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Caution, long-winded blog-post!
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This blog-post is not about Textura, per se, but about “PlanSwift”, a
company most reprographers are familiar with and one that was acquired by
Textura in early 2013. This blog-post
shares with our blog-visitors information about PlanSwift’s business and, in
particular, reveals how much Textura paid for PlanSwift.
company most reprographers are familiar with and one that was acquired by
Textura in early 2013. This blog-post
shares with our blog-visitors information about PlanSwift’s business and, in
particular, reveals how much Textura paid for PlanSwift.
On February 14th, 2013, I posted a
note on the Repro 101 Blog entitled, “Textura Acquires PlanSwift”. If you wish to read that previous blog-post,
you can access it by signing on the the IRgA web-site (at www.irga.com), then go to the Repro
101 Blog, then enter “PlanSwift” in the search box, or you can
access it by clicking on the link immediately below, then scroll to blog-post
(on Feb 14th) that was Textura’s Press Release about its acquisition
of PlanSwift.
note on the Repro 101 Blog entitled, “Textura Acquires PlanSwift”. If you wish to read that previous blog-post,
you can access it by signing on the the IRgA web-site (at www.irga.com), then go to the Repro
101 Blog, then enter “PlanSwift” in the search box, or you can
access it by clicking on the link immediately below, then scroll to blog-post
(on Feb 14th) that was Textura’s Press Release about its acquisition
of PlanSwift.
I attended the ERA Convention that was held in
Hilton Head, SC in the fall of 2011.
That ERA Convention had a mini trade show, and PlanSwift was one of the
exhibitors. I had heard of PlanSwift
before that, but that was the first time I had had an opportunity to meet
anyone from PlanSwift.
Hilton Head, SC in the fall of 2011.
That ERA Convention had a mini trade show, and PlanSwift was one of the
exhibitors. I had heard of PlanSwift
before that, but that was the first time I had had an opportunity to meet
anyone from PlanSwift.
If you are not familiar with PlanSwift, here’s
a link to PlanSwift’s web-site:
a link to PlanSwift’s web-site:
One of the testimonials (among many) from a
PlanSwift user says this:
PlanSwift user says this:
“Eliminating
the hassle of handling the printed plans is a huge benefit and time saver”.
the hassle of handling the printed plans is a huge benefit and time saver”.
At the bottom of the testimonials page,
PlanSwift says this:
PlanSwift says this:
PlanSwift takeoff software,
estimating software is the most widely used takeoff software in the
construction industry, with the price of construction materials now days it
make sense to get the best estimate possible. The days of manually doing
takeoffs are in the past, jobs come fast with furious deadlines for quotes,
using our software will allow you to quote more jobs faster with accurate
pricing according to your digital takeoffs hence leading to less waste,
more income, and a better bottom line.
estimating software is the most widely used takeoff software in the
construction industry, with the price of construction materials now days it
make sense to get the best estimate possible. The days of manually doing
takeoffs are in the past, jobs come fast with furious deadlines for quotes,
using our software will allow you to quote more jobs faster with accurate
pricing according to your digital takeoffs hence leading to less waste,
more income, and a better bottom line.
The deep recession experienced by the A/E/C
Industry, and by Reprographers as well, was caused by a financial crisis that
led to a virtual halt (or, at the very least, a huge slowdown) in A/E/C
Industry activity. Reprographer revenues
from printing plans on paper (and specs as well) took a nose dive. But as we Reprographers know, A/E/C customer
adoption – of technology products and services which enable “less printing” –
has grown, continues to grow and will continue to grow in the future. More and more Reprographers are reporting
that their A/E/C customers are “printing less per project.” When an A/E/C customer adopts “digital
take-off” as the business process for estimating the cost to build projects
(general contractors and sub-contractors all have estimating departments), that
means that there won’t be as many sets printed as there were before the digital
take-off method was adopted.
Industry, and by Reprographers as well, was caused by a financial crisis that
led to a virtual halt (or, at the very least, a huge slowdown) in A/E/C
Industry activity. Reprographer revenues
from printing plans on paper (and specs as well) took a nose dive. But as we Reprographers know, A/E/C customer
adoption – of technology products and services which enable “less printing” –
has grown, continues to grow and will continue to grow in the future. More and more Reprographers are reporting
that their A/E/C customers are “printing less per project.” When an A/E/C customer adopts “digital
take-off” as the business process for estimating the cost to build projects
(general contractors and sub-contractors all have estimating departments), that
means that there won’t be as many sets printed as there were before the digital
take-off method was adopted.
PlanSwift’s business is expected to grow and
it fit interestingly well with Textura’s “construction project management
offerings”, hence the reason why Textura acquired PlanSwift.
it fit interestingly well with Textura’s “construction project management
offerings”, hence the reason why Textura acquired PlanSwift.
