PKWARE, Inc. Acquired by Novacap Technologies,
Maranon Capital, and Garrett Investments
MILWAUKEE (September 23, 2009) – Grace Matthews, Inc., a Milwaukee investment bank, announced today that PKWARE, Inc. (www.pkware.com) has been acquired by an investment group that includes Novacap Technologies, Montreal; Maranon Capital, Chicago; and Garrett Investments LLC, Milwaukee. Grace Matthews coordinated the formation of the investment group, negotiated the transaction with PKWARE’s shareholders, and invested in the transaction through Garrett Investments, an investment holding company affiliated with Grace Matthews.
PKWARE was founded in 1986 by the iconic Milwaukee software engineer Phil Katz, who passed away in 2000. The company develops and markets data file encryption and compression software that facilitates secure data storage and inter-network communications. PKWARE originated the popular “ZIP” file compression program that has been installed on millions of computers worldwide. Among IT professionals, PKWARE and its products SecureZIP® and PKZIP® enjoy a level of brand recognition shared by few others in the security and compression software industry.
Novacap Technologies was the lead investor in the transaction, acquiring the majority of PKWARE’s stock. Maranon Capital provided $38 million in financing for the transaction, with $24 million in senior revolving credit and term debt, $10 million in mezzanine financing, and $4 million in equity. Grace Matthews invested over $1 million in equity through its affiliate Garrett Investments.
“Grace Matthews advised the current shareholders when they bought PKWARE from Phil Katz’s estate in 2001, and we welcomed the opportunity to work with the company again so that this growing, innovative company would remain here in Milwaukee,” said John Beagle, Managing Director at Grace Matthews. “The Company is a real gem in Milwaukee’s business community, and attracts the kind of talented, high-technology workers who otherwise might be tempted to move out-of-state to a more ‘tech-centric’ area,” he added.
Doug Mitman, the Grace Matthews Managing Director who negotiated the transaction, commented: “Given the state of the economy, the mergers and acquisitions environment is extremely challenging, but this transaction proves that you can still close deals when you negotiate the right terms and are working with an excellent company. We were fortunate to find Novacap, who understood PKWARE’s potential and agreed to take a majority position in the equity, and Maranon, who generously supported the deal with debt financing and additional equity. Grace Matthews showed its’ commitment by putting up over $1 million for an equity stake through our affiliate Garrett Investments.”
ABOUT GRACE MATTHEWS
Grace Matthews, Inc., a Milwaukee, Wisconsin based investment bank,
provides merger, acquisition and corporate finance advisory services
to private and public companies. Over the past decade, Grace Matthews
has successfully completed over 150 transactions on behalf of clients
ranging from private, middle-market companies to large, foreign
or U.S.-based multi-nationals. For more detailed information on
Grace Matthews, Inc., visit www.gracematthews.com.
ABOUT NOVACAP TECHNOLOGIES
Novacap Technologies is a functional group within Novacap, one of
Canada's leading private equity firms. Novacap Technologies invests
in companies focusing on growth and market leadership in the information
and communication technologies sector. It partners with first-rate
management teams and actively works with them to build leading organizations
in their markets.
Novacap is the only firm to have won the Canadian Venture Capital and Private Equity Association's “Deal of the Year Award” twice. In 2000, Novacap won for its Venture Capital investment in InnoMediaLogic Inc. Then, in 2005, Novacap won again in the Private Equity category for its investment in Santé Naturelle A.G. Ltd. For more information, visit www.novacap.ca.
ABOUT MARANON CAPITAL
Maranon Capital, L.P. provides senior and mezzanine debt and equity
co-investment financing, primarily for companies in the lower middle
market. For more information about Maranon Capital, please visit
www.maranoncapital.com.
CONTACT:
Doug Mitman, Managing Director
dmitman@gracematthews.com
(414) 278-1120