In the time since the Community Brands deals were announced, I’ve spoken with senior executives at Abila, Aptify, YourMembership, and some of their competitors. I also attended the Abila Users & Developers Conference, speaking with their customers and consultants, and listened to a keynote presentation from JP Guilbault, Community Brands’ CEO.
I’ve been analyzing the implications of this deal from the standpoint of each company wrapped up in the transaction, based on the conversations I’ve had with my sources.
Today’s post is about Abila.
For background, Abila was formed out of the merger of Avectra and Sage Nonprofit Solutions in July 2013, a deal financed by private equity firm Accel-KKR. Up to that point, Sage and Avectra had little in common. Avectra offered two tiers of its AMS software (netFORUM Pro and netFORUM Enterprise), and Sage offered a suite of products for charitable organizations, the most significant of which was a fund accounting package (Sage MIP). Krista Endsley, Sage’s General Manager, was named CEO of Abila after the merger.
Significant turnover at the Avectra offices ensued soon after the merger. Virtually the entire executive suite turned over. Some industry insiders characterized the transition as rocky, and one longtime Avectra client I spoke to called it “chaos.” My sources tell me that Abila leadership, in hindsight, regretted the mass exodus of personnel.
With its round of funding from Accel-KKR, Abila went on to acquire Peach New Media, provider of an LMS platform called Freestone. With an expanding line of products, industry observers expected to see Abila take a page out of YourMembership’s playbook and make additional acquisitions; but those deals never materialized.
Abila’s CEO Endsley departed the company in February 2017 and was replaced by Craig Charlton, an Accel-KKR advisor. Her departure was coupled with rumors (substantiated by well-placed sources) that Abila had been shopping around for a buyer since 2015. The Abila deal closed one month after Charlton was hired. Some conjectured that Charlton was hired just to get a deal done, but he vigorously denies that rumor.
Abila brings a large DC-area office to Community Brands, an asset that YourMembership has lacked.
Abila’s customer base of approximately 8,000, when taken as a whole, could be described as all over the map. There are approximately 300 large association clients running netFORUM Enterprise, around a thousand netFORUM Pro clients (trending small-medium sized), about 6,000 nonprofit (not association) clients running Sage products, and around 100 Freestone clients.
The short term effects of the Community Brands deal aren’t that significant for Abila customers, in my view. Many Abila staff have been through a merger before, giving them experience to draw from, and I predict the disruption for Abila customers will be minimal. From experience, we’ve learned that the transition from one private equity firm to another gets easier with each subsequent investment.
The long term effects will be interesting to watch. Community Brands staff will be challenged with how to manage three Abila products that compete with other products in the Community Brands portfolio.
- netFORUM Enterprise vs. Aptify
- netFORUM Pro vs. YourMembership
- Freestone vs. Crowd Wisdom (aka YM Learning and Digital Ignite)
Abila’s purchase price was rumored to be in the $150-$200 million range.
Thank you for this excellent analysis. One of my biggest concerns is whether Community Brands sees Abila’s Millennium product as an asset to invest in and promote. I hope that, since none of the other products in their stable serve large fundraising organizations, Millennium will be seen as the jewel in the crown. On the other hand, most of the products that they have acquired are Association Management solutions. If that’s the market they’re going after, Millennium is not a fit and may fade away.