I took the time to read Textura’s S-1 Statement to find out how much
business PlanSwift brought to Textura’s table and to find out how Textura paid
for PlanSwift. I was pretty sure that
that information would appear in Textura’s S-1 …. and it was.
business PlanSwift brought to Textura’s table and to find out how Textura paid
for PlanSwift. I was pretty sure that
that information would appear in Textura’s S-1 …. and it was.
Note this paragraph at the beginning of the S-1 document:
The information in this preliminary prospectus is
not complete and may be changed. These securities may not be sold until the
registration statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
not complete and may be changed. These securities may not be sold until the
registration statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
Okay, here we go with the details, and please note that this information
does not appear in any particular order.
does not appear in any particular order.
All of the information below comes directly from this document: “Amendment No. 4 to Form
S-1 REGISTRATION STATEMENT”. Evidently,
this document was filed with the SEC on June 5th, 2013.
S-1 REGISTRATION STATEMENT”. Evidently,
this document was filed with the SEC on June 5th, 2013.
Our
revenue growth (this refers to Textura’s growth) has been driven by an
increase in the number of construction projects being managed on our solutions,
the aggregate client-reported construction value of such projects, and the
number of organizations using our solutions. In addition, the acquisitions of GradeBeam
and Submittal Exchange contributed to our revenue growth in fiscal 2012 and the
acquisition of PlanSwift contributed to our growth in the second quarter of
fiscal 2013.
revenue growth (this refers to Textura’s growth) has been driven by an
increase in the number of construction projects being managed on our solutions,
the aggregate client-reported construction value of such projects, and the
number of organizations using our solutions. In addition, the acquisitions of GradeBeam
and Submittal Exchange contributed to our revenue growth in fiscal 2012 and the
acquisition of PlanSwift contributed to our growth in the second quarter of
fiscal 2013.
Our
acquisition of PlanSwift on January 31, 2013 generated $1.0 million of revenue (and
increased the number of organizations by 1,673) in the six months ended March
31, 2013.
acquisition of PlanSwift on January 31, 2013 generated $1.0 million of revenue (and
increased the number of organizations by 1,673) in the six months ended March
31, 2013.
In another part of the S-1
it says this:
it says this:
PlanSwift
In
order to generate an accurate bid for construction work, the plan drawings must
be reviewed and an accurate determination of dimensions, such as the length and
height of a wall or the square footage of an area, and of units, such as the
number of electrical outlets, must be made. This process is referred to as
take-off. Prices per unit, wastage rates, and other factors can then be applied
to take-off results, and by adding other costs such as labor, overhead and
other items, a complete estimate of the cost of the work to be performed can be
obtained.
order to generate an accurate bid for construction work, the plan drawings must
be reviewed and an accurate determination of dimensions, such as the length and
height of a wall or the square footage of an area, and of units, such as the
number of electrical outlets, must be made. This process is referred to as
take-off. Prices per unit, wastage rates, and other factors can then be applied
to take-off results, and by adding other costs such as labor, overhead and
other items, a complete estimate of the cost of the work to be performed can be
obtained.
PlanSwift
provides advanced functionality that enables users to perform complex take-off
tasks from digital plans, and to use the quantities thus determined as the
basis for estimation of material, labor, and other costs associated with a
project. This approach replaces and improves the traditional method of manual
measurement and unit count from printed plans and the use of paper or
spreadsheet-based methods for estimating costs. Take-off and estimating is an
activity performed by subcontractors, material suppliers, manufacturers, and
general contractors.
provides advanced functionality that enables users to perform complex take-off
tasks from digital plans, and to use the quantities thus determined as the
basis for estimation of material, labor, and other costs associated with a
project. This approach replaces and improves the traditional method of manual
measurement and unit count from printed plans and the use of paper or
spreadsheet-based methods for estimating costs. Take-off and estimating is an
activity performed by subcontractors, material suppliers, manufacturers, and
general contractors.
In another part of the S-1
it says this:
it says this:
In
addition, PlanSwift competes with several take-off and estimating solution
providers including On Center Software, eTakeoff and Cloud Takeoff;
trade-specific take- off solutions such as ConEst (for electrical trades); and
the estimating capabilities or modules of enterprise resource planning
solutions such as Viewpoint, the Sage family of products, CMiC Open Enterprise
and eCMS.
addition, PlanSwift competes with several take-off and estimating solution
providers including On Center Software, eTakeoff and Cloud Takeoff;
trade-specific take- off solutions such as ConEst (for electrical trades); and
the estimating capabilities or modules of enterprise resource planning
solutions such as Viewpoint, the Sage family of products, CMiC Open Enterprise
and eCMS.
