accusoft and northbridge
TRANSCRIPT
Accusoft and North Bridge: A Partnership for Growth
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Results Focused
Growth Oriented
Entrepreneur Friendly
North Bridge Overview
• $530 million Venture Partners Fund VII
• Investments of $250,000 - $30 million
• Focus on companies with $0 -$10 million in revenue
• $580 million Growth Equity Fund II
• Equity investments of $15 - $100 million
• Focus on companies greater than $10 million in revenue
• We don’t have a playbook; we listen to our CEOs
• Our capital is flexible to solve your needs
• Our expansive network offers numerous customer introductions
• Independent board governance assists with long-term strategic planning
• Leverage strong relationships with Strategics and the capital markets
• Achieved results: Acquia, Clarity Software, Demandware, Dyn, Ingenious Med, Jive Communications, Proto Labs, RuffaloCODY and SmartPak
North Bridge is a leading venture capital and growth equity firm that manages $4 billion in total capital and invests in rapidly growing technology and technology-enabled companies
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North Bridge Growth Equity Overview
$580 million Growth Equity Fund II
Fund Overview • Capital: $1.1 billion in growth equity capital AUM
• Investment Type: Growth equity capital to fund liquidity, growth and acquisitions
• Investment Size: At least $15 million of equity
• Industry Focus: Technology & tech-enabled businesses
• Experience: Over 75 years of growth equity investing and senior operating experience
• Affiliation: Access to network and insight of North Bridge Venture Partners, a premier early stage investor
Investment Profile • Experienced management team
• Large, growing, and dynamic market
• Revenues of $10 - $150 million
• Rapid growth
• Capital efficient businesses
Transaction Characteristics • Partnership approach
• Straightforward investment structures
• Board representation
• 3 – 7 year investment horizon
• Typically unlevered transactions
The North Bridge Team
• Douglas Kingsley • Mike Pehl • Roshen Menon • Jim Moran • Russell Pyle
• Kaitie Donovan • Holly Maloney • Shamit Mehta • Won Park
• Will Alden-Dunn • Mark Crane • Patrick Devine • Vicky Guo • Charles Ha • Steve Isom • Andy Lefkarites • Justin Wang
Partners
Principals / VPs
Associates
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AP Automation Market Overview
• Paper processes consume time and space
• Each step in a manual process increases the likelihood of further delays, especially when an invoice goes missing
• Only way to increase speed of processing under this system is to hire more staff, creating additional costs per invoice
• Data capture systems use a combination of optical character recognition, data extraction algorithms, and electronic data processing
• Once invoice data has been extracted or “captured,” an automated solution can search the buyer’s ERP system for purchase orders or other proof that the invoice is valid, and transfer funds to a vendor’s account
• End-to-end integrated data also provides management with a 360-degree view of spending, helping senior management spot trends, and allowing treasury to more effectively manage cash
Invoice Automation: Capture, Store, Integrate, Payment, Measure
Current Paper Processes
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AP Automation Market Opportunity
• Forecast to reach $1.7 billion in 2013, a 11.9% increase from 2012 revenue of $1.5 billion
• AP Automation Market-based delivery will experience healthy growth through 2016, when worldwide revenue is projected to reach $2.4 billion.
• Increasing familiarity with outsourced and managed services such as approval workflow, electronic invoicing and payments continued to attract interest from controllers and finance managers.
