News

by Peter Key

Source: Philadelphia Business Journal, July 30, 2004

Prophet 21 Inc.'s theme song could be Sheryl Crow's "Keep on Growing."

The Yardley-based developer of enterprise resource planning software for distributors recently made its fourth acquisition in the past 13 months.

"We have a dual growth strategy," said Chuck Boyle, Prophet 21's president and CEO. "The first leg [is] organic growth, meaning taking our own products to market through our own direct sales force."

The second leg, Boyle said, is "acquiring companies that focus on the same vertical markets that we focus on." Dynamic Data Systems Inc. is one of those. The Los Angeles company's software, Turns, is used by medical products distributors.

The other markets in which Boyle considers Prophet 21 to be dominant are industrial distribution, electrical distribution, fastener distribution, tile and floor-covering distribution and fluid power distribution.

During its 13-month binge, Prophet 21 has acquired companies in three of those.

Faspac Inc. of La Jolla, Calif., which Prophet 21 bought in June 2003, developed software for fastener distributors. Systems Design Inc. of South Holland, Ill., which it bought last November, developed software for tile and floor-covering distributors. And Distributor Information Systems Corp. of Farmington, Conn., which it bought in April, developed software for fluid power distributors.

Prophet 21 didn't disclose how much it paid for any of its acquisitions.

Being able to keep mum about such details is one of the virtues of being a private company, which Prophet 21 has been since January of last year. That's when Thoma Cressey Equity Partners Inc., a private equity firm with offices in Chicago and San Francisco, led a $76 million buyout of Prophet 21.

Prophet 21 management and Philadelphia-based LLR Equity Partners Inc. also participated in the buyout, which helped provide Prophet 21 with the cash for its recent expansion boom.

That boom has served Prophet 21 well. Boyle said the company is producing revenue at a rate of $70 million per year.

But Boyle wants it to keep on growing.

"I would anticipate us hopefully acquiring another four companies next year," he said.

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