New Berlin-based industrial technology startup MCT Digital Inc.
has been acquired by Tolland, Connecticut-based Gerber Technology
for as much as $10 million.
MCT, established by Nik Mikkelsen in 2011, makes integrated hardware and software finishing solutions for the sign and graphics and packaging markets. The company also owns CutGuru.com to supply cutting blades, router bits and cutting mats/conveyors. MCT, which has 28 employees, distributes its systems worldwide. Steen Mikkelsen, chief executive officer of MCT, developed the i-cut software that has helped drive an industry-wide print-to-cut workflow system.
Gerber Technology, which is owned by New York private equity firm AIP, creates software and automation products for apparel and industrial customers’ manufacturing and design needs. Gerber invented automated cutting in 1968, and developed innovative design and cutting processes for vinyl in the sign and graphics industry. It has 78,000 customers in 134 countries, including more than 100 Fortune 500 companies.
"The product leadership, engineering and technical knowledge of these two companies creates countless opportunities to help our customers improve their productivity, streamline their workflows and improve overall efficiency," said Scott Schinlever, president and chief operating officer of automation solutions for Gerber Technology.
"We are very excited about combining our technology platform with Gerber's global scale to drive growth," Nik Mikkelson said. "The passion, focus and culture of our two companies are very well aligned and will maintain the same standard of excellence our customers expect and our employees deliver."
MCT’s growth was financed by a number of investors, including the Milwaukee-based Wisconsin Super Angel Fund
WSAF made its initial investment in MCT in August 2013, and then made several follow-on investments, for a total of $1.8 million invested over four years along with its limited partners, said Tom Schuster, managing general partner at WSAF. The fund has a 35 percent ownership stake in MCT, which has raised a total of $4.5 million in about six funding rounds.
Gerber invested $3.5 million in MCT upfront, with a three-year earnout agreement in place. Based on the company’s performance during the earnout period, MCT ownership could be paid more than $10 million total for the acquisition, Schuster said.
“We really don’t know what the selling price is going to be because they are basically buying the company based upon a percentage of the next three years’ revenue,” he said.
MCT needed a larger partner to scale its business and compete with larger companies, Schuster said.
“The company that bought MCT is basically the 800-pound gorilla, worldwide, in the digital cutting market,” he said. “The machine tool industry is very cash intense, and as a startup, our technology was really what they were looking for and they can enter the market much faster than we can.”
Gerber plans to retain MCT’s employees and its New Berlin facility as an R&D center, Schuster said.
“It’s really a great example of what can happen here in Milwaukee,” he said. “This is a manufacturing hub and it’s a great place to build machinery.”