• Market has benefited from demand to hold down finance staff budgets, the growth of one-stop managed services and interest in cloud computing
US Market
$1.55$1.70
$2.40
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2012 2013 2016F
AP Automation Market Size (1)
(1) Henry Ijams, Research Director at PayStream Advisors (2013)
Emerging Innovators • Supply Chain Finance • Dynamic Discounting Early Adopters • E-Invoicing • Electronic Payments Solutions Majority • Document and Data Capture • Matching and Approval Workflow Laggards • Paper Invoice and Check
Market Lifecycle
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Cost Savings
• Automation creates efficiencies up and down the financial supply chain
• Automating even part of the process, such as matching invoices to POs, helps reduce changes for mistakes or fraud. Heightened visibility via an automated process quickly brings issues or exceptions to light, allowing for greater scrutiny
Compliance Standards
• Best-in-class solutions ensure easy access to data necessary to meet regulatory requirements
─ In addition to the operational relief automation offers over paper-based systems, automated processes provide companies with easy-to-follow audit trails and process controls required for compliance with increasingly complex and demanding government regulations, including Sarbanes-Oxley and the Foreign Corrupt Practices Act
Benefits of Invoice Automation
AP Automation Product Overview
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North Bridge Can Add Significant Value
• Provide strategic guidance and help scale market-defining companies ― Serve as a sounding board for management as well as leverage deep experience investing in technology
companies of a similar profile
― Help you continue to build on your company’s success and become the undisputed leader in the Accounts Payable / Procure-to-Pay Automation space
• Assist with all avenues of growth ― Aid in industry vertical sales opportunities as well as geographic expansion
― Share growth infrastructure best practices
― Serve as an outsourced corporate development arm to identify and evaluate acquisition and business development opportunities
• Augment the senior team, if necessary ― Continuously attract top management talent to the company and fill senior leadership roles, where appropriate
― Scores of financial technology, infrastructure, software, and business processing experts in the North Bridge network
• Build out world class Board of Directors ― Work closely with management to understand what perspectives would be most useful to identify and recruit
accomplished and talented additions to the Board of Directors
― Have recruited at least two outside directors per investment
• Prepare and position for desired exit ― Deep relationships with investment banks, private equity buyers, and Fortune 500 corporate development arms
― History of successful strategic and public market exits, including top performing recent IPOs
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Internet Banking and E-Billing Platform
Leading provider of financial electronic commerce services and products, such as electronic bill payment and internet banking
(NASDAQ: CKFR, Acquired by Fiserv)
North Bridge has helped scale market-defining companies similar to Accusoft
Provide Strategic Guidance
Mobile Payments Platform
Cloud-based mobile wallet and mobile payment solutions for retailers, banks and processors (Acquired by Paypal)
E-Commerce Infrastructure SaaS
A leading on-demand eCommerce platform incorporating the functionality, customization and flexibility of an in-house
application
Tech-Enabled BPO Solution
Tech-enabled service provider of fundraising and enrollment management solutions for the higher education market
E-Billing and Customer Self-service Platform
Leading comprehensive software platform for e-billing and customer self-service software solutions (Acquired by
Siebel/Oracle)
Document Management and Workflow Software
Leading provider of cloud based software which enables its clients to effectively create, manage and track documents and health
plan data for member communication
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Assist with all Avenues of Growth • Geographic know-how
― We have deep experience in building global companies, and the challenges and opportunities that come with them
• Team building and access to network resources
― Continuously attract top management talent to our portfolio companies, where appropriate
― Deep experience investing in and partnering with operators in the financial technology, infrastructure, software, and business processing industries providing access to relevant industry experts and potential channel partners
• Bolstering sales organization
― Expertise in building focused sales and marketing teams and strategically combining them with the existing sales organizations
• Outsourced corporate development
― North Bridge interacts with over 10,000 privately held companies each year
― We have identified and evaluated over 700 acquisition targets for our portfolio companies
North Bridge Portfolio Company Presence
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Need: Strong technical background to further enhance and accelerate its product development
Matt Larson (Chief Architect): Previous VP of Research and Director at Verisign Labs Dave Connors (VP of Technical Operations): Previously VP of Operations at Constant Contact Scott Hilton (VP of Product): Previously VP at Sycamore Network and Lucent Technologies Paul Maihot (VP of Business Operations): Previously held various leadership roles at Autodesk
