The Riverside Co. Acquires DTI

By: Jim Rosenberg The Riverside Co. private equity investment firm has acquired Digital Technology International, the Springville, Utah, developer of newspaper publishing software.

Since it was founded in 1981, DTI has been a subsidiary of family-owned Oldham Associates LLC, which also ran a commercial printing business. As several family members neared retirement, it was decided to separate the companies. Riverside approached the family at about the same time, having identified DTI as a profitable company in a growth position.

Oldham family members are among the several DTI managers who joined in the investment, according to Marketing Director Alyson O. Williams.

Announcing the deal, DTI stated, "the opportunity presented by Riverside coincided with the desire of the remaining family members to continue providing leading solutions to news content providers, but to more aggressively expand their capacity to do so."

"With our significant financial resources, we look to continue to grow the business," Riverside co-CEO Stewart Kohl said, "as we explore potential add-on candidates to further bolster DTI's growth." DTI said the acquisition will not stall its development plans.

Williams said DTI was financially healthy and not in the position of competitors that have been taken over and merged with others in recent years. "They're not just trying to buy some companies that are in trouble," she said.

Emphasizing that Riverside is an equity investor, not a turn-around or venture-capital firm, Instead, Williams said Riverside looks at DTI as "a platform company" on which it can build with the same management supporting development of the same product line.

Founder and CEO Don Oldham "is very aware of the graveyard in this industry," Williams said, adding that management wants to grow under Riverside in areas where it doesn't have a lot of history, such as business systems and its recent move into Web publishing.

"Our latest technology, the Liquid Media, ...is a platform technology" capable of supporting different parts of publishing, including disparate systems from other vendors.

Though not officially notified of the transaction until after its June 1 completion, DTI users may find out more about Riverside and plans for DTI at their user-group meeting in Provo, Utah, later this month.

At the St. Petersburg Times, which is winding up a pagination project and was the first U.S. installation for DTI's WebSpeed (E&P, Feb, 2006), "we're in a wait-and-see posture," said Janet Woods, who has led the pagination project. Making all content available for print and online delivery, WebSpeed is a major Liquid Media component.

Though DTI's future "is a concern for us right now," Woods expressed confidence in the company, remarking that "it says a lot" that DTI's principals are still involved. For work on the Times' project, she said, "we are in very frequent conversation" with DTI. Absolutely nothing has changed in that regard."

Don Oldham continues to lead the company, Geoff Walker remains vice president and chief financial officer, and Jeff Carpenter stays on as chief operating officer. Vice Chairman Levor Oldham announced his retirement but remains a part-time consultant.

All other managers and personnel remain, with several advancing to new positions. Senior Engineer Byron Oldham was promoted to product development vice president, Regional Sales Manager Ed Hubbard was named sales vice president, and David Oldham was appointed to the newly created position of marketing and product management vice president.

Riverside "supports our mission to continue innovating and developing" publishing software, Don Oldham said in a statement, adding that "DTI is essentially the same team of people...."

With the change, however, comes a new board of directors. Don Oldham, CEO, remains a key investor member of the board. Riverside partner Stuart Baxter, head of Riverside's Software team, and Riverside Vice President Matt Dailey also will serve as directors, "guiding growth and acquisitions." Lib Gibson, who launched The Globe and Mail's Internet properties, brings newspaper-specific experience to the board. The final board member named, Richard Currier, has 30 years' experience in marketing and management of technology companies.

Specializing in companies with enterprise values of less than $100 million, Riverside partners with management teams to build through acquisition and value-added growth. Since 1988, it has invested in 130 transactions with a total value of $2.1 billion, sales of $2.4 billion, EBITDA of $263 million and more than 11,000 employees. Its portfolio in the U.S. and Europe numbers 46. The firm manages $1.4 billion in capital in six funds and staffs 10 offices, from San Francisco to Warsaw.

DTI has customers across the Americas and in Europe and maintains offices in the United Kingdom, Germany, Scandinavia, Mexico, and Panama. At Nexpo in April, Cox Newspapers, one of DTI's largest customers and development partners, announced all 17 of its dailies will adopt DTI WebSpeed, which relies on technology from Norway's Escenic.

In the U.S., DTI's most recent customer, the St. Joseph (Mo.) News-Press, signed for NewsSpeed 6 editorial pagination and archive, which will replace what may have been the only METS system used in this country and a Stauffer text archive. DTI SpeedWriter, using Adobe InCopy CS2, and PageSpeed, using Adobe InDesign CS2, replace METS's Microsoft Word and QuarkXPress, respectively.

A Cache post-relational database stores all NewsSpeed text, images, and pages for subsequent distribution to various media. NewsSpeed will enable editors to track the progress of stories and pages.

PlanSpeed software for editorial and display advertising planning and pagination will interface with the News-Press' display ad system to pull ads into DTI's pagination system.