BirchStreet Systems Inc. has acquired G4 Technologies Corp. in Centennial, Colo., a deal that came on undisclosed terms and gives the Newport Beach-based specialist in hospitality industry services a way into the restaurant sector.
BirchStreet provides back-office ordering, payment, and budget and inventory control services to hospitality and other client properties, most of them hotels in the U.S.
Properties on its “procure-to-pay” system subscribe to BirchStreet’s software-as-a-service platform and then search, order, track and pay for products from suppliers online.
BirchStreet has about 12,000 properties, 115,000 registered users and 350,000 suppliers.
Local clients include Balboa Bay Club in Newport Beach, among others.
An annual subscription to BirchStreet’s SaaS platform is $5,000 to $10,000 per property, and a single hotel could pay as little as $1,500 to sign up.
“I don’t believe in a lot of upfront fees that get in the way of making sales,” said Sushil Garg, chairman and chief executive of BirchStreet Systems.
G4 Technologies’ main product is a beverage inventory system for restaurants and bars called AccuBar, used by about 1,200 restaurants, bars and country clubs.
Clients include the Irvine-based Yard House restaurant chain, owned by Darden Restaurants Inc. in Orlando.
AccuBar has charged $4,000 to $10,000 for setup and about $1,500 a year for the service.
Garg said AccuBar’s upfront charges will come down, in line with BirchStreet’s approach.
“We want the ongoing fee (more), we’ll get back to that upfront number eventually, (and) we’re motivated to keep the customer happy for a longer time.”
New Industries
BirchStreet has focused on the hotel industry for most of its 14 years, but recent acquisitions and hires have expanded that reach.
It bought Brilliant Aquarius Technologies in Singapore two years ago to add sales and training support for clients in China, Hong Kong, Singapore and Japan.
Vice President of Sales and Marketing Bill Hirsch came on board in 2012 and has focused on golf facility and convention center clients.
A deal at about the same time with Laureate International Universities in Baltimore added 70 private colleges, most in Europe and South America, to its client roster.
BirchStreet in July hired a chief operating officer, Steve Markle, to integrate and continue its growth. Markle is a veteran software executive “plugged into the supply chain,” Garg said.
The G4 acquisition gives BirchStreet greater access to restaurant chains and ownership groups, and enhances its technology—the two main reasons for the buy.
“This technology is faster and more efficient than most of what’s out there,” he said.
Beer App
The enhancement offered by AccuBar is a finger-swipe, app-based approach that helps a restaurant or bar know what it has in partial bottles of wine and spirits.
The old-school approach is to eyeball a bottle and guess, Garg said.
“You need to know what to order, so you look at the bottle and say, ‘well there’s about five-eighths—or is that three-fourths?—left.’”
AccuBar provides an on-screen visual of the bottle for various beverages and users adjust the level on the bottle until it matches the real one.
AccuBar software connects with smartphone and tablet apps for the Apple and Android operating systems, as well as three websites for clients to store individualized, property-specific beer, wine and spirits lists.
The lists are the basis of a second product—an option for the restaurant to have digital menus.
“Wine prices and vintages are changing all the time and this keeps the menu up-to-date,” Garg said.
AccuBar’s software integration with BirchStreet’s overall platform is expected to be complete in November.
Relocations
G4’s co-founding brothers, President Dan Grimm and Chief Technology Officer Dean Grimm, will relocate from Centennial, which is outside of Denver, to BirchStreet’s offices on Dove Street near John Wayne Airport.
The “brothers Grimm” will lead operations and technology at BirchStreet’s new restaurants and country clubs division, Garg said. G4’s 20 employees will maintain the Colorado location as a new office for BirchStreet, which also has locations in China, Singapore and India.
BirchStreet now has about 280 employees, with about 65 in Newport Beach—more than double its total from two years ago.
Owners
Garg, a serial entrepreneur focused on software, bought the rights to the purchasing technology and started BirchStreet in 2002.
He brought in a financial backer in 2007. John Chiles, a former investment banker at Jefferies & Co. in San Francisco who is vice-chairman and owns the second largest stake in the company.
Garg and family members own the largest stake, with more than 50% of BirchStreet. Employees own most of the rest.
It had private equity backing for a two-year period that started in 2009, when PlumTree Partners LLC in Dallas bought a small stake and brought in a new chief executive, John Davis.
Davis left two years later for Room Key—an ill-fated industry attempt by six large hotel chains to dethrone online travel agencies that include Expedia and Booking.com—and BirchStreet and Chiles bought out PlumTree. n
— Michael de los Reyes contribute to this article.
