Quark, developer of the desktop publishing software QuarkXPress, has been acquired by
Platinum Equity, a Los Angeles merger and acquisition company, for an undisclosed sum.
Quark, which is privately held, was previously owned by the Ebrahimi family, which bought it from founder Tim Gill in 2000. On August 1, the children of Farhad (Fred) Ebrahimi, who retired in 2005, completed a transaction in which they sold all of their Quark shares for cash, and handed over control of the company to Platinum Equity.
Quark said the purpose of this transaction is to strengthen the company and give it the flexibility and financial facility to fulfill its goal of becoming a category leader in the realm of dynamic and digital publishing.
“Our interest is to have financial backers that can…help us focus on our core markets, and more specifically, to create an acquisition strategy that’s focused on helping us expand the breadth and depth of our product capabilities and our geographic coverage,” said Quark President and CEO Raymond Schiavone. “Being family-owned, there are certain constraints, so we sought to find a partner that could help us execute our strategy. We found a fantastic partner [that is] expert in mergers and acquisitions and operations, so this gives us some capabilities that we didn’t have with the prior ownership.”
This transaction is good news for Quark, according to Thad McIlroy, an electronic publishing consultant, analyst and author, and principal of
The Future of Publishing, based in Vancouver, British Columbia. “I knew that the [Quark executives] were highly skilled and capable of taking Quark in a new direction, and yet Quark did not move in a new direction. The product developed in interesting ways, but they weren’t being very aggressive in the marketplace…so they decided to start shopping the company around to get some new blood and new financing, and they succeeded at doing that. That’s a major coup these days—to sell a publishing tools company. It’s not the hottest sector in the universe.”
Founded in 1995, Platinum Equity has closed over 115 acquisitions and has over $30 billion in combined annual revenue across acquisitions at the point of acquisition, according to its website. Its portfolio includes a diverse array of companies, acquired via corporate divestitures, public-to-private transactions, and transactions with private sellers. It is now involved with companies spanning the entertainment, industrial, IT services and software, manufacturing, media and telecommunications, and logistics and distribution categories.
“Quark is a legendary brand that helped create the desktop publishing market and is now helping organizations transform how they publish content both to print and digital media,” said Brian Wall, partner at Platinum, in a statement. “Quark is committed to its loyal and dedicated user base and we are enthusiastic about the company’s new products, which are gaining traction and generating positive reviews. We believe that with their expertise and innovative software, Quark has the potential to revolutionize publishing again.”
With this transaction, Quark is positioning itself to offer what it calls an end-to-end solution in dynamic publishing—from content creation to delivery to syndication. It sees Platinum Equity as a means to help it acquire the right mix of technologies in strategic acquisitions to make that happen. “The dynamic publishing market is fragmented today,” said Schiavone. “There’s a number of companies that do very specific things. We want to be the company that can provide the end-to-end solution and be the market leader.”
From the point of view of the industry as a whole, the Platinum Equity buyout makes sense, says McIlroy. “This is agnostic capital—money in search of an opportunity, so it is a great endorsement of Quark and its approach, and of Quark’s future plans and longevity. This says to us that Quark’s going to be around for some time, that they’re going to be a player in the publishing tools space.”
What about Adobe?
The elephant in the room is Quark’s arch-rival, Adobe. From Quark’s perspective, however, Adobe is tangential to its current publishing ambitions. Unlike Adobe, Quark does not have its eye on other creation tools or Web analytics, specialties that Adobe has been developing over time. Instead, Quark plans to concentrate on traditional markets such as newspapers and magazines, as well as financial services, life sciences, government, and manufacturing to provide those customers with the capability to automate their publishing processes.
“We do compete with Adobe, but there are some differences,” said Schiavone. “All we do is publishing…We want to solve the publishing problem both for traditional publishers as well as large enterprises. So we want to provide graphic designers and the folks creating print content today with the tools to participate in the digital age. There’s spots that will overlap [with Adobe], but we’ll be expanding into places that Adobe is not deeply into.”
Thad McIllroy agrees. “The good news is that Quark is wonderfully positioned between the consumer publishing market and the high-end publishing market. They understand the consumer and cross media publishing space…and inasmuch as opportunities become available, Quark is well positioned to take advantage of them.”
Digital publishing strategy
As part of its
digital publishing 2.0 strategy, Quark seeks to compete not only in the realm of print and online publishing, but also in digital publishing of rich, interactive content to a variety of mobile devices in multiple formats.
Earlier this year, Quark released
QuarkXPress 9, which updated the company’s desktop publishing package and introduced a mobile component for the iOS and other platforms. Integration of the new App Studio into the package, which will be available soon with the release of QuarkXPress 9.1, will allow designers to publish directly to digital devices, notably the iPad and eventually other tablets, as well as to e-readers, smart phones, and other cross-media systems.
In choosing Platinum Equity as a partner, Quark seeks to maintain its independence and to eliminate questions about its customer relations and its ability to make decisions. “We continue to operate exactly as we did before the acquisition, continue to support our clients, and we’re a separate standalone business just as we were before—same people, same name,” Schiavone said.