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FrontRange Solutions to be Acquired by Francisco Partners for Approximately $200 Million

    Online News published in DMReview.com
November 7, 2005

FrontRange Solutions Inc., a global leader in service management, CRM and voice application solutions for the small-to-medium-enterprise (SME) and distributed enterprise markets, announced today that Francisco Partners, one of the world's largest technology-focused private equity funds, has agreed to acquire all of its outstanding shares in a transaction valued at approximately $200 million.

According to FrontRange CEO Michael McCloskey: "FrontRange Solutions has out-performed the industry for the last two years, growing at a rate that far exceeds our competition. During this period, we have invested heavily in both R&D and sales expansion, while continuing to increase our profitability. With several new products coming to market, we are well-positioned for continued growth and plan to increase our market share."

McCloskey continued, "The acquisition by Francisco Partners reflects the tremendous progress we have made during the past 24 months in reshaping FrontRange into a leading provider of service management, CRM and voice applications. This further ratifies our strategy of providing valued solutions to our customers, and is the next step in building a global market leader."

Neil Garfinkel, a managing director of Francisco Partners, added, "We are pleased to become an investor in FrontRange and look forward to working with Michael and the rest of the management team in the coming years. FrontRange has a strong market position, great product franchises that are being improved by advanced technology, over 140,000 customers, and a global partner channel that provides broad market coverage. We believe the company is poised to deliver significant growth over the next several years."

"This investment by such a respected firm is good for FrontRange and its employees, customers and partners," said Sheryl Kingstone, senior CRM analyst with The Yankee Group. "FrontRange has performed well in the last two years and in conjunction with Francisco Partners we would expect them to pursue an aggressive growth strategy. Customers and prospects should expect the following: market expansion, innovation and potential acquisitions."

Gary Greenfield, an operating partner of Francisco Partners and former CEO of Peregrine Systems continued: "I have been very impressed with FrontRange's new family of solutions - in particular, the newly released ITSM product family provides the company with a product that is the most advanced on the market today. This new family of products should allow FrontRange to extend its leadership in its current markets and gain share in the distributed enterprise market."

John Ragsdale, analyst of Forrester Research added: "The most significant vendor events in the service desk and CRM arena in 2005/6 may not be from the enterprise-level players, but from the mid-market. The release of FrontRange enterprise editions of HEAT and GoldMine, on a .NET platform, includes surprisingly complex functionality all for a single price. With this much capability available for half the list price of enterprise vendors or less, expect the overall deal size of service desk software to go down."

Summarizing, McCloskey said: "This investment by Francisco Partners will enable FrontRange Solutions to continue to pursue our aggressive growth strategy. We are committed to providing our Customers and partners with market leading products and superior service and support. This investment further strengthens that commitment."

The transaction is expected to close in approximately 90 days and is subject to approval by FrontRange shareholders and customary closing conditions.


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