How a Strategic Acquisition Championed Profitable Growth
When it comes to business growth, it’s often difficult for businesses to recognize when a competitor is stronger or more competitive. However, it’s admirable when that organization seizes the opportunity to improve itself fundamentally through an acquisition that can better suit their target audience.
In 2018, Carlyle completed a strategic minority investment in DiscoverOrg, a subscription sales and marketing intelligence solutions provider. Recognizing a complementary advantage, DiscoverOrg seized an opportunity to acquire software company Zoom Information and changed the name of the combined business to ZoomInfo. By identifying complementary products and features, the acquisition provided ZoomInfo’s customers with a robust platform and extended value in a record-breaking six months.
Due to the acquisition’s unique opportunity to propel the company forward, ZoomInfo completed its initial public offering in June 2020 and was the largest public debut by a software company in a decade. Additionally, it was the first technology IPO completed entirely virtually during the COVID-19 pandemic.
ZoomInfo’s commitment to continuous improvement
ZoomInfo provides a real-time, user-friendly database enabling lead generation, marketing and sales analytics for more than 15,000 small- and medium-sized businesses. Backed by a strong database and security framework, ZoomInfo better positions B2B organizations to engage with the right customers and boost overall return-on-investment.
Henry Schuck, founder and CEO of ZoomInfo, often tells his management team that the worst explanation is “that’s the way it’s always been done.” Schuck, who initially founded DiscoverOrg out of his law school dorm room in 2007 and bootstrapped it until 2014, works closely with the ZoomInfo team to build a culture driven by learning and improvement.
As Ashley Evans, a Principal on our Technology team, shared in lessons learned working with ZoomInfo, Schuck and team demonstrated a strong culture from the beginning by focusing on questions that identified risks to the business, instead of bolstering the company’s strengths. While continuous improvement is a common management principle, ZoomInfo aspires to make better a focus each day instead of a singular transformational milestone.
How ZoomInfo pushes the envelope for further growth
Through every step of the process, ZoomInfo focused on continuous improvement with a long-term growth mindset. The teams at ZoomInfo focus on challenging the traditional phrase, “what’s always been done,” which led to a successful IPO.
ZoomInfo practices these fundamentals:
- Relentless rigor around key performance indicators fuels the business. ZoomInfo’s sales team measures activity from the top to the bottom of the funnel – every activity from outbound dials to booked business is measured each day.
- ZoomInfo’s engineering team constantly listens to customers, prioritizes ways to make products more useful and integrates those capabilities into the tools.
- The finance team at ZoomInfo analyzes all business metrics, identifies trends and recommends optimizations based on learnings.
ZoomInfo’s culture to drive improvement through discipline and focus displays their commitment to grow in an ever-evolving business landscape.
Achieving the strategic acquisition with Carlyle
During Carlyle’s diligence on ZoomInfo, the team identified several levers for growth in the business. Following the initial investment, Carlyle worked closely with ZoomInfo and other partners at TA Associates and 22C Capital to prioritize these levers and support the company’s effort to build a detailed operational framework around the value creation plan.
ZoomInfo embraced Carlyle’s platform while continually challenging the team to provide expert perspectives and consistently exceeded the established targets. Once Carlyle identified the opportunity for the strategic acquisition, ZoomInfo and Carlyle worked together on an accelerated time frame to evaluate the target company and develop a new value creation plan with additional capital to complete the acquisition.
Carlyle believes these selected case studies should be considered as a reflection of Carlyle’s investment process, and references to these particular portfolio companies should not be considered a recommendation of any particular security, investment, or portfolio company. The information provided about these portfolio companies is intended to be illustrative, and is not intended to be used as an indication of the current or future performance of Carlyle’s portfolio companies. The investments described in the selected case studies were not made by any single fund or other product and do not represent all of the investments purchased or sold by any fund or other product. The information provided in these case studies is for informational purposes only and may not be relied on in any manner as advice or as an offer to sell or a solicitation of an offer to buy interests in any fund or other product sponsored or managed by Carlyle or its affiliates. Any such offer or solicitation shall only be made pursuant to a final confidential private placement memorandum, which will be furnished to qualified investors on a confidential basis at their request.