10 deals in coming years to hit its goal of more than $100m in annual sales.

If Accellos’ strategy sounds familiar, it’s because at least two other PE-backed companies have also set about rolling up the SCM market. Battery Ventures picked up HighJump Software for $85m last May, and then tacked on BelTek Systems Design last November and Insight Distribution Software a month ago. And since Francisco Partners acquired RedPrairie in May 2005, the company has inked seven acquisitions.