DFW Capital Partners closes acquisition of Vertex Group

DFW Capital Partners (“DFW”) announced today that it has completed the acquisition of Vertex Group (“Vertex” or the “Company”), a leading provider of customer information system (“CIS”) software and integration services to the mid-market public and investor-owned utility industry, from private equity firms Oak Hill Capital and GenNx360 Capital Partners. Within a utility, the CIS is the mission critical platform responsible for meter data collection and communication, bill calculation and generation, customer payment adjudication, usage and billing history, field service deployment and management, call center and customer service operations and all customer communication across a myriad of channels. Vertex provides a robust CIS experience through its leading VertexOne platform, providing water, electric and gas utilities with a lower total cost of ownership and greater ease and speed of implementation. This is achieved through significantly reducing risk utilizing the VertexOne proven business process migration methodology and a modern prebuilt solution on top of SAP’s S4 HANA technology stack. The Company’s solution is provided as an integrated Business Process as a Service (“BPaaS”), with VertexOne at the core along with fully integrated customer analytics, bill presentment and payment, omni channel and customer preferences, customer and field mobility, and a comprehensive Customer Relationship Management engine. These solutions are designed to work together as a comprehensive platform or as modules to provide this underserved mid-market with a robust tier- one business and technical solution right-sized for each utility. Vertex is DFW’s first portfolio investment in its newest fund, DFW Capital Partners VI, LP, which held its final closing in April 2019 with $500 million in aggregate commitments.

DFW led the acquisition of Vertex from a holding company that had, over the past several years, divested of various utility-facing call center services business, with the remaining Vertex business solely focused on providing a comprehensive BPaaS offering across many different CIS platforms. The transaction provides Vertex management with the time and capital runway necessary to fulfil on the long-term market opportunity to capture market share with a market-leading technology solution like VertexOne. Andrew Jornod, Vertex’ CEO, commented “This new partnership with DFW comes at a key time within our industry and significant market potential for VertexOne. We have seen over the past couple of years a majority of utilities seeking a Cloud based solution and with over 36 Vertex utility customers running in a BPaaS Cloud environment today, Vertex is years ahead of our competition. After many months of working together with the leadership at DFW, I am very excited in the future of this partnership for our customers and all of the Vertex employees around the world.”

Keith Pennell, Managing Partner for DFW, added “DFW is thrilled to partner with Vertex and its management team at an exciting time in the utility industry. Increasing regulatory requirements around customer service levels, coupled with the rise of consumerism in utility purchasing, is coinciding with a continued ageing of existing CIS infrastructure. The VertexOne platform addresses numerous pain points for mid-tier utilities who want full functionality, today and in the future, but lack the budgets, internal expertise or timeline to adopt customized tier-one solutions like SAP and Oracle. The Company’s innovative and comprehensive BPaaS approach, coupled with the power of the underlying SAP S4 HANA platform, represents a highly attractive option for utilities and is expected to drive considerable future growth as customers seek to upgrade or replace their outdated CIS infrastructure.”

Capital Southwest Corporation and East West Bank provided senior debt financing to DFW in connection with the transaction. Vertex and its parent company were represented by R. W. Baird.

About DFW Capital Partners

DFW Capital Partners is a private equity investment firm focused on lower middle-market companies. The firm concentrates on service companies, with an emphasis on healthcare and outsourced business and industrial support services. DFW has established a 20+ year track record of success in both building leading companies and recognizing attractive returns for its investors. DFW is headquartered in Teaneck, New Jersey and maintains an office in Chevy Chase, Maryland.