DEDHAM, MA–Zebra Technologies Corporation announced Tuesday that it intends to acquire Reflexis Systems, Inc., a privately-held, leading provider of intelligent workforce management, execution, and communication solutions for organizations in the retail, food service, hospitality and banking industries.
Zebra expects to fund the $575 million purchase price with a combination of cash on hand along with fully committed financing available under its credit facility, Zebra Technologies said in a statement.
Dedham, MA-based Reflexis Systems was founded in 2001 by Mr. Palakurthi, who serves as the company’s CEO. With his team of co-founders, Mr. Palakurthi pioneered the category of Retail Execution Management solutions that enable companies to simplify store operations and execute labor operations and customer engagement strategies.
“We are pleased to join Zebra and help build its strong position in retail with our compelling, differentiated worker efficiency solution,” said Mr. Palakurthi. “Our team has built a market-leading platform and application that has scaled to accommodate rapid growth over the last three years. We look forward to applying our expertise in directing associate activity to more profitable execution for customers while helping provide greater meaning to an associate’s workday.”
Reflexis, a global market leader in retail task management and a recognized leader in workforce management, expands Zebra’s software portfolio. The Reflexis ONE™ intelligent work platform is used by hundreds of customers globally to achieve measurable improvements in customer engagement along with associate productivity and retention.
“The acquisition of Reflexis Systems fits squarely within our Enterprise Asset Intelligence vision of making every worker and asset at the edge connected, visible and fully optimized,” said Anders Gustafsson, Chief Executive Officer of Zebra Technologies. “Combining Reflexis’ market-leading platform with our complementary software offerings provides us the unique opportunity to unify the store associate experience and empower every front-line worker to execute the best next action. We are excited to welcome the Reflexis team to the Zebra family.”
Customers will benefit from the acquisition as Zebra continues to provide innovative solutions to retailers, complementing its current software offerings such as Zebra Prescriptive Analytics, Workforce Connect and SmartCount with Reflexis’ unique combination of workforce and task management. Together, Zebra and its partners will leverage these edge software assets to help customers – in retail and other key vertical markets – elevate the performance of their teams and businesses by fueling front-line workflows with richer and larger sets of real-time data, Zebra Technologies said in a statement.
A portfolio company of Great Hill Partners and Sageview Capital, Reflexis achieved sales of approximately $66 million in 2019, doubling over a 3-year period, with gross margin approximately 20 percentage points higher than Zebra. The scale, vertical market expertise, and go-to-market footprint of Zebra is expected to create substantial synergies.
Zebra will fund the $575 million purchase price with a combination of cash on hand along with fully committed financing available under its credit facility. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close by early in the fourth quarter of 2020. Zebra expects this transaction to have an immaterial impact to earnings in year one and to be increasingly accretive beyond year one as we scale the business.
Goodwin Procter LLP is acting as legal counsel to Reflexis. Kirkland & Ellis LLP is serving as legal counsel to Zebra.