Palm Coast Data, LLC

Industry: Business Services
Initial Ownership:
87.2%
Date of Initial Equity Investment:
August 2005
Date of Exit: January 2007

Business Description: Palm Coast Data, LLC (“Palm Coast” or the “Company”) was a leading provider of fulfillment & logistics services to U.S. publishers of magazines and to membership associations. Located in Palm Coast, Florida, the Company had been providing fulfillment & logistics solutions for the magazine publishing industry since 1984. It had clients who included many of the major U.S. publishers and associations. Palm Coast managed subscriber relationships on behalf of its customers by processing payments, maintaining subscriber databases and serving as the primary point of contact (telephone, Internet, and regular mail) between customers and their subscribers or members. 
Investment Thesis: Palm Coast’s business was very predictable (given the Company’s long-term contracts with its customers) and had natural growth opportunities. During the diligence process, the deal team identified a  acquisition opportunity or potential exit opportunity with either of the two larger strategic competitors within the market. Other attractive deal characteristics included:

  • Deep and seasoned management team
  • Strong, stable industry
  • Steady free cash-flow business – good revenue visibility;
  • High RONA
  • Core value proposition to its customers

 

Investment Highlights: The deal team exited investment in Palm Coast in January 2007. The second largest competitor, whom Palm Coast had approached with an offer to acquire, instead made an offer to buy Palm Coast at a compelling valuation. In January 2007, Kable Media Services Inc., a wholly owned subsidiary of AMREP Corporation (NYSE: AXR), purchased Palm Coast. This transaction created one of the largest outsourced fulfillment & logistics platforms in the U.S.

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