What would you do if someone called and offered you $100 million to start a business?
OK, that’s not exactly what happened to Dan Mayleben, but that’s kind of how it worked out.
It was the fall of 2006. Mayleben was sitting at his desk at Bloomington glass maker Apogee Enterprises, where he was chief information officer, when he got a call from Mark Hastings, managing director of the U.S. Merchant Bank, the private equity arm of CIBC World Markets, a Boston-based unit of Canadian banking giant CIBC.
Mayleben had worked with CIBC back when he was CFO of Adaytum Software, a Bloomington firm specializing in business intelligence software. CIBC had been an investor in Adaytum, which provided a nice exit in 2002, when it was purchased by Canada-based business-intelligence firm Cognos for $160 million. (IBM acquired Cognos in January.)
Now Hastings was calling Mayleben with an idea for a business: There are thousands of software companies with good products and good customer bases but revenues that have plateaued. How about creating a company that would acquire several of these firms and help them grow by combining their products and providing fresh capital? CIBC would provide $100 million for acquisitions.
Oh, and one other thing: CIBC wanted Mayleben to run this new business with his old friend Chris Heim.
Mayleben and Heim had worked together at HighJump Software, an Eden Prairie company specializing in supply-chain management products. Heim had been CEO, Mayleben CFO. Under their leadership, HighJump had grown from $8 million to $80 million, a growth spurt that made it attractive to Maplewood-based 3M Company, which acquired it in 2004 for $90 million. (In May, 3M sold HighJump to Massachusetts-based private equity firm Battery Ventures for an undisclosed price.)
Heim was running HighJump as a 3M employee when Mayleben called. His arm needed no twisting.
“I really wanted to get involved [again] with a smaller company,” Heim recalls. “If you look at it, taking an established company and ramping the growth is what I did at HighJump, and I saw the exact same opportunity to work with Dan and do it again.”
Heim and Mayleben are doing it again. With CIBC’s blessing and backing, the old HighJump comrades launched 2ndWave Software. It doesn’t actually make software. But it is making some old software companies frisky again.
