Despite a weakening economy that could reduce demand for business software, Triton Pacific Capital Partners this month acquired a majority interest in AssetPoint LLC, a leading provider of maintenance and asset management software.
AssetPoint’s enterprise applications are used in planning for repairs and maintenance in manufacturing plants and in oil and gas drilling and mining operations and even on monuments, such as the Golden Gate Bridge.
Triton purchased an 80 percent stake in the Greenville, S.C.-based AssetPoint for undisclosed terms. The company is one of four software firms in Triton’s portfolio, whose investments total $150 million in 14 companies.
The cash infusion will fund growth initiatives at AssetPoint, said Fred Thiel, managing partner at Triton, a private equity group based in Century City.
“We are ideally looking to triple revenues over the next four to five years,” Thiel said.
That’s an ambitious goal for a software firm in a slowing economy. Sales of enterprise software can fall precipitously during a recession because corporate expenditures on information technology are discretionary to a considerable extent.
In fact, AssetPoint’s main competitors, Oracle Corp. and SAP AG, lost as much as 80 percent of their value between 2000 and 2002, depending on when an investor bought the stock, according to Michael Cusumano, a software industry expert and professor at the Massachusetts Institute of Technology.
“When times are bad, revenues can collapse like a stone falling to earth because customers can simply stop buying products,” Cusumano noted in a recent study.
But Triton executives expect strong revenue growth from AssetPoint’s model of delivering software as a Web-based service, which can be easily purchased for less money than traditional software sold through expensive licensing fees.
Currently the company’s revenues are evenly split between licenses and service fees. Thiel foresees the Web service platform growing to 75 percent of annual revenue over the next two to three years.
Growing Growthink
Los Angeles business advisory firm Growthink this month announced new relationships with five emerging companies.
Growthink specializes in providing capital and advisory services to startups and middle market enterprises.
Highlighting the list of new clients is Brand Velocity, a technology consulting firm that works closely with enterprise software giant SAP AG. Growthink will work with the company to develop a business plan.
“The relationships with many of our clients initially focus on strategic planning to craft their business models and determine the use of proceeds when they go out and get capital,” said Jay Turo, chief executive of Growthink.
Another new client, Rogue Entertainment, is seeking to raise capital to expand its operations. The company owns hotels in Lake Tahoe and Big Bear that cater to snowboarders, and it also produces a reality show that tracks life among the staff. New hotels are on the drawing board.
“Many of our clients have an ambition to grow toward a strategic or financial sale of the business, and we want to turbo-charge that growth,” Turo said. “If the clients have businesses that are within the appetite of our investment network, we can act for them in an investment capacity as a broker dealer.”
Growthink has growth plans of its own. The company has added 10 employees this year, boosting its staff to 50 team members, and plans to continue its hiring program. The company in January relocated from Venice to a larger 8,000 square-foot office in Los Angeles.
In September, Growthink teamed up with DCIP, a developer of theater-scale digital cinema technology, to provide investment advice for growth capital and to assist the company with market research.
Growthink was also recently named adviser of record for Jiangxi Copper Co., an emerging Chinese firm located in Yingtan City. Growthink will develop and launch Jiangxi’s strategic planning, resource management and capital acquisition initiatives.
Declining Optimism
As the outlook on the economy grows increasingly gloomy, spirits are sinking among small business owners, according to a recent survey.
The Wells Fargo/Gallup Small Business Index Survey revealed a decline in optimism among micro-entrepreneurs.
The survey index score, which measures the confidence of small entrepreneurs, fell 16 points from the previous survey last fall.
The most recent score of 83 was the second-lowest score since the survey’s inception in August 2003, when the score was 69.
“Small business optimism is eroding along with the economic and financial outlook,” said Dr. Scott Anderson, Wells Fargo senior economist.
Branching out
Hanmi Bank last week opened its 25th branch but its first outside of the Korean-American community.
The 5,000-square-foot branch, on the southwest corner of Wilshire Boulevard and Rexford Drive, is in Beverly Hills. It will offer customers the full range of products and services.
Based in Koreatown, Hanmi has assets of about $4 billion and is the fifth largest bank headquartered in Los Angeles County.
Staff reporter Mitch Deacon can be reached at
[email protected]
or at (323) 549-5225, ext. 225.
