ABRY's involvement in ProQuest began almost five years before the actual investment was made. On a prospecting trip to Maryland, we found an extremely attractive family-owned business, Cambridge Information Group, providing information services to libraries around the world. While there was no immediate investment opportunity to pursue, as the founder had no need for capital and no interest in selling the company he had spent years building, we began a relationship that would develop and mature over time.
Several years later, Cambridge’s founder called us with a proposition. He was the majority shareholder in a company providing information services to the airline industry and wanted to acquire a division of a large European company providing similar services. He needed mezzanine financing to complete the acquisition and believed that ABRY would be a valuable partner.
As our partnership with Cambridge grew, we started actively exploring acquisition opportunities for their library information company. In December of 2006, we identified an ideal candidate in ProQuest. ProQuest was a large public company that had violated its bank covenants and was suffering from a lack of liquidity as a result of intense pressure from its bank syndicate. We knew that one of ProQuest’s operating subsidiaries was a perfect fit with Cambridge. If a rapid solution could be provided for ProQuest’s liquidity problem, ABRY believed the ProQuest board would be willing to sell the division at an extremely attractive price. ABRY and Cambridge quickly mobilized a diligence team and undertook the complicated task of segregating and validating the operating results of the division. After a comprehensive review, we made an offer that was accepted by the board and quickly closed the transaction.
In the diligence process, we and our partners at Cambridge, identified numerous operating improvements and revenue synergies that could be realized by combining the ProQuest division with Cambridge. Within twelve months of completing the acquisition, the EBITDA of ProQuest increased by over 50%.
ProQuest and Cambridge are now fully integrated and the management team has completed two follow-on acquisitions that further enhance the product offering of the combined company.