Foxtrax Vehicle Tracking Acquired by Investor Group

December 2014       Download PDF      Print

Client Objective

Patrick Brannan founded FoxTrax Vehicle Tracking, Inc. in 2008 after recognizing a market opportunity for web-based fleet management software that leveraged the contemporaneous development of cellular phone devices with built-in GPS sensors. Although the software was originally intended to utilize cellular devices, Brannan ultimately repurposed the software for more reliable, dedicated GPS devices. After the software was complete, Brannan sold a majority stake in FoxTrax to Computime Equity Ventures (CEV). The infusion of capital from CEV helped Brannan market his product and build brand awareness across the fleet management solutions industry.

Over the next several years, FoxTrax and CEV built a scalable software-as-a-service (SaaS) business model. The company rapidly expanded its market share by offering its customers a unique product: a high-functionality, low-cost subscription service without the typical contractual obligation. By 2014, CEV had met its growth objectives for FoxTrax and decided to seek a return on its investment.

Solution

Patrick Brannan and CEV approached Allied Business Group for assistance in finding a compatible buyer for FoxTrax. We began the sell-side process by performing a business valuation, which provided insight on the company's strengths, weaknesses, and growth opportunities. It also helped our client develop realistic expectations of what price a buyer might be willing to pay for FoxTrax.

Next, we carefully identified over 300 companies in the software and telecommunications industries as potential buyers. We then sent contacts at each company a letter and one-page blind prospectus that introduced FoxTrax as an unnamed SaaS provider of fleet management solutions. We then launched an e-mail campaign containing the same information, which reached nearly 9,000 private equity investors across the country and additional strategic buyer contacts.

When each interested party responded and signed a non-disclosure agreement, we provided that potential buyer with a detailed document called a Confidential Information Memorandum (CIM). A CIM, the most important document in the sale of a business, is a 50-75 page book providing an in-depth look at a company's operations, management team, past financial performance, and future opportunities.

Our expansive yet focused confidential marketing process resulted in nearly 100 interested buyers inquiring about FoxTrax, including Chicago Growth Partners (CGP). CGP contacted Allied with interest in acquiring FoxTrax by way of their majority-owned portfolio company, Marathon Data Services. Marathon already had an established presence in the SaaS industry, but lacked fleet management software with GPS support. Further, they had been outsourcing functions which FoxTrax had already established in-house.

Result

Marathon Data Services, a majority-owned company of CGP, acquired FoxTrax in January 2015. The acquisition allowed Marathon to add value to its existing suite of products; save money by bringing essential processes in-house; and cross-sell their expanded offerings to a wider customer base. FoxTrax benefited from the greater resources and support of Marathon's management team. Further, following the wishes of both parties, Patrick Brannan, retained his role as CEO of FoxTrax.

About FoxTrax Vehicle Tracking, Inc.

FoxTrax Vehicle Tracking, Inc. is a software-as-a-service provider offering GPS-enhanced, web-based fleet management software. FoxTrax was founded in 2008 by Patrick Brannan and is based in St. Louis, Missouri.

About Chicago Growth Partners

Chicago Growth Partners is a venture capital and private equity fun d founded in 2004 and based in Chicago, Illinois. CGP invests in middle market companies within the technology, healthcare, and service industries.