by Tom Brown June 11, 2013 vtdigger.org The sale of a controlling interest in MyWebGrocer to a California private equity firm is all about growth, MyWebGrocer CEO Rich Tarrant said Tuesday.
Brian Tarrant City Manager Decarreau Governor Shumlin Mayor O'Brien Rich and Jerry Tarrant announcing the purchase of the Champlain Mill in Winooski in June 2011. VBM photo
HGGC, formerly known as Huntsman Gay Global Capital, announced the acquisition in a news release Tuesday. Terms of the deal were not disclosed, but The New York Times, in its DealBook section, estimated the deal at being in the higher end of a $25 million to $100 million price range. No changes in management are planned, Tarrant said, and the company’s work force will remain in Winooski.
Tarrant said MyWebGrocer, which offers Internet marketing services to national grocery chains and employs 180 people at its Champlain Mill headquarters, is looking to expand overseas and that HGGC is well-positioned in Great Britain and in European Union nations.
‘They have a significant presence and understanding of the U.K. and EU marketplace,’Tarrant said in an email.
Tarrant said the company, which has expressed concerns in the past about finding qualified Vermont workers, already has more than 20 open positions.
‘There is no other option but to grow,’Tarrant said. ‘We will try our best to find the talent in Vermont or train the talent that we do find. If we cannot find it locally, then we will import it to Vermont or find talent elsewhere by opening additional offices.’
The Stripes Group, which had been the Vermont company’s main investor, sold its stake in MyWebGrocer as a part of the transaction.
MyWebGrocer’s customers include more than 140 grocery brands, including Kroger, Shoprite and Albertsons, and more than 200 consumer packaged goods brands, according HGGC’s news release. The company saw 2012 revenues increase nearly 60 percent over the previous year, the release said.
‘We have always worked with investors who bring more than capital ‘people who are true partners that value what we have built and want to work alongside us to accelerate our growth and realize the tremendous potential of MyWebGrocer,’Tarrant said earlier in a prepared statement. ‘HGGC’s unique insights, proven track record with technology-enabled services businesses, and experience with founder-owned businesses make them the clear choice.’
MyWebGrocer provides a software platform that allows consumers to plan grocery visits online, including making shopping lists, downloading coupons and viewing digital circulars that outline promotional items, the news release said. MyWebGrocer’s software also allows grocery stores to fully support online transactions for in-store pick-up or home delivery.
The New York Times report said the deal was aimed at giving HGGC a digital weapon to compete against online grocery giant Amazon.
As both buying habits and advertising continue to move online, MyWebGrocer is well-positioned to gain share from both the $1 trillion grocery retail industry and the more than $4 billion that CPG companies spend on online advertising each year, the news release stated.
‘Changing consumer behavior is pressuring grocers and CPGs to adopt digital solutions, and MyWebGrocer is the clear vertical market leader,’Hudson Smith, principal at HGGC, said in the release. ‘With new eCommerce-focused entrants seeking to take share from traditional grocers, we believe that grocers will increasingly look to MyWebGrocer to provide the technology platform that enables consumers to plan and shop online, as well as enhance the in-store experience with mobile and social offerings.’
‘This investment is further proof of HGGC’s unique ability to partner with strong management teams and founders who want to continue to invest in and grow their businesses, as well as our expertise in technology-enabled services businesses’Rich Lawson, co-founder and managing partner at HGGC, said in a statement. ‘We look forward to supporting Rich Tarrant, his brothers, Jerry and Brian who co-founded the business, and the MyWebGrocer management team to continue to build upon the foundation of success.’
The Jordan Edmiston Group served as financial advisor to MyWebGrocer and its minority investor, the Stripes Group, who sold its stake in MyWebGrocer as a part of this transaction. The Stripes Group is a growth equity firm that makes investments in Internet, SaaS, Healthcare IT and branded consumer products businesses.
About MyWebGrocer:
MyWebGrocer drives digital connections between consumers, grocery retailers, and Consumer Packaged Goods brands, offering a breadth of shopper marketing services supported by a comprehensive technology platform. MyWebGrocer manages digital solutions for more than 140 retailers nationally, representing more than 10,000 stores, and 200+ major Consumer Packaged Goods brands, including McCormick, Kellogg, Unilever, Nestle and P&G. For more information on MyWebGrocer, please visit www.mywebgrocer.com.
About HGGC:
Based in Palo Alto, California, HGGC is a leading private equity firm focusing on leveraged buyout, recapitalizations and growth equity transactions in the middle market. The firm seeks to partner with strong management teams and founders to build companies capable of generating sustainable growth. With years of collective deal and operational experience, HGGC brings best practices from private equity and global corporations to help middle market businesses in a wide range of industries outperform the market. The firm is currently investing out of a $1.1B Fund. For more information, please visit www.hggc.com.
About Stripes Group:
Stripes Group is a leading growth equity firm that makes minority and majority equity investments in B2B/B2C Internet, SaaS, Software, Healthcare IT, and Branded Consumer Products businesses. The firm generally partners with founder driven, profitable, market-leading companies with proven business models that are generating exceptional revenue growth. For more information on Stripes Group, please visit www.stripesgroup.com.
Winooski, VT ‘June 10, 2013 ‘MyWebGrocer, Inc