Yes, I know it sounds like a bunch of initials to you. But to me, to CEO Robert Johnson, and to Robert's wonderful group of long-time employees at ESS, it's a gift. You see, we've all cashed out at last. The acquisition press release tells, as usual, almost nothing of the back story, because the acquiring company is public and it only cares that it has
acquired a leading provider of environmental, health and safety (EHS) and crisis management software for enterprise sustainability, for approximately $59 million, net of cash acquired. The purchase price represents about three times revenue and a high single-digit multiple of forward adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
“With this acquisition, our worldwide customers have access to best-in-class products and services from IHS that meet their growing need to manage environmental, climate change and compliance issues – all from a single provider,” said IHS Chairman and Chief Executive Officer Jerre Stead.
Bu in this case, it's more than true. I don't know Jerre Stead, but he's one lucky guy.
I met Robert Johnson in 1999. He had founded a small company, Environmental Support Solutions. His goal: to help companies manage the refrigerants they were using. He had a strong concern for the environment even then, and legislation was being passed to limit VOCS. He wasn't a geek, so he hired someone to write some software, put it on a floppy disk, and he mailed it to customers. When I met him, he had a small, dark office in Mesa Arizona, but he soon convinced me of his vision. He could only pay me $1000 a month for PR. I did it anyway. Coming out of Intel, I was searching for a product with meaning and purpose, and an enterpreneur who wanted to change the world. Robert wanted to save the planet. From the beginning, Robert was a visionary. He's a high strung, very intense guy, and he saw the internet's potential impact clearly. He was ahead of his customers in online access to his products, in CRM, which he bought as soon as he found out it existed, and in platform development. His first foray outside refrigerant management was indoor air quality management. Robert decided he wanted to acquire other mom and pop environmental software companies in other niches, like crisis management, health and safety, Of course he couldn't afford to do that without outside money. I soon fell in love with his vision and became more than a PR person. I actually introducted him to his first investors, friends of mine who were looking for something other than real estate to try. (They stuck with him until the payout, by the way.) When they came in to the deal, I also became an investor, compensated for putting the deal together in shares of ESS. Soon after, the dot com bust came, Robert was saddled with the overhead of a half dozen acquisitions that weren't really integrated into the company, and he was forced to "lay me off" in the PR department. We had a pretty tough couple of years. But I never went away. I continued to help, advise, wish him well, and be his friend, believing in his vision, which I had first seen ten years earlier on a white board in Mesa. And when he had the opportunity (more than one) to sell the company, he took the offer that assured him none of his long-time employees would be let go and everyone would get not restricted stock, but immediate cash. Many people who have been with Robert since the beginning just got proof of his gratitude. What a brilliant man. And what a sweetie.
