Private equity firm Warburg Pincus has committed to invest up to $100 million in Cary-based Dude Solutions, in one of the largest private equity deals involving a Triangle-area firm in recent years.
With the deal, announced Monday morning, the investment giant will take a minority stake in the firm and commit capital for what it calls “strategic acquisitions.” Dude Solutions, the parent firm of SchoolDude and Facility Dude, says it will expand, tripling its 220-employee headcount in the next five years with new hires coming in sales, marketing and information technology.
“This is an example of how you can grow a business right here in the Research Triangle,” Gov. Pat McCrory said, addressing a standing room-only crowd of employees, business and community leaders at Dude Solution’s Regency Parkway headquarters.
Dude Solutions had been completely self funded since Kent Hudson and Lee Prevost co-founded the company 14 years ago. The company’s cloud-based technology manages facilities, ranging from schools to government buildings, primarily in North America. Dude Solutions software manages more than 55 billion square feet of facilities space. Hudson the company’s CEO, said that the technology has helped clients save more than 55 million man hours and saved $1.1 billion through efficiencies.
New York-based Warburg Pincus has more than $35 billion under management, with investments in more than 125 companies. The firm, which was founded in 1966, has raised 13 private equity funds and invested more than $45 billion across 675 companies in 35 countries.
“Dude Solutions has an impressive history of helping its clients save money, increase efficiency and improve services with their facility management solutions across a number of industries,” Alex Berzofsky, Warburg Pincus managing director, said in a statement. “We are excited to work with the team as they continue to expand the SchoolDude and FacilityDude brands through organic growth and strategic acquisitions.”
“This investment is a testament to Dude Solutions’ market leadership, service focus and vision for facilities management,” Hudson said. “As we broaden our reach into facilities management and sectors, where Warburg Pincus has deep domain knowledge, our clients will benefit as we continue to increase the value of our products and services.”
Prevost, the president of Dude Solutions, said the capital would be used to expand what the company has already been doing.
“We chose to partner with Warburg Pincus in part because it appreciated how our entrepreneurial, innovative and industrious culture has enabled Dude Solutions to achieve its success to date,” Prevost said. “With this new capital, we can do more of what we have been doing at even a faster pace.”
Investors have been eying the firm, which recently signed a lease to expand its office space to some 48,000 square feet.
Last summer, Tracy Harris, who works at Credit Suisse, which manages the North Carolina Innovation Fund, told WRALTechWire that SchoolDude was a potential investment target.
Harris said a $5 million to $10 million investment was possible. He said at the time that SchoolDude was expected to become cash-flow positive in 2013.
However, SchoolDude says that it has been cash-flow positive for several years, a company spokesperson told WRALTechWire.
Dude Solutions dates to 1999. It has developed software and services to help school districts, local governments, health care and other institutions to manage and maintain facilities and equipment.
According to the firm’s website: “Today, we’re the #1 provider of cloud solutions for public and private schools, colleges and universities.”
SchoolDude has several thousand clients.
The firm currently lists a handful of open jobs at its website.