In another part of the S-1, it says this:
Acquisitions
On
January 31, 2013, the Company acquired certain assets and assumed certain
liabilities of PlanSwift, LLC (“PlanSwift”). PlanSwift is a developer
and distributor of software with take-off and estimating capabilities for use
in the construction industry. Its solutions expand the Company’s suite of
solutions, especially in the bid estimation process.
January 31, 2013, the Company acquired certain assets and assumed certain
liabilities of PlanSwift, LLC (“PlanSwift”). PlanSwift is a developer
and distributor of software with take-off and estimating capabilities for use
in the construction industry. Its solutions expand the Company’s suite of
solutions, especially in the bid estimation process.
A summary of the purchase price for the
acquisition is as follows:
acquisition is as follows:
|
(Note,
I’ve added three zeros to the numbers) |
|
|
Cash
consideration |
$989,000
|
|
Notes
Payable to PlanSwift |
$1,214,000
|
|
Issuance
of 539,000 shares of redeemable common stock |
$7,898,000
|
|
|
$10,101,000
|
(Note, add three zeros to the numbers in this paragraph)
The
purchase price remains subject to a customary post-closing working capital
adjustment payable in cash, and 81 of the shares issued at the closing are
subject to an escrow arrangement for a period of 18 months after the closing
for purposes of indemnification claims by the Company against PlanSwift under
the acquisition agreement. The notes are payable in two equal installments on
June 28, 2013 and December 31, 2013, or upon completion of an initial public
offering. Within ten business days following the completion of an initial
public offering, one unitholder of PlanSwift has the right to require the
Company to repurchase $1,500 of stock of the Company (based upon the price at
which shares are offered in the offering) that was issued in connection with the
PlanSwift acquisition. In addition, in August 2013, August 2014 and August
2015, PlanSwift (or the unitholders of PlanSwift, if the shares are distributed
to them) has the right to redeem, on each such date, up to one-third of the
shares of common stock issued to PlanSwift in exchange for a non-interest
bearing note payable if the Company does not complete a qualified initial
public offering (one which results in the shares of common stock being listed
on the New York Stock Exchange or similar exchange) by such date. The fair
value of the common shares issued to PlanSwift on the acquisition date are
classified outside of stockholders’ deficit as of March 31, 2013, and if the
shares are not redeemed, it will be reclassified to stockholders’ deficit as the
redemption option lapses over a two and a half year period or as a result of
the completion of a qualified initial public offering.
purchase price remains subject to a customary post-closing working capital
adjustment payable in cash, and 81 of the shares issued at the closing are
subject to an escrow arrangement for a period of 18 months after the closing
for purposes of indemnification claims by the Company against PlanSwift under
the acquisition agreement. The notes are payable in two equal installments on
June 28, 2013 and December 31, 2013, or upon completion of an initial public
offering. Within ten business days following the completion of an initial
public offering, one unitholder of PlanSwift has the right to require the
Company to repurchase $1,500 of stock of the Company (based upon the price at
which shares are offered in the offering) that was issued in connection with the
PlanSwift acquisition. In addition, in August 2013, August 2014 and August
2015, PlanSwift (or the unitholders of PlanSwift, if the shares are distributed
to them) has the right to redeem, on each such date, up to one-third of the
shares of common stock issued to PlanSwift in exchange for a non-interest
bearing note payable if the Company does not complete a qualified initial
public offering (one which results in the shares of common stock being listed
on the New York Stock Exchange or similar exchange) by such date. The fair
value of the common shares issued to PlanSwift on the acquisition date are
classified outside of stockholders’ deficit as of March 31, 2013, and if the
shares are not redeemed, it will be reclassified to stockholders’ deficit as the
redemption option lapses over a two and a half year period or as a result of
the completion of a qualified initial public offering.
The
fair value of the redeemable common stock issued to PlanSwift was comprised of
the fair value per share of the Company’s common stock as of January 31, 2013
of $14.24 and the value attributable to the redemption feature of $226. Using
the Probability Weighted Expected Result Method (“PWERM”)
methodology, the value of the Company’s common stock was estimated based upon
analysis of the Company assuming various future outcomes, including an initial
public offering at various dates, a sale of the Company, as well as the
continuation of the Company as a private enterprise. The fair value per common
share was based upon the probability-weighted present value of these expected
outcomes, as well as the rights of each class of preferred stock, common stock,
convertible debentures, options and warrants. The fair value of the redemption
feature was determined by probability-weighting the fair value of the put
right, as calculated under the Black-Scholes model, for each scenario
contemplated in the PWERM analysis.
