Investment group acquires PKware
Milwaukee-based PKware Inc. has been acquired by an investment group that includes Novacap Technologies, Montreal; Maranon Capital, Chicago; and Garrett Investments LLC, Milwaukee.
PKware’s management team and employees will be retained, and the company will continue to be headquartered in Milwaukee.
Grace Matthews Inc., a Milwaukee-based investment bank, coordinated the formation of the investment group, negotiated the transaction with PKware’s shareholders and invested in the transaction through Garrett Investments, an investment holding company affiliated with Grace Matthews.
PKware was founded in 1986 by Milwaukee software engineer Phil Katz, who passed away in 2000. The company develops and markets data file encryption and compression software that facilitates secure data storage and inter-network communications.
PKware originated the popular "ZIP" file compression program that has been installed on millions of computers worldwide.
The company also developed SecureZIP and PKZI, which are popular programs used by IT professionals.
Novacap Technologies was the lead investor in the transaction, acquiring the majority of PKware’s stock. Maranon Capital provided $38 million in financing for the transaction, with $24 million in senior revolving credit and term debt, $10 million in mezzanine financing, and $4 million in equity. Grace Matthews invested over $1 million in equity through its affiliate Garrett Investments.
"Grace Matthews advised the current shareholders when they bought PKware from Phil Katz’s estate in 2001, and we welcomed the opportunity to work with the company again so that this growing, innovative company would remain here in Milwaukee," said John Beagle, managing director at Grace Matthews. "The company is a real gem in Milwaukee’s business community, and attracts the kind of talented, high-technology workers who otherwise might be tempted to move out-of-state to a more ‘tech-centric’ area."
Doug Mitman is the Grace Matthews managing director who negotiated the transaction.
"Given the state of the economy, the mergers and acquisitions environment is extremely challenging, but this transaction proves that you can still close deals when you negotiate the right terms and are working with an excellent company,” he said. “We were fortunate to find Novacap, who understood PKware’s potential and agreed to take a majority position in the equity, and Maranon, who generously supported the deal with debt financing and additional equity. Grace Matthews showed its commitment by putting up more than $1 million for an equity stake through our affiliate Garrett Investments.”