Need: Experienced CFO and senior-level executives with technological and operational expertise
Loretta Keane (CFO): Previously CFO of Healthrageous and Decision Resources Group Glenn Morin (Chief Product Officer): Previously CIO at Tunstall and Managing Director, Blue Cross
Blue Shield Rhode Island Larissa Lacman (Legal Counsel ): Previously Attorney at Sikorsky Aircraft and NCCI
Need: Highly experienced senior-level executives in various areas to augment its existing team
Bruce Brandes (EVP Growth & Strategy): Previously EVP Sales, AirStrip; Regional President, Eclipsys Kevin Weinstein (CMO): Previously VP of Marketing at ZirMed and Allscripts Eric Mollman (CFO): Previously CFO of Staywell Health and Focused Health Nathaniel Gunn, MD (Chief Medical Officer): Previously COO and Chief Medical Officer, Verisk Health Scott Cullen, MD (Executive Director of Consulting): Previously SVP of Kaufman Hall; practiced
medicine for 10+ years Dan Blake (CTO): Previously SVP of Platform & Technical Strategy at AirStrip
Need: A highly experienced CFO to help take the company public John Judd (CFO): Previously CFO of Compellent Technologies and Medtronic
North Bridge can assist in recruiting top management talent, if necessary
Augmenting the Senior Team
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Building a World Class Boards of Directors
North Bridge consistently attracts outstanding directors to its portfolio companies
Need: Technology CEO experience and financial expertise John Lynch: Former Governor of New Hampshire Michael Boustridge: CEO of Ciber (NYSE: CBR); Former CEO of BT Global Services; Former CMO of EDS Mark Fusco: Former CEO of AspenTech (Nasdaq: AZPN) Jim Baum: Former CEO of Netezza; Former CEO of Endeca
Need: Deep HCIT industry knowledge and extensive operating expertise in the healthcare payor market Brad Waugh: President and CEO of Tunstall; Former President and CEO of NaviNet; Former Board
Member Blue Cross of Rhode Island Chris Butler: Former COO and Board Member of Independence Blue Cross; Former Chairman of the
Board at NaviNet; Former VP of National Accounts at Blue Cross of New Jersey John Wider: Board of Directors of AARP Andrus Insurance Fund; Former President and CEO of AARP
Services; Former President of Magellan Behavioral Health; Former President CIGNA Healthcare
Need: Strong connections in the world of higher education and knowledge of the service offerings John Casteen: Recently retired President of University of Virginia Molly Corbett Broad: President of Association of College Presidents; Former President of
the University of North Carolina Brian Madocks: Former CEO of SunGard Education ($400m education software division of Sungard, one
of the Company’s competitors and potential acquirers); SVP&GM, SAP America
Need: Deep hospital and provider contacts, strategic insight and business development experience Chris Kryder M.D.: Founder D2Hawkeye, Generation Health; Former CEO Verisk Health; Active on the
faculty of Harvard Medical School, Division of Health, Science, and Technology Bob Sheehy: Former CEO UnitedHealthcare; Operating partner at Genstar Capital actively assisting a
variety of growing healthcare companies George Lynn: President & CEO AtlantiCare; Former Chairman of the Board of Trustees of the American
Hospital Association
Need: Marketing expertise, Japan market-penetration and public company experience Rainer Gawlick: CMO of Intralinks; Former VP of Worldwide Marketing for SolidWorks Doug Kohrs: President & CEO of Tornier N.V.; Former CEO of American Medical Systems Holdings; Board
Member ev3 and Kyphon
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Prepare and Position for Desired Exit
North Bridge has extensive experience preparing companies for optimal exits
IPO M&A
• North Bridge and its partners have helped 50+ companies go public as investors and operators, creating billions of dollars of liquidity for founders and management teams
• We understand that building a public company demands that best practices be in place years before a public offering is executed, and we can help implement those systems and practices
• Two recent, very successful IPOs (Proto Labs and Demandware) with others in registration
• North Bridge and its partners have helped shareholders realize value at 100+ companies through strategic sales and will provide guidance through that process, should it arise
Great companies are bought, not sold
North Bridge maintains constant dialogues with strategics across the industry landscape
Strong relationships with best of breed investment banking firms
Representative IPO Experience: Representative M&A Activity:
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Case Study: Recruiting Top Talent
Corporate Overview
Headquarters Madison, Connecticut
Founded 2007
CEO Sean Rotermund
North Bridge Partnership
$41M investment in February 2014
Business Overview
• Cloud-based solution for healthcare communications delivery
• Best in class technology platform that delivers a unified view of communications delivery across various health plan constituents
• Rapidly growing, highly profitable and capital efficient business
North Bridge helped Clarity recruit two outstanding Directors and expand the senior management team, accelerating growth and solidifying the Company’s market leading position
North Bridge Approach
