Golden Gate Capital Acquires Ex Libris Group
Paula J. Hane
Posted On November 19, 2012
Library automation vendor, Ex Libris Group, announced that Golden Gate Capital, a prominent San Francisco-based private equity firm with $12 billion in capital under management, entered into an agreement to acquire Ex Libris from its current owner, Leeds Equity Partners. Terms of the sale were not disclosed. Ex Libris will remain an independent business based in Jerusalem, run by the current management team. The deal is expected to be completed in December 2012 (undoubtedly mindful of that “fiscal cliff,’ which could bring a substantial increase in capital gains tax rates).
Ex Libris has had a history of equity investors since its founding in 1986. As industry consultant Marshall Breeding points out in a review of the corporate history, “[T]he academic library automation sector saw a major transformation when Francisco Partners, a San Francisco-based private equity firm acquired Ex Libris Group in June 2006 for $62 million. In a subsequent transaction in November 2006 Ex Libris, with support from Francisco Partners, also acquired Endeavor Information Systems from Elsevier.” Francisco Partners only held the investment for a little more than 2 years before selling to Leeds Equity Partners in 2008.
In the 4-plus years of Leeds ownership, Ex Libris has accomplished a lot and invested a great deal of financial resources and talented staff in the development of Alma, its totally new “unified resource management” system. Now, Ex Libris should welcome the deeper pockets of Golden Gate Capital, a much larger company, to continue its developments to help libraries and enhance the company’s bottom line.
“Ex Libris is proud to join Golden Gate Capital, whose software portfolio represents, on a consolidated basis, the sixth largest software company globally,” commented Matti Shem Tov, Ex Libris Group president and CEO. “Golden Gate Capital’s positive assessment of Ex Libris reaffirms our customers’ and management’s confidence in the strength of the Company, its products, and its future strategy. Golden Gate Capital’s deep technology experience and financial resources will support our continued growth as we carry on developing our software and data services and extending our geographic reach.”
Jake Mizrahi, a managing director of Golden Gate Capital, commended Ex Libris in the press statement. “The Company has successfully carried out an impressive transition to cloud-computing technology and to a new business model while continuing to sell and support local and hybrid installations of its solutions. We look forward to working with the strong leadership team at Ex Libris to extend the Company’s offerings and facilitate its future growth.”
In an email, industry expert Carl Grant noted, “[Golden Gate Capital] is a massive firm. They’ve already had a bit of exposure to this market through Infor, which has a group/division that has long sold products into the [European public-library] market as well. They’re into all types of markets and offerings so they will also bring a diversity of views that librarianship and those that serve librarianship can benefit from in the long term. They bring incredible resources to the table and appear, at least at this point, to have parity in their vision of what is possible in the future for Ex Libris.”
While the company reports that customers shouldn’t expect any changes, Grant speculates that “it’s only a matter of how much and how fast.” The management team will have a major new advisor at the table. But Grant adds the encouraging note that during past transfers of ownership, Ex Libris management “has largely retained control over most of the decision making that shapes the company and products.”
One consideration is what will happen under the new ownership to the range of products offered by Ex Libris, especially with its multiple library systems. As Grant points out, “With Alma now at customer sites, it means they’re supporting three library systems (Aleph, Voyager, and Alma), a discovery interface (Primo), link resolver (SFX), recommender (bX), ERM (Verde), preservation system (Rosetta), digital content management system (DigiTool), and a metasearch tool (MetaLib). By any measure that’s a lot of products and a lot of overlap. Realistically, one has to ask how long this is reasonably sustainable for the company (and thus the customers).”
Ex Libris has a customer base consisting of more than 5,000 sites in more than 80 countries on six continents. Breeding notes that over its 20-year history, “Ex Libris has risen to become one of the largest, if not the largest, companies in the library automation industry, depending on whether measuring revenues, libraries served, or personnel employed. The company has maintained its focus on academic and research libraries, both individually and in consortia. Many of the consortia using Ex Libris products include public or special libraries in addition to academics. Ex Libris products find use in many national libraries, including the Library of Congress, the British Library, the National Library of China, The National Diet Library of Japan, and many others.”
Breeding also points out that Ex Libris has maintained an emphasis on R&D. “The 170 personnel Ex Libris allocates to development almost doubles any competitor.” This R&D focus, plus the company’s close collaboration with customers, and the potential benefits deriving from its new equity owner, seem to point to a solid future for Ex Libris.
Note: Carl Grant served twice as the president of Ex Libris North America with his most recent engagement ending Dec. 31, 2011. He is still a minority shareholder in the company and since leaving the company they’ve occasionally hired him in his capacity as a consultant at CARE Affiliates LLC.