Los Angeles, CA – January 31, 2017 – Diversis Capital LLC, a Los Angeles-based private equity firm that acquires controlling interests in small to middle market companies, today announced that it has acquired ArrowStream, Inc. Based in Chicago, IL, ArrowStream is an industry leader in supply chain technology and logistics services catering to the foodservice industry. Financial terms of the transaction were not disclosed.
Founded in 2000, ArrowStream initially focused on delivering non-asset-based third-party logistics solutions (“Managed Services”) for some of the nation’s largest food chains and foodservice distributors. Since then, the Company evolved and developed two robust, cutting-edge cloud-based software platforms, OnDemand and Crossbow (“Technology”). OnDemand allows food chains and purchasing co-ops to reduce cost and control risk in their supply chains while Crossbow helps distributors simultaneously optimize, plan, monitor and grow their inbound logistics networks with increasing efficiency.
“ArrowStream has an extremely strong reputation for delivering innovative and mission critical solutions to the foodservice industry,” said Kevin Ma, a managing director of Diversis Capital. “As the industry becomes more heavily scrutinized due to the enactment of the FDA’s Food Safety Modernization Act, ArrowStream is well positioned to take advantage of a tremendous opportunity in a market that is rapidly requiring and adopting technology focused on supply chain and food traceability.”
Diversis plans to invest heavily in ArrowStream, specifically in R&D, to accelerate growth and ramp up innovation in the Company’s OnDemand and Crossbow software platforms. Visibility into their supply chain to reduce costs and improve quality and brand consistency is of critical importance to major food chains, and ArrowStream has a successful track record of providing this transparency to its customers.
“We are excited to partner with ArrowStream’s management team at an important juncture in the business, one where the Company’s technology solutions are quickly gaining significant exposure and acceptance amongst large national chains and foodservice distributors,” added Joseph Lok, a Vice President at Diversis Capital.
ArrowStream’s CEO, Frank Morgiewicz, stated “We are extremely excited to be part of the Diversis portfolio. Diversis’ commitment to the growth and success of ArrowStream through investment and technical support will allow for accelerated new product development and continuous refinement in our existing solutions. We are looking forward to continuing to bring new value to our customers and expanding our solutions in the supply chain space.”
Jody LaVoie, who co-founded ArrowStream with her late husband, added, “I am so proud of the entire team and their commitment that made ArrowStream a leader in supply chain and technology solutions for the foodservice industry. It is great to see that, by combining forces with Diversis, ArrowStream will now be able to supercharge the solution roadmap and accelerate growth.” As part of the transaction, Jody will be exiting the business from her position as the Company’s Chairman.
Diversis was advised on legal matters by Stradling Yocca Carlson & Rauth, P.C. ArrowStream was advised on financial matters by WGD Partners, LLC and on legal matters by Sidley Austin LLP.
About Diversis Capital
Founded in 2013, Diversis Capital, LLC (“Diversis”) is a North American private equity firm with a focus on carve-outs, standalone deals and special situations in the lower and middle markets that require both sharp financial acumen and operational expertise to reach success. The tight-knit team of professionals has experience working on complex transactions and leveraging deep hands-on operational expertise to help companies and their management teams achieve full potential. Diversis, which was founded by Managing Directors Ron Nayot and Kevin Ma, is currently in full acquisition mode with a goal of executing several transactions annually.
Senior Marketing Manager