• Together with management, identified specific needs for board level guidance: 1. Seasoned healthcare IT CEO
2. Go-to-market insight, including experience recruiting and compensating sales talent
3. Product prioritization, including a deep understanding of health plan customers and their changing competitive landscape
• Whiteboard sessions to identify key hires and improve organizational structure for continued growth
Results
• Attracted three outstanding board members to provide specific functional and industry expertise
• Helped to identify and hire key senior level talent in technology, sales and finance
• Helped drive revenue CAGR >50% with improved operating profitability
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Corporate Overview
Headquarters Cedar Rapids, Iowa
Founded 1991
CEO/Founder Al Ruffalo
North Bridge Partnership
$55M investment in July 2009
Business Overview
• Technology-enabled BPO company focused on providing fundraising and enrollment management services to institutions of higher education
• Highly recurring revenue model
• Loyal, sticky customer base
North Bridge helped RuffaloCODY strengthen the sales function and reorient product mix – organically and through acquisitions - to accelerate growth and improve profitability
North Bridge Approach
• Empowered management team to focus on long term value creation:
– Build sales capabilities to take advantage of the market
– Reinvest profits, don’t manage for near term profitability
– Introduce new product offerings to leverage strong relationships with existing customers
• Helped develop a focused acquisition strategy and evaluate selective opportunities
• Built a seasoned board of senior higher education industry operators
• Leverage North Bridge Network to make key introductions for partnerships, M&A dialogues, and new customers
Results
• Accelerated revenue growth from 6% in 2009 to 20%+ in 2013 and expanded EBITDA margin from 17% to 21%
• Average revenue per Enrollment Management customer increased from $40k to over $100k
• Identified and executed three acquisitions; evaluated over a dozen additional opportunities
• RuffaloCody received an undisclosed investment from Summit Partners and North Bridge exited its investment in the Company in May 2013
Case Study: Improving Sales and Product Mix
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Corporate Overview
Headquarters Maple Plain, Minnesota
Founded 1999
CEO Brad Cleveland
North Bridge Partnership
$60M investment in August 2008
Business Overview
• Technology-enabled rapid manufacturing and prototyping
• Rapidly growing, profitable and capital efficient business
• Dominant brand in its market
North Bridge helped Proto Labs build the management team, recruit three outstanding Directors, and expand internationally, leading to the second most successful IPO of 2012
North Bridge Approach
• Recruited highly experienced CFO
• Attracted three outstanding board members
• Ensured company was “public ready”
• Served as a sounding board for the team throughout the entire IPO process
• Helped expand internationally
• Improved increased sales and direct marketing capabilities
• Helped assess various partnership opportunities
Results
• Drove profitability while consistently beating budget
• Proto Labs was the second-best performing IPO of 2012, trading on the NYSE under the ticker PRLB
• Currently trading at $76 / share, up from $16 / share and has a $2 billion market cap
Case Study: Preparing for IPO
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North Bridge Growth Equity Investments
Offers premium managed content and
infrastructure solutions for WordPress
Cloud-based software platform enabling a turn-
key member communications delivery
solution to the health insurance industry
Data collection and analytics platform to
manage value-based care solutions and patient
populations
Creates a digital nursing home utilizing point-of-
care technology in coordination with professional case
managers to improve outcomes
Offers the most complete enterprise
staffing software for large contract/temp and direct
hire firms
Point-of-care application that automates the
workflow of care teams in the areas of care
coordination, charge capture, and advanced
analytics
Fund I Fund II
Rapid manufacturing and prototyping services
Fundraising and enrollment management services and software for colleges and universities,
and high affinity nonprofit organizations
Leading e-commerce provider of equine
supplements and horse supplies across the
United States
The largest independent social and casual gaming platform globally, with
over 200 million monthly active users.
Digital direct marketing solutions that assists
Fortune 500 companies with online customer
acquisition.
Cloud-based unified communications services to education, SMB, and enterprise customers
End-to-end delivery services that enable Latin American consumers to
cost-effectively receive e-commerce purchases
from the US.
Leading Provider of Energy Trading & Risk
Management Solutions
Webinar and video platform that offers on-
demand software, managed services, and an
online distribution channel for business-to-
business marketers
On-demand contact automation and call
center solutions provider for high volume enterprise and
government customers
Internet Infrastructure as a Service (IaaS) leader,
powering Managed DNS and Email Delivery for
enterprise, small business and personal users
Content-driven digital marketing solutions,
including newsletters, social media and
behavioral analytics