Carlyle, JMI join forces in C$180m take-private

The firms will pay C$2.90 per share for Gemcom Software International, a Canadian developer of software solutions for the mining industry.

Mega-buyout firm The Carlyle Group and business services specialist JMI Equity have teamed up for a C$180 million ($177 million, €115 million) take-private of mining software developer Gemcom Software.

The firms will pay C$2.90 in cash for each share of Gemcom common stock, representing a 16 percent premium over the Vancouver-based company’s weighted average closing price over the last 45 days, according to a statement.

If approved by Gemcom shareholders, the deal is expected to complete by July. On news of the deal, Gemcom stock had jumped 7.9 percent at press time.

“Gemcom is an ideal fit with our investment strategy – it is a high-growth company with leading market share, providing compelling solutions to the global mining sector,” Brooke Coburn, managing director and head of Carlyle Venture & Growth Partners, said in a statement.

Gemcom, which services clients in 90 countries from 19 locations worldwide, saw its total revenue nearly double last year to C$35.85 million. Gross profit also grew from C$15.24 million in 2006 to C$28.67 million in 2007. Major Gemcom clients include mining giants BHP Billiton, Codelco and De Beers.  

Both Carlyle and JMI declined to comment. Other financial details of the acquisition should be made public later this week through regulatory filings with the Canadian Securities Administration.

Baltimore-based JMI, which manages roughly $1.3 billion in capital, is no stranger to partnering with larger firms in technology-focussed buyouts. JMI has invested alongside Hellman & Friedman in two deals, a $1.8 billion buyout of US human capital managers Kronos last year, and a $1.1 billion take-private of online advertiser DoubleClick in 2005. JMI also teamed with TA Associates in 2006 in the $200 million buyout of software developer Global 360.  

The sale of DoubleClick to Google last year for $3.1 billion gave JMI a return of eight times its $20 million investment, and helped JMI to close its largest fund to date on $600 million.

Formed by tech-focussed investment firm Alex Brown veterans in 1992, JMI investments typically range between $10 million and $60 million.

Washington DC-based Carlyle, which recently topped sister publication Private Equity International’s PEI 50, a ranking of the world’s largest private equity firms, has targeted several business services firms in recent years.

The firm’s most venture and growth fund portfolio includes Archive Systems, a New Jersey-based provider of automated services to streamline document-based work, and RMI, an Atlanta-based provider of web-based logistics solutions for the transportation industry.