Long-term Thinking: Black Box Intelligence Acquired by Diversis Capital
Sometimes the highest cash offer isn’t the best deal. Other factors like team, equity, and the long-term survival of a company play a part in our decision making as well.
THE COMPANY
Black Box Intelligence (BBI) is the leading data and insights provider of workforce, guest, consumer, and financial performance benchmarks for the restaurant industry.
THE GOAL
After more than 20 years of building and growing a vibrant technology company, co-founders Joni Thomas and Wallace Blair Doolin decided it was time to retire. However, they were adamant that they leave their management team, their employees, and their customers in good hands. They wanted a buyer who viewed success through the lens of people as well as profits.
OUR APPROACH
We positioned BBI as a technology benchmarking company, focusing on their software, the strength of their team, and their vision for the future.
The first time in market, we generated a lot of interest from private equity investors, but the company decided to do a smaller debt deal instead. A year later, we returned to the market and began generating strong interest again, until the COVID-19 pandemic hit and spooked anyone looking at the restaurant industry.
The third time to market was the charm. Because the business had performed well in spite of the pandemic, there was strong interest from private equity and strategic buyers. We received multiple bids, several of which were all cash and highly attractive from a valuation perspective. All but one buyer contemplated folding BBI into an existing platform, which created a great deal of uncertainty for the management team and the employees. The one outlier was Diversis Capital, who saw the potential of BBI as its own platform upon which additional investments could be made. They believed in the management team and their vision, and they were excited to provide the growth capital the business needed to accelerate its growth and win in the marketplace. It was exactly the deal the Doolins were seeking.
THE OUTCOME
In the end, we worked together for 2.5 years, brought the deal to market three times, and ultimately secured a very attractive outcome for the business. Despite market uncertainty, we closed the deal in the first week of 2021, provided the founders with cash up front, additional upside from meeting projections, and a second bite at the apple in terms of rollover equity. The deal with Diversis Capital was the best overall deal and met all of the Doolins’ criteria for success.
