Solis Capital Partners LLC has acquired a substantial stake in gen-E, a software company in San Clemente whose top management and recent track record caught the attention of the Newport Beach-based private equity firm.
“We like that [gen-E Chief Executive Casey Kindiger] has built a service business that was highly successful and growing—all the things that investors like,” said Craig Dupper, a partner at Solis Capital. “We are very focused on the capability of leadership, even before looking at the industry.”
The deal on undisclosed terms marks the initial acquisition for the second fund of Solis Capital, which has $42.5 million in commitments. Solis II has a $100 million funding target, with the balance of funding expected this year.
Solis Capital typically invests in companies with annual revenue of $15 million to $150 million. Gen-E marked a 40% revenue rise to $25 million in 2011 and expects additional gains this year.
Gen-E was founded in 1999 as a services provider and recently shifted to a software sales and development. It makes and sells process-automation software for companies with annual revenue of about $200 million, Kindiger said.
“Our software helps them maintain and automate the ongoing operations of all those networks and computer systems,” he said.
The company has customers in utilities, entertainment, retail and manufacturing.
“Telecommunication and financial services have been the biggest clients,” Kindiger said. “They tend to have more complicated networks. The harder the problem of managing their networks, the more likely they would choose us.”
Gen-E was known as generation-E Technologies LLC until a recent rebranding.
The company has gone through changes in the past few years, including its relocation from Chicago and the introduction of its process-automation software.
“We really took off in the last five years,” Kindiger said. “Our product has really fueled our turnaround and the growth in the last few years.”
The company boosted its work force by 66% last year to more than 100 employees.
There are about 60 employees in its San Clemente office, where space grew to about 7,000 square feet last year.
The company also has offices in Texas, Illinois, Ireland and Canada.
“There’s definitely been acceleration in [its] base business,” Dupper said. “The last couple of years, with the addition of the proprietary software, have really made a difference.”
Kindiger said he expects the new partnership with Solis Capital to yield fresh research and development opportunities.
“It’s the right time to expand,” he said.
