Private equity firm acquires TMS vendor MercuryGate

Logistics technology provider MercuryGate International Inc. today said it has been acquired by the Boston-based private equity firm Summit Partners, and has named Joe Juliano, the former president of supply chain software vendor RedPrairie Corp., as its president and CEO.

MercuryGate plans to work with Summit on accelerating innovation and enabling global ecosystem growth for its software as a service (SaaS)-based transportation management system (TMS), the company said.

Monica Wooden

Steve Blough

Cary, N.C.-based MercuryGate has been led by CEO Monica Wooden and President Steve Blough since they co-founded the company in 2000. As part of this transaction, Wooden will now transition into a customer-facing role as chief revenue officer, Blough will take on the position of chief product officer, and Juliano, who holds the title of executive-in-residence (EIR) with Summit Partners, will take over the executive reins.

Terms of the acquisition were not disclosed, but MercuryGate said the deal closed on Aug. 23. In addition, Summit Partners managing directors Peter Rottier and C.J. Fitzgerald will join the MercuryGate board of directors.

The deal comes at a time when the transportation management sector is facing enormous pressure from rising e-commerce parcel shipping volumes and a capacity crunch in the trucking freight market.

That challenging business climate contributed to the company's decision to seek an investment partner, MercuryGate Chief Marketing Officer Karen Sage said in an interview. "We went with a private equity partner in part because of a shared vision with Summit on where we want to take the company," Sage said. "We didn't want to go with another technology firm because we are really passionate about what we do and want to stay focused in this area."

MercuryGate defines its position in the market as providing a powerful TMS platform at an affordable price, and says it has applied that formula to a range of customer segments, including shippers, third party logistics providers (3PLs), freight forwarders, freight brokers, and carriers.

Following the acquisition, MercuryGate plans to continue all relationships with all those current clients, even as the company positions itself for rapid growth. "[The acquisition] is going to bring MercuryGate to the next level of scale. It will offer our customers opportunities for greater success and growth," Sage said. "Expansion into different areas is very much on the table. There is a lot of opportunity for us."

The pressure for companies to control their supply chain and transportation costs offers an opportunity for MercuryGate to expand its position in the sector, Summit Partners' Fitzgerald said. "MercuryGate offers a strong product with incredibly rich functionality," Fitzgerald said in a statement. "We believe the company is strongly positioned for continued growth, as organizations large and small seek SaaS solutions to manage their transportation and logistics operations for improved productivity and operational efficiency."

Joe Juliano

MercuryGate's new president and CEO can help guide the company's planned growth by relying on hissupply chain industry experience and his specialty in SaaS-based systems, Summit said. Prior to joining Summit Partners, Juliano was president and CEO of IQNavigator, a SaaS-based workforce management software vendor, and was president of RedPrairie, which merged with JDA Software Inc. in a $1.9 billion deal in 2012. Juliano has also served as president and CEO of the SaaS-based supply chain financing company PrimeRevenue.

Another factor fueling MercuryGate's ambitions is the aggressive game plan of its new parent company. Summit Partners invests in companies in the sectors of technology, healthcare and life sciences, and growth products and services, the firm says. Among its other investments are the business software giant Infor, including its GTNexus supply chain software unit, and the ride-sharing pioneer Uber Technologies Inc.

According to its website, Summit Partners helps the companies it acquires grow by offering the guidance to expand their geography, prepare for mergers and initial public offerings (IPOs), ramp up their sales force, recruit talent, scale their infrastructure, and support acquisitions.

"We selected Summit Partners amongst many other suitors because Summit shares our vision and commitment to extend the foundation we have built into a platform for accelerated innovation, global ecosystem enablement, and customer scale," MercuryGate's Wooden said in a statement. "I was looking for an investment partner that had the growth-oriented strategic and operational resources to take us to the next level, and I found that formula in Summit Partners."