Consolidating a Vertical Market

Company Overview
Founded in 1999, iTradeNetwork (“ITN”) is the leading provider of on-demand supply chain management and business intelligence solutions to the retail grocery, foodservice and hospitality industries. At the time of Accel-KKR’s investment, the company had a collaborative network in the food industry offering connectivity to over 4,500 suppliers/manufacturers, distributors, retailers and foodservice operators. During Accel-KKR’s ownership, the company more than tripled revenue and expanded its network to over 6,000 food industry trading partners.

Transaction Overview
Accel-KKR developed a relationship with ITN through Savista (a previous Accel-KKR investment) and initially made a minority investment in ITN in 2006. At the time, ITN was owned by a consortium of foodservice industry participants and management. Over the next two years, Accel-KKR developed a strong relationship with the management team, and in 2007, completed a recapitalization of the company. The transaction provided liquidity to existing investors and materially revamped company ownership by adding a proven value-added partner and removing conflicted non-independent industry participants.

Value Creation
Accel-KKR and the management team believed there was an opportunity to consolidate the industry and build a market leader. Over the next the next three years, the team executed on this vision including:

  • Executing two significant acquisitions which solidified ITN position as the de facto provider of procurement solutions to the food industry
  • Building a pipeline of over 100 additional M&A opportunities
  • Broadening ITN’s product portfolio from one primary solution (order management) to three additional platforms (contract management, supply chain analytics and branded procurement)
  • Optimizing the company’s capital structure
  • Securing long-term commitments from ITN’s key customers

As a result of these initiatives, ITN grew revenue at a CAGR of over 40% during Accel-KKR’s investment while maintaining over 50% EBITDA margins. The company consolidated the food vertical in the procurement industry and emerged as the market leader. ITN was acquired by Roper Industries in August 2010 for $525 million.

This and other featured case studies represent a subset of Accel-KKR’s portfolio companies.  These case studies are selected as examples of software and technology enabled services companies, often founder owned, that desired a partner with a growth orientation (both organic and inorganic) and capital base to execute on targeted value creation opportunities.  The results attributable to these companies may not be indicative of results of all portfolio companies with which Accel-KKR has arrangements.  There can be no assurance that comparable results will be achieved in other and future investments.