Accel-KKR, the private equity firm that closed 2014 by buying Stockholm-based EPiServer and Nashua, N.H.-based Ektron, today confirmed what CMSWire reported more than seven weeks ago.
It's combining the two web content management systems (CMS) under the EPiServer name to "create the most complete digital experience platform in the cloud."
The news came at the exact time winter storm Juno was pummeling Ektron's New England headquarters — an irony not lost on former employee Fred Bals. Bals, who left Ektron in November after five years as manager of its customer advocacy and media relations programs, said simply, "One natural disaster deserves another."
But not everyone was as pessimistic. Ed Rogers, who joined Ektron shortly after his brother Bill founded the company in 1998, said it was potentially positive news. Rogers, who was fired in 2011 and went on to launch Akumina, told CMSWire, "New leadership signals a cultural change. I'm hopeful the new team will put the customer first, something that should be good for Ektron clients."
Long, Strange Road
Today's announcement ends weeks of speculation over the fate of Ektron, a company that consistently ranked as one of the fastest growing tech companies in New England in the early 2000s before stumbling in the past several years.
The company will, for now, live on as a brand under the EPiServer name — without either Bill Rogers or Tim McKinnon, the man who just weeks ago said he was running the day-to-day operations at Ektron.
McKinnon was relieved of his duties as President late last week, sources close to the deal told CMSWire. And just yesterday, in apparent preparation for a leaner, more streamlined company, at least two dozen Ektron employees were also shown the door. Ektron had between 125 and 150 employees before the layoffs. One former employee confirmed with CMSWire his wife was let go yesterday.
It's sounding like lots of folks @ektron won't have work during the storm tomorrow -- or any time after that— Joseph Theriault (@JosephTheriault) January 26, 2015
Massive layoffs at @ektron. Almost no severance offered, even to employees who worked there for years. Already forcing non-disparagement— Ian Muir (@WoogyChuck) January 26, 2015
What About Clients?
What the latest announcement doesn't clearly address is the future of Ektron clients. Despite Ed Rogers' upbeat prediction of a new customer-first culture, there is no clear path yet for all of the companies who have made significant investments in Ektron software and continue collectively to pay annual subscription fees of a reported $12 million.
What do we know for sure? Not much. Both Accel-KKR (AKKR) and Ektron executives have been notoriously tight-lipped since rumors of the sale surfaced, fueling passionate and often heated debate among past and present Ektron employees. Just last week, Ektron delayed its annual conference, Ektron Synergy 2015, by seven months because of low registration numbers. Ektron did not respond to CMSWire requests for comment on the conference.
The newly-merged companies did not say much in the press release issued today about the merger. Authored by Ektron board member and former KANA Software CMO James Norwood, the statement explains that the combined company will operate under the EPiServer name and continue to use the Ektron and EPiServer brands.
It further notes the new company "has a vibrant community of more than 8,800 customers in some 30 countries backed by a robust network of more than 880 partners. It provides marketers, digital and online teams with the power, insight and agility to act on a business moment, and the confidence to realize their aspirations with a technology foundation that supports more than 30,000 websites worldwide."
According to Norwood:
The merger will benefit and protect the investments customers and partners have made in both product sets; provide more options to extend the value of those investments; and converge the best of both offerings into a next-generation Digital Experience Cloud that offers advanced web content management, multi-channel marketing, extensive connectivity, and e-commerce capabilities all on a single platform in the cloud."
Who's in Charge?
Two former executives from Sunnyvale, Calif.-based KANA Software — Mark Duffell, who served as chairman of the board, president and CEO, and ex-CMO Norwood — will lead the new EPiServer.
Duffell has been appointed President and CEO. Norwood will serve as executive vice president Strategy and CMO. Former EPiServer CEO Martin Henricson will assume the role of executive chairman for the merged entity.
Duffell is no stranger to AKKR. A former consultant for the Menlo Park, Calif.-based private equity firm, he was charged with insider trading in 2011 by the Securities and Exchange Commission regarding his 2009 investment activities. The SEC alleged Duffell bought shares of Silicon Valley software company SumTotal Systems while he was involved in discussions on AKKR’s behalf regarding a potential acquisition of SumTotal.
Duffell did not admit to or deny the SEC's claims but agreed in 2011 to settle the charges against him and pay disgorgement and penalties of more than $300,000, according to the SEC.
According to a bio that has since been removed from the KANA website, Duffell has two decades of experience in senior leadership roles. He led KANA's 2010 acquisition of Lagan Technologies. In early 2011, he led another acquisition -- this time of Overtone Inc., bringing KANA's solutions into the cloud and the world of social CRM.
KANA, then a portfolio company of AKKR, itself was acquired by Verint in early 2014 for $514 million.
Before his appointment as CEO of KANA Software, Duffell founded and led M2 Technology Partners, an investment firm specializing in the technology sector. When the company partnered with AKKR, Duffell served as an operational advisor to AKKR for the purchase and privatization of KANA Software.
In the EPiServer/Ektron press release, Duffell described the merged entity as "a new market leading platform from a truly global organization with an incredibly strong partner network emerges to address what remains an underserved segment.”
Jason Klein, managing director, AKKR, said the union "creates a company of significant scale," adding that its customers and partners will benefit "from a closer relationship and accelerated momentum."
Four AKKR managing directors have joined the board of the new EPiServer: Klein, Tom Barnds, Greg Williams and Dean Jacobson.