Bigfoot’s Payoff

I’ve brogged a bit about Bigfoot Interactive in the past.  And I am going to do it one more time, spurred on by the announcement that Bigfoot is merging with Alliance Data Systems’ Epsilon business unit in a $120mm transaction announced today.

Bigfoot_logo_1

And the reason I am doing this is because I am incredibly proud of this deal for a bunch of reasons.

First and foremost, its a lesson in tenacity and the value of sticking with an investment and doing what you have to do to get it right.

Second, the management team at Bigfoot, led by Al DiGuido, has pulled off some amazing accomplishments over the past five years that I have worked with them. They are a first class group and I am very fortunate to have had the pleasure of working with them.

And third, everyone told me that we were nuts to put money into Bigfoot after we acquired it from the former management team.  It was 2001 and nobody believed in anything.  But Al did and I did and the team did and that’s really all that matters.  If you spend your life worrying about what others think, you’ll never do anything important.

Here’s what I wrote about Bigfoot in a prior post:

Al took over a company called Favemail
that had a failed business, migrated the company into the ESP market,
changed the name to Expression Engines, and then with the help of the
investors in Expression Engines, purchased the failing ESP called
Bigfoot Interactive, kept the Bigfoot Interactive name and immediately
was faced with stemming huge losses resulting from a collapsing market
for email in the middle of 2001.

But Al and his team had a vision. That vision was to create a
technology platform that could service the ASP and Agency models at the
same time and also satisfy companies that wanted a hybrid of both. They
wanted to combine that platform with technology integration services
and marketing services to build a full-blown email services solution.

It took three years to realize fully that vision, but they’ve done it.

They sure have done it.  And they built an incredibly profitable business that at a purchase price of 4x revenues is going to be accretive to the buyer.  That was one hell of a turnaround they pulled off.

I also want to thank the other investors in Bigfoot; Hudson Ventures, Mitsui, Grey/WPP, HPJ, Investcorp, and a number of others who were incredibly supportive during some very difficult times. Investor groups that hang together are a great thing.  I also want to put in a plug for the guys at Petsky Prunier, particularly Mike and Sanjay, who worked tirelessly to get this deal done.

So that’s my brog on Bigfoot Interactive.  It’s time for me to move on from this one and do some more deals. But I learned a lot on this deal and a lot from Al and his team.  I come away from this one as a better investor and that is more valuable than all the money that was made on this deal.