Private equity firm Strattam Capital is to partner with Blacksmith Applications’ management team to make an investment that will support expansion of the product suite in response to growing customer demand.
Under the terms of the agreement, Strattam is purchasing a majority ownership position from existing shareholders. The company’s leadership team, led by Founder and CEO Paul Wietecha, will retain a significant ownership stake.
“Our partnership with Strattam is a terrific development for Blacksmith, our employees, and our customers, who trust our easy-to-use, scalable platform with their most critical information every day,” said Paul Wietecha, who, along with the rest of the Blacksmith management team, will remain in his current position. “Strattam’s sector focus, collaborative approach and expertise with data-driven software models make this an ideal partnership. Together, we will strengthen our leadership position in the food services market and expand our data analytics capabilities into other areas of the CPG industry.”
The market for trade spend management applications has expanded significantly as transaction complexity in the CPG industry has increased. The Blacksmith platform, used by many of the world’s largest and most recognised brands, enables customers to better manage their contracts, more effectively deploy pricing discounts and promotional offers and gain insight into the effectiveness of their trade spend. Blacksmith’s business intelligence enables organisations to plan, execute, settle and analyse pricing programs to ultimately increase their revenue and profitability. The Blacksmith platform processes more than USD4 billion in trade spend on behalf of customers every year.
According to Gartner Inc. research, CPG manufacturers spend upward of 25% of revenue on trade promotions, and the complexity of managing this spend continues to increase. Historically, homegrown systems or spreadsheets were used to manage these trade spend decisions. As the volume of transactions has grown, these systems have not scaled and do not adequately provide key constituents – sales, finance, marketing, IT – with insights into trends, opportunities and emerging areas of risk. Trade promotion management is a mission critical capability for CPG companies.
“Over its 16-year history, Blacksmith has developed a unique solution for managing complex promotional transactions, making it a valued partner to its world-class customer base,” says Strattam Capital CEO Bob Morse. “We see enormous potential in Blacksmith and are thrilled to partner with Paul and his team to expand the company’s product offerings and execute on the next phase of its growth.”
