Investor Interest in New Jersey Technology Startups Punctuated By Increase in Mergers and Acquisitions of EDA-Supported Companies
TRENTON (March 10, 2016) – Underscoring the lasting impact that companies supported by the New Jersey Economic Development Authority (EDA) have in the global marketplace, @NJEDATech today highlights several recent mergers and acquisitions around the Garden State involving its portfolio companies.
“New Jersey entrepreneurs are building incredible technology companies and we are pleased to support their efforts,” EDA Chief Executive Officer Melissa Orsen said. “Industry leaders are taking notice of these startups, resulting in strategic mergers and acquisitions.”
Mergers and acquisitions are beneficial to startup companies on many different fronts, including helping businesses expand their reach within the global marketplace.
“These transactions lead to an increase in staff, who often bring specific industry knowledge to a company,” EDA Technology and Life Sciences Division Director Kathleen Coviello said. “Mergers and acquisitions can also boost a company’s value by providing access to funds and assets to accelerate development and customer acquisition. It can also provide gains on investments to investors, putting more cash back into the technology ecosystem for more investment.”
Data Center Service Management (DCSM) provider Nlyte, recently acquired Edison-based FieldView Solutions, the leading real-time event correlation, alarming and analytics provider to the data center industry. FieldView Solutions became the first company to receive financing through New Jersey’s Edison Innovation Green Growth Fund when it received a $1 million growth capital loan from the EDA in 2012. In being acquired by NIyte Software, Fieldview Solutions expects to “bring these robust capabilities to the growing DCSM market,” FieldView Solutions CEO Fred Dirla said.
Cloud Software Company IntegriChain, which has an office in Princeton, announced last week that Accel-KKR will acquire 100 percent of the equity not held by members of IntegriChain’s management team. Used by nine out of the top 10 pharmaceutical manufacturers, IntegriChain’s software helps life sciences manufacturers manage their supply chain relationships, inventories, and orders across a vast network of retailers, ecommerce, and distributors. IntegriChain previously benefitted from a $1 million loan through the Edison Innovation Fund, which it used for a variety of purposes, including expanding sales and marketing capacity, and building up customer service and data operations.
Another way New Jersey supports the growth of the state’s technology industry is through limited partner investments in venture funds that invest in New Jersey-based companies. To date, the EDA has approved investments in 12 venture capital funds totaling more than $40 million; these funds have leveraged the EDA’s investment in New Jersey businesses by more than 62 times. Five of these investments were through Princeton-based Edison Partners (formerly Edison Ventures) funds – Edison III, IV, VI, VII and VIII. Through these funds, Edison Partners has invested $130 million in 25 New Jersey-based technology companies.
The EDA invested in Premier Healthcare Exchange (PHX) through Edison VII in 2010. Headquartered in Bedminster, the company is a leading provider of healthcare management and electronic payment solutions. PHX and its subsidiary, Pay-Plus Solutions (PPS), announced plans to merge with Stratose and GlobalCare to create the next-generation leader in healthcare claims cost containment and value management. The exit generated more than 10 times in returns for investors.
Fairfield-based Archive Systems, Inc., a document management company, recently announced that it is being acquired by Access®. Archive Systems offers both records center storage for hard copy files and digital services, including web-based image storage and retrieval and document process automation technologies. The EDA invested in Archive Systems, Inc. through its limited partnership in Edison VI. NJTC Venture Fund, another venture fund in which the EDA made a limited partnership investment, is also an investor in Archive Systems. The company also previously benefitted from a $1-million Edison Innovation Fund loan, which helped it retain and create jobs in the Garden State. In 2007, Archive Systems became the first business in the state to take advantage of EDA’s investment approach of converting debt to preferred stock, making the EDA a direct shareholder in the company.
Coviello noted that New Jersey has all the right ingredients for entrepreneurs to find success building their companies in the Garden State – an ideal location, a broad talent base, and an active established technology community.