fair value of the redeemable common stock issued to PlanSwift was comprised of
the fair value per share of the Company’s common stock as of January 31, 2013
of $14.24 and the value attributable to the redemption feature of $226. Using
the Probability Weighted Expected Result Method (“PWERM”)
methodology, the value of the Company’s common stock was estimated based upon
analysis of the Company assuming various future outcomes, including an initial
public offering at various dates, a sale of the Company, as well as the
continuation of the Company as a private enterprise. The fair value per common
share was based upon the probability-weighted present value of these expected
outcomes, as well as the rights of each class of preferred stock, common stock,
convertible debentures, options and warrants. The fair value of the redemption
feature was determined by probability-weighting the fair value of the put
right, as calculated under the Black-Scholes model, for each scenario
contemplated in the PWERM analysis.
The total purchase price has been
allocated as follows:
allocated as follows:
|
(Note, I’ve added three zeros to the
numbers) |
|
|
Identifiable intangible assets
|
$4,570,000
|
|
Goodwill
|
$5,988,000
|
|
Deferred revenue
|
$(485,000)
|
|
Other current assets (liabilities),
net |
$28,000
|
|
Net assets acquired
|
$10,101,000
|
The
Company believes the goodwill reflects its expectations related to economies of
scale and leveraging of the PlanSwift solution with existing and future
solution offerings. Goodwill is deductible for tax purposes. Identifiable
intangible assets consist primarily of technology and customer relationships,
which are being amortized over a period of three and five years, respectively.
Company believes the goodwill reflects its expectations related to economies of
scale and leveraging of the PlanSwift solution with existing and future
solution offerings. Goodwill is deductible for tax purposes. Identifiable
intangible assets consist primarily of technology and customer relationships,
which are being amortized over a period of three and five years, respectively.
Revenue
of $994 and a net loss of $10 related to the PlanSwift acquisition are included
in the Company’s results of operations from January 31, 2013. The Company has
not disclosed pro forma information related to the PlanSwift acquisition
because this information cannot be prepared without unreasonable effort.
of $994 and a net loss of $10 related to the PlanSwift acquisition are included
in the Company’s results of operations from January 31, 2013. The Company has
not disclosed pro forma information related to the PlanSwift acquisition
because this information cannot be prepared without unreasonable effort.
– – –
– – – – – – – – – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – – – – – – – – – – – –
Blog Publisher’s two final comments:
As to PlanSwift’s sales:
The “SELECTED CONSOLIDATED FINANCIAL DATA” in the S-1 sets forth
Textura’s “sales for the six month period ending March 31, 2013”
Textura’s “sales for the six month period ending March 31, 2013”
In a “note” one
page later, it says, “the acquisition of PlanSwift contributed
$1.0 million of revenue for the six months ended March 31, 2013.”
page later, it says, “the acquisition of PlanSwift contributed
$1.0 million of revenue for the six months ended March 31, 2013.”
And, in one of the
paragraphs on the page that shows the allocation of the purchase price paid by
Textura for PlanSwift, it says this, “Revenue of $994(,000) and a net loss of $10(,000)
related to the PlanSwift acquisition are included in the Company’s results of
operations from January 31, 2013.”
paragraphs on the page that shows the allocation of the purchase price paid by
Textura for PlanSwift, it says this, “Revenue of $994(,000) and a net loss of $10(,000)
related to the PlanSwift acquisition are included in the Company’s results of
operations from January 31, 2013.”
The PlanSwift
acquisition was effective January 31, so it looks like PlanSwift’s sales
revenues for the two month period Feb 1 through Mar 31 were $1.0 million,
meaning revenues of around $500k per month.
acquisition was effective January 31, so it looks like PlanSwift’s sales
revenues for the two month period Feb 1 through Mar 31 were $1.0 million,
meaning revenues of around $500k per month.
So, unless I’ve misread something,
it “looks like” Textura paid $10 mil for a business (PlanSwift’s business) that
was generating around $6 million in annualized revenues, and it also looks like
PlanSwift was operating around breakeven.
it “looks like” Textura paid $10 mil for a business (PlanSwift’s business) that
was generating around $6 million in annualized revenues, and it also looks like
PlanSwift was operating around breakeven.
Textura’s S-1 Registration Statement:
As to the S-1 I
pulled the information from for today’s blog-post, I’ve stored a copy of it in
my Google Docs Library, so, if you want to look through the S-1, you can click
on this link: (it’s a large file, so
you’ll have to give it time to load):
pulled the information from for today’s blog-post, I’ve stored a copy of it in
my Google Docs Library, so, if you want to look through the S-1, you can click
on this link: (it’s a large file, so
you’ll have to give it time to load):
Reprographics 101 