Creating Value Through Strong Growth – Organic and Inorganic

Company Overview
Founded in 1999, KANA Software, Inc. (“KANA”) engages in the development, marketing and support of customer communications software products. KANA’s solutions help companies communicate with their customers across every channel, including email, chat, call-centers and web self-service. KANA’s solutions have reduced handling time, increased resolution rates and improved net promoter scores (NPS) at more than 900 enterprises—including many of the Fortune 500 and more than 250 government agencies.

Transaction Overview
KANA was a business that Accel-KKR had tracked for a number of years and with whom we met periodically. The company went public in 1999 and saw its value peak in January 2000, before experiencing a prolonged decline resulting from poor execution and the after-effects of two economic downturns. In 2009, as a result of its depressed stock price and activist investor effort, KANA decided to evaluate strategic alternatives.

Despite KANA’s continued contraction, the company’s strong product set and customer base of over 220 clients (including half the Fortune 50), along with the potential to augment the existing management team, made for a compelling investment opportunity. Accel-KKR took KANA private in December 2009.

Value Creation
Over the course of four years, Accel-KKR and the Management team made significant investments in developing and rolling out a new product set as well as increasing sales and marketing efforts. This significantly broadened the company’s products and geographic reach. In addition, Accel-KKR assisted KANA in the completion four significant acquisitions:

  • Acquired Lagan in 2010, a UK-based customer service solution for state and local governments that diversified KANA’s customer base and bolstered the company’s international presence
  • Acquired Overtone in 2011, a multi-channel social media monitoring and customer listening platform to enhance KANA’s reporting and analytics capabilities for customer feedback
  • Acquired Trinicom in 2012, a Benelux-based market leader and provider of end-to-end, easy-to-use customer service applications for mid-sized businesses, bringing KANA to the midmarket and to the cloud globally
  • Acquired Ciboodle in 2012, a former subsidiary of Sword Group and provider of enterprise-class dynamic case management and contact center agent desktop solutions

The combination of both the organic and inorganic efforts led to meaningfully improved operating performance – the return of KANA to significant growth and profitability.

Through the combination of four transformative acquisitions and investment to drive strong organic growth in revenues and profitability, Accel-KKR and the KANA management team built a truly global organization focused on customer service experiences through every channel and across all verticals. Accel-KKR ultimately completed the sale of KANA to Verint Systems on February 3, 2014 for $514 million in cash.

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.