A source told TechCrunch this week that Ektron, a web content management firm based in Nashua, NH has been sold to an unnamed private equity firm for around $48M plus taking on $50M in debt. The source said the actual cash exchanged in the deal would only be in the $30M range, which is pretty low for an established enterprise software company.
It’s worth noting that the company has refused to comment to this point in response to several requests for confirmation. One source close to the company told us they couldn’t comment on it, but didn’t refute it either.
An industry source we’ve spoken to reported hearing a similar rumor, but cautioned that there have been rumors of this sort in the past, adding they believe this one will pan out.
And a third industry insider told us it was worthwhile pursuing, but couldn’t say more.
Ektron has received $4.5M in funding to date plus an undisclosed amount from private equity firm Accel-KKR earlier this year. We have been unable to confirm if Accel-KKR is the buyer, although an industry source told us “It would make sense to me that their primary backer would make an acquisition.”
Ektron has been in the web content management business since 1998, coming to the industry fairly early on, and they have a large install base. Customers include Walmart, National Geographic, Lloyd’s Bank and John Hancock Long-term Insurance.
Web content management systems help companies create and manage web sites with various degrees of complexity. Ektron seems to be doing well, but WCM is currently very much in flux as the industry shifts from a pure web focus to a broader multi-channel view, with a bigger emphasis on mobile devices.
That’s because more people are accessing the web or interacting with brands increasingly on mobile devices. In a presentation yesterday at the Gilbane Conference in Boston, Brad Kagawa, VP of Technology Content Management Systems at the New York Times, said in April, 2013, 50 percent of their web traffic to article pages came from mobile devices for the first time. He reported that by August that number had surpassed 50 percent, suggesting a significant change in usage patterns in which the New York Times is very much a canary in the coal mine for the industry at large.
Meanwhile, web content management itself has become increasingly commoditized as vendors share a common set of functionality, making it much more difficult to differentiate products in the market. One way companies including Ektron are trying to do that is to have a greater digital focus. In fact, the entire industry is pivoting to what they are calling customer experience management where they attempt to provide the optimal experience for the customer, however they interact with a company based on what they know about them.
This means that increasingly companies are trying to provide a more customized experience, rather than give everyone the same generic content. We recently reported on how Acquia is trying to provide ways to tell marketers more about visitors and present more customized content based on what they can glean from them, even when they are anonymous. You can still understand things like device, IP address and other information even when customers don’t choose to share information explicitly about themselves.
Against this backdrop, Ektron has remained in the middle of the pack in the $30-50M revenue range, as CMS Wire reported in July. What would make this sale more surprising if it turns out to be true is that one of the companies that shares that revenue category, Telerik, was sold earlier this year for $262.5M. Telerik had more to offer beyond its content management tool, but it’s still significantly more money than what Ektron has reportedly received if the sale rumor is accurate.
Update 12/5/14: Ektron released a press release today stating they had received additional investment from Accel-KKR, but did not call it a sale. They would not say how much the new investment was or what stake Accel-KKR has in the company, but company president Tim McKinnon told TechCrunch that the investment was primarily for liquidity purposes to pay off early angel investors who were ready to cash out after 15 years.
