Dallas-based software company FPX is preparing to accelerate its growth since being acquired by Palo Alto-based private equity firm HGGC.
The announcement of the completed deal was made Tuesday, but financial terms were not disclosed. Senior FPX management reinvested proceeds of the sale to receive a significant minority stake, according to a released statement.
“For a year and half, we have been looking at both venture capital and private equity companies to find the right source,” said Dave Batt, FPX CEO, adding that the company was looking for an investor that aligned with its growth strategy. “HGGC really stood out head and shoulders because they had done this with other software companies.”
FPX developed configure, price, quote software, referred to as CPQ, that helps manufacturers and professional services companies guide their salespeople in how to configure and price their various offerings. The company employs more than 100 people in Dallas; Mankato, Minn.; Bloomington, Minn.; and Palo Alto, Calif. Some of its top clients include Honeywell, Fujitsu Network Communications, Hitachi Data Systems, Genband, Airbus DS Communications, and Bell Helicopter.
After tripling its working capital, as a result of the acquisition, FPX is preparing for growth. The company is relocating its Uptown headquarters to the Plano/Frisco area, where it will double its 4,000-square-foot office. The specific location has not yet been disclosed, but it is expected to be the company’s largest office.
It also expects to surpass the $100 million mark in revenue, hire a chief financial officer and chief marketing officer at the headquarters, open new offices in key markets, bring on additional international partners, and seek acquisitions.
While the company has been only operating under the FPX brand for about seven years, the business’ origins date back to 1983, when it sported the name FirePond. FirePond was founded in Mankato, Minn.
“We were the inventor of CPQ,” Batt said about the segment that’s recently heated up.
FirePond went public with a market cap of more than $1 billion. Its headquarters were then relocated to Boston and served some of the largest heavy equipment customers including General Motors. But after the dot com bust, the company moved back to Minnesota and sought an investor to rescue it. Audrey Spangenberg, a former director at Dole, purchased the company and hired Batt, who formerly worked for companies including Siebel Systems, Oracle, Microsoft and Sage Group PLC.
Batt took FPX from a vendor that only worked on one platform, Salesforce, to one that worked across software houses SAP, Oracle, and Microsoft. He also added 15 different delivery and implementation partners to help the company scale. Under his leadership, the company has doubled its revenue, he said.
“We’re so excited about this news because it’s a major transition,” Batt said about the acquisition. “This gives us fuel in the tank to take us to the next level.”
HGGC is a middle-market PE firm with more than $2.4 billion in cumulative capital commitments. It is led by CEO Richard Lawson.