PKWARE, Inc., based in Milwaukee, WI, develops and markets data file security and compression software for major hardware platforms and operating systems. With Grace Matthews’ assistance, PKWARE was acquired from the estate of the founder in 2001 by management and a new, growth-oriented investment group. Grace Matthews assisted the company again in 2002 when it acquired Ascent Solutions, Inc., a company that sold compression software into the mainframe market through a licensing agreement that gave it access to PKWARE’s technology and brand name.
Having expanded PKWARE’s revenues and profitability ten-fold in less than a decade, PKWARE’s shareholders wanted to sell the company in the 2008, but the financial markets were in crisis and the credit markets were effectively frozen, with many potential buyers waiting for the markets to stabilize before considering taking on the risk of acquisitions.
Grace Matthews recognized that the combination of PKWARE's talented management team, strong cash flows, and history of growth represented a powerful story that many potential buyers would find irresistible, even in the midst of a severe economic downturn.
Grace Matthews negotiated a letter of intent with the majority shareholders, and approached a number of potential private equity partners and other financing sources with a proposal for participating in the transaction. Though several parties were interested, two in particular especially appreciated PKWARE’s potential for rapid future growth. After completing due diligence, these groups, Novacap Technologies and Maranon Capital, joined Garrett Investments, a Grace Matthews controlled entity, to form a buying group that acquired the stock of PKWARE. Maranon Capital also provided $34 million in senior and subordinated debt to support the transaction.
With a solid management team and the support of a new shareholder group, the company is poised to take advantage of evolving opportunities in the fast-growing data security market, a market in which the Company’s innovative products are particularly well-positioned.