Equity firms acquire pair of homegrown Sarasota tech companies

SARASOTA — In separate deals, private equity and asset management firms have acquired a pair of Sarasota homegrown tech companies that specialize in online affiliate and pay-for-performance, or clicks, marketing.

Notably, one company sold, Revcontent, started as a unit of the other acquired company, Perform[cb]. Perform[cb] was originally named Clickbooth when it was founded in 2002. Clickbooth, one of the first pay-per-click firms in the country when it was founded, launched Revcontent in 2013 as a native content, or sponsored content, website for publishers. That’s now a $40 billion industry, according to a statement. In practice, some of the native content can also be the sites behind the ‘you may also be interested in” or “from around the web” taglines at the bottom of web stories.

Sarasota entrepreneur and commercial real estate investor John Lemp founded both Clickbooth and Revcontent. He no longer has active leadership roles in either firm.

Both firms have exploded in growth over the past five years.  As recently as 2017, Revcontent, for example, had $183.8 million in revenue, when it made the Inc. 500 list of the nation’s largest private businesses. With some 80 employees, Revcontent was also named a GrowFL company to watch last year, when, company officials say, it paid out more than $500 million to online publishers. Perform[cb], meanwhile, which changed its name from Clickbooth in early 2020, was ranked the No. 1 cost-per-action marketing website by mThink, publishers of Revenue+Performance, in 2017, 2018 and 2019, according to a statement. The company had 135 employees through early 2020.

In one deal, announced in early June, a group of institutional investors led by New York-based Star Mountain Capital and Capital Dynamics acquired a majority stake in Revcontent. Capital Dynamics is based in Switzerland and has offices worldwide, including locations in New York and Naples. Financial terms of the deal weren’t disclosed.

Star Mountain Capital manages some $2 billion in assets across a variety of industries. “We are extremely excited to partner with Richard Marques and the management team at Revcontent to help them accelerate growth by adding new products, capabilities, and additional, talented staff,” Star Mountain Managing Director Bruce Eatroff says in a statement. “We believe Revcontent has a unique position within the native advertising market and will benefit from advertisers' increasing focus on contextual advertising, given a number of the changes occurring to restrict consumer privacy.”

Revcontent CEO Richard Marques, in an interview with the Business Observer, says the firm hired some investment bankers in 2018 to strategize on a growth path: raise capital or find a buyer. It chose the acquisition path, Marques says, with the idea to find a partner not, merely an exit strategy. He believes Revcontent found that in Star Mountain.

“We want to be $1 billion business,” Marques says. “Sometimes the only way you can do that is with outside players. (Star Mountain and Capital Dynamics) have a ton of experience in our industry, which is hard to come by.”

Significantly, Marques adds, the new majority owners will be consultative, and are “not going to be pulling all the levers and telling us what to do.”

In the other deal, announced in early May, Toronto-based private equity fund Beringer Capital, which specializes in the media, marketing services, and technology sectors, acquired Perform[cb] from Centre Lane Partners. Financial terms weren’t disclosed. (Centre Lane Partners acquired Perform[cb] in 2016.)

“We’re confident that the Beringer Capital team will provide value-add from day one,” Perform[cb] CEO Erin Cigich says of the firm’s new owner, which acquired prominent media and events company Adweek in 2016. “Our aim at Perform[cb] is to serve as a one-stop performance marketing destination that provides outstanding ROI and experience for marketers, advertisers and affiliate partners alike. The Beringer team’s deep understanding of this sector, combined with their demonstrable experience in identifying niche opportunities, make them an ideal partner.”