Cross Keys Capital > Portfolio Items > Information and Display Systems, LLC

Our Work

Information and Display Systems, LLC

Closing Date: 12/21/2011

Acquired by Vicente Partners’ Sports Media Technologies | Industry: Software | Sub-Industry: Sport Technology

Deal Overview

Information and Display Systems (“IDS”), founded in 1984 and headquartered in Jacksonville, Florida, is one of the world’s foremost providers of sports technology for the following professional sports: Golf, Tennis, the NBA, and the NHL. IDS has multi-year contracts for many of sports’ most elite and prestigious events such as the U.S. Open (golf and tennis), Wimbledon, the Olympics, and The Ryder Cup. Furthermore, the Company has multiple sources of revenue including broadcasting services, video and display rentals, and custom created sports software.

The Company’s crowning achievement was the ideation and creation of SHOTLinkTM for golf. A computer software program which used computer measuring technologies to evidence speed of the ball, curvature, distance and angles for the major golf broadcasters. Similar measuring devices were invented by IDS in tennis to monitor serve speed and line calls.

With 118 total employees, most of whom were engineers, and a niche business which required routine reinvestment and heavy capital expenditures, IDS was bound to be a difficult M&A transaction. Albeit a fun one given the nature of the industry served and the quality of the shareholders Cross Keys was representing.

Partner concentration with various broadcasters, event organizers and sponsors did not allow for as much business diversity as some buyers demanded. However, exceptional senior management meant an uncanny ability to provide exceptional top-line revenue consistency (at or around $15 million in revenue) and tremendous bottom-line margins. Unfortunately, in the middle of our M&A marketing process, the NBA went on strike which further complicated matters. This complication introduced an important variable regarding timing and driving valuation in our negotiations with strategic buyers such as ESPN, IMG Worldwide, ANC Sports, and various emerging players in the field of sports technology who were VC or private-equity backed. Nonetheless, the Company garnered tremendous interest and had multiple options for which direction it wanted to follow.

As in many of Cross Keys’ assignments, disparate shareholder ages and differing shareholder objectives related to this core holding caused extenuating complications and complexities. Finding both the right transactional structure and the partner for shareholders who wished to remain involved for the foreseeable future was imperative. However, in the bowels of the broadcasting booths at the U.S. Tennis Open in Flushing, NY in the third quarter of 2011, Cross Keys sourced and assisted in negotiations of the perfect marriage. Vicente Partners, a growth equity fund based in Los Angeles, was enamored with their portfolio holding SMT, a sports technology company skilled primarily in the sports of football and baseball. For instance, SMT had a pivotal role in the creation of the “movable yellow-line” which is so prevalent in today’s NFL and college football telecasts.

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