Buyout (LBO, MBO, MBI) • Software

ABS Capital Partners, Apogem Capital and Norwest Equity Partners Acquire Rosetta Stone

On January 4, 2006, private equity firm ABS Capital Partners, asset manager Apogem Capital and private equity firm Norwest Equity Partners acquired software company Rosetta Stone

Acquisition Context
  • This is ABS Capital Partners’ 2nd, Apogem Capital’s 1st and Norwest Equity Partners’ 1st transaction in the Software sector.
  • This is ABS Capital Partners’ 20th, Apogem Capital’s 4th and Norwest Equity Partners’ 19th transaction in the United States.
  • This is ABS Capital Partners’ 3rd, Apogem Capital’s 1st and Norwest Equity Partners’ 1st transaction in Virginia.
Investment Fate
  • Rosetta Stone went public in 2009.
  • Rosetta Stone was sold to a strategic buyer in 2021.

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M&A Deal Summary

Date January 4, 2006
Target Rosetta Stone
Sector Software
Buyer(s) ABS Capital Partners
Apogem Capital
Norwest Equity Partners
Deal Type Buyout (LBO, MBO, MBI)

Target Company

Rosetta Stone

Arlington, Virginia, United States
Rosetta Stone is a provider of online language learning software. Rosetta Stone was founded in 1992 and is headquartered in Arlington, Virginia.
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Buyers Overview 3

Buyer

ABS Capital Partners

Hunt Valley, Maryland, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 1990
PE ASSETS 2.5B USD
Size Large
Type Sector Agnostic
DESCRIPTION

ABS Capital Partners is a private equity firm that invests in later-stage growth companies in the healthcare, technology, business services, media and communications sectors. ABS provides capital to help fund growth, provide shareholder liquidity, pursue acquisitions, or to effect a management buyout. The Firm prefers US based business and will consider both majority and minority positions. ABS looks to commit $10 to $25 million per transaction. ABS Capital was formed in 1990 and has offices in Baltimore, Maryland; Waltham, Massachusetts; and San Francisco, California.


Deal Context for Buyer #
Overall 20 of 65
Sector: Software 2 of 6
Type: Buyout (LBO, MBO, MBI) 9 of 20
State: Virginia 3 of 5
Country: United States 20 of 63
Year: 2006 1 of 4
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2005-12-01 Commerce5

Eden Prairie, Minnesota, United States

Commerce5, Inc. provides managed e-commerce services for hard goods manufacturers and software publishers. The Company's core e-commerce solutions deliver the industry's leading connectivity into major distribution partners, enabling sophisticated, real-time fulfillment operations. Spun off from Buy.com in 1999, today, Commerce5 grows online sales for clients through its e-marketing solutions, delivering a leading-edge online shopping experience to their direct-to-business and consumer online stores. Commerce5 is headquartered in Aliso Viejo, Calif.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-02-23 Liquidity Services

Bethesda, Maryland, United States

Liquidity Services is an online auction marketplace for wholesale, surplus and salvage assets. LSI enables its corporate and government sellers to enhance their financial return on excess assets by providing a liquid marketplace and value-added services that integrate sales and marketing, logistics and transaction settlement into a single offering. Liquidity Services was founded in 1999 and is based in Bethesda, Maryland.

Sell -
Buyer

Apogem Capital

Chicago, Illinois, United States

Investor Investor Investor Investor Investor


Category Asset Manager
Founded 2001
PE ASSETS 39.0B USD
Size Mega
Type Sector Agnostic
DESCRIPTION

Apogem Capital is a diversified alternative investment manager and subsidiary of insurance provider, New York Life. Apogem manages a variety of investment strategies including private equity, private credit, and real assets. Within private equity, the Firm looks to make fund, direct, and secondary investments, as well as acquire GP stakes. Within its direct investing activity, Apogem targets mid-sized companies valued up to $250 million and will consider businesses throughout North America and Europe. Apogem Capital formed as the result of New York Life combining PA Capital, Madison Capital Funding, and Goldpoint Partners into one entity. Apogem Capital is based in New York City.


Deal Context for Buyer #
Overall 4 of 70
Sector: Software 1 of 6
Type: Buyout (LBO, MBO, MBI) 2 of 22
State: Virginia 1 of 2
Country: United States 4 of 70
Year: 2006 1 of 3
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2005-05-25 Kurt Versen Co.

Westwood, New Jersey, United States

Kurt Versen Co. is a designer and manufacturer of high end specification-oriented, recessed downlighting for commercial applications. Kurt Versen Co. was formed in 1920 and is based in Westwood, New Jersey.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-02-10 Optronics Products

Muskogee, Oklahoma, United States

Optronics Products, Inc. is a supplier of vehicular lighting products and related accessories. The company sells a broad range of lighting products to automotive, outdoor and mass merchant retailers, as well as OEM customers.

Buy -
Buyer

Norwest Equity Partners

Minneapolis, Minnesota, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 1961
PE ASSETS 6.7B USD
Size Mega
Type Sector Agnostic
DESCRIPTION

Norwest Equity Partners (NEP) is a private equity firm focused on investing in growing and profitable middle-market companies. NEP targets investments in businesses valued between $50 and $500 million, typically investing $75 to $175 million of capital per investment. Funds are typically used to fund management buyouts, recapitalizations, and growth financing. Sectors of interest include manufacturing, distribution, healthcare, technology/business services, and consumer products/services. NEP is affiliated with Norwest Mezzanine Partners, an investment partnership focused on providing junior capital to middle-market companies. Norwest Equity Partners is based in Minneapolis, Minnesota.


Deal Context for Buyer #
Overall 19 of 75
Sector: Software 1 of 3
Type: Buyout (LBO, MBO, MBI) 10 of 19
State: Virginia 1 of 1
Country: United States 19 of 72
Year: 2006 1 of 5
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2005-08-19 Michaels of Oregon Co.

Overland Park, Kansas, United States

Michaels is an manufacturer of accessories for the hunting, shooting sports and law enforcement markets.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-04-01 DCM Services

Bloomington, Minnesota, United States

DCM Services is a provider of tech-enabled estate receivables management solutions and SaaS software to multiple end markets, including financial services, healthcare, utilities, telecom, and others. DCM Services was founded in 1998 and is based in Bloomington, Minnesota.

Buy -