Climb Global Solutions, Inc. Acquires Douglas Stewart Software & Services, LLC, Expanding Reach in North America and Strengthening Education Sector Offerings

Rhea-AI Summary

Climb Global Solutions, Inc. (NASDAQ:CLMB) has acquired Douglas Stewart Software & Services, (DSS) for $20.3 million, with a potential post-closing earn-out. This acquisition strengthens Climb's presence in North America and enhances its offerings in the education sector. DSS, a Wisconsin-based specialty distributor, focuses on SaaS solutions for education customers and reported an adjusted EBITDA of $5.3 million for the trailing twelve months ending June 30, 2024, up 10% year-over-year.

The acquisition brings 20 new vendor partners to Climb, including Adobe, Go Guardian, and Incident IQ. DSS serves over 500 value-added resellers and 250 campus stores across North America in both K-12 and higher education markets. The integration is expected to unlock synergies, cross-selling opportunities, and advance shared cloud marketplace initiatives.

Positive

• Acquisition expands Climb's presence in North America and strengthens its education sector offerings
• DSS reported adjusted EBITDA of $5.3 million, up 10% year-over-year
• Addition of 20 new vendor partners including Adobe, Go Guardian, and Incident IQ
• DSS has an 85%+ retention rate for strategic vendor partners' offerings
• Potential for synergies and cross-selling opportunities between Climb and DSS

Negative

• Significant cash outlay of $20.3 million from Climb's balance sheet for the acquisition
• Potential integration challenges and costs associated with merging DSS into Climb's platform

Insights

Financial Analyst

The acquisition of DSS by Climb Global Solutions is a strategic move with significant financial implications. The $20.3 million purchase price, funded from Climb's balance sheet, demonstrates the company's strong liquidity position. DSS's reported adjusted EBITDA of $5.3 million for the trailing twelve months, with a 10% year-over-year growth, suggests a reasonable valuation multiple and potential for quick ROI. The 85%+ retention rate for DSS's strategic vendor partners indicates a stable revenue stream, which could positively impact Climb's financial stability and growth prospects. However, investors should monitor the integration process and potential synergies realization to gauge the actual financial impact on Climb's future performance.

EdTech Specialist

This acquisition marks a significant expansion for Climb in the education technology sector. By integrating DSS, Climb gains access to a robust network of 500+ value-added resellers and 250 campus stores across North America, spanning both K-12 and higher education markets. The addition of key vendor partners like Adobe, Go Guardian and Incident IQ enhances Climb's product portfolio substantially. The focus on SaaS solutions aligns with the growing trend of cloud-based educational tools. This move positions Climb to capitalize on the increasing demand for digital learning solutions, potentially leading to new growth opportunities in the EdTech space.

Market Research Analyst

The acquisition of DSS by Climb Global Solutions represents a strategic market expansion in the IT channel industry. By strengthening its position in the education sector, Climb is diversifying its revenue streams and reducing market risks. The deal also provides cross-selling opportunities and potential synergies between the two companies' customer bases. The emphasis on subscription-based software licensing models aligns with current market trends towards recurring revenue models. However, investors should be aware of potential integration challenges and the need for effective execution to fully realize the benefits of this acquisition. Overall, this move could enhance Climb's competitive position in the North American IT distribution landscape.

EATONTOWN, N.J., Aug. 07, 2024 (GLOBE NEWSWIRE) -- Climb Global Solutions, Inc. (NASDAQ:CLMB), a value-added global IT channel company specializing in unique sales and distribution solutions for innovative technology vendors, announced it is acquiring Douglas Stewart Software & Services, LLC (“DSS”), a separate division of the privately held Douglas Stewart Company. DSS is a Wisconsin-based, leading specialty distributor focused on SaaS solutions for education customers in North America. The acquisition enhances Climb’s presence in the region and bolsters its product portfolio.

Climb closed on the acquisition of DSS for an aggregate purchase price of $20.3 million payable at closing (subject to working capital and other adjustments), plus a potential post-closing earn-out. Climb funded the acquisition of DSS utilizing cash from the company’s balance sheet. For the trailing twelve months, ending June 30, 2024, DSS reported adjusted EBITDA of approximately $5.3 million, which was up 10% over the same period in the prior year.

“Today, we are continuing with our organic growth by adding scale and expertise to our North American operations along with 20 new vendor partners including Adobe, Go Guardian and Incident IQ. DSS has delivered consistent growth through a subscription-based software licensing model, built on an 85%+ retention rate for its strategic vendor partners’ offerings,” said Climb CEO, Dale Foster. “DSS is a proven leader in the EdTech channel and provides services to more than 500 value-added resellers and 250 campus stores across NA in both the K-12 and higher education markets. We are pleased to welcome Chuck Hulan and his team to the Climb family and look forward to unlocking synergies and cross-selling opportunities while advancing shared cloud marketplace initiatives as we integrate DSS into our platform in the months ahead.”

Commenting on the acquisition, DSS CEO Chuck Hulan stated: “DSS is dedicated to empowering the education community with solutions that improve learning experiences for all students. Leveraging the software-centric infrastructure Dale and his team have built at Climb, we look forward to being able to rapidly innovate on the types of solutions and services we can provide to Climb’s vendors and bring new customers to our existing supplier partners too. We will bring education-specific customer analysis and targeting to applicable Climb vendors to help extend and expand their business, while enabling us to reach a broader audience and deliver additional resources to best serve the education market.”  

Those interested in distribution services and solutions should contact Climb by phone at +1.800.847.7078 (US), or +1.888.523.7777 (Canada), or by email at Sales@ClimbCS.com.

About Climb Channel Solutions and Climb Global Solutions

Climb Channel Solutions is a global specialty technology distributor focusing on Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & Application Lifecycle. What sets Climb apart is our commitment to transform distribution by providing emerging and established IT technologies, flexible financing, real-time quoting, best of breed channel operations, speed to market, and exceptional service to our partners worldwide. Climb Channel Solutions is a wholly owned subsidiary of Climb Global Solutions (NASDAQ: CLMB). Experience the Climb difference and learn how our people-first approach empowers VARs and MSPs to grow, scale, and accelerate their business. Visit www.ClimbCS.com, call 1-800-847-7078, and connect with us on LinkedIn!

For Media & PR inquiries contact:
Climb Channel Solutions
Media Relations
media@ClimbCS.com

Investor Relations Contact:
Elevate IR
Sean Mansouri, CFA
T: 720-330-2829
CLMB@elevate-ir.com

About Douglas Stewart Software Services, LLC

DSS is a trusted expert in educational technology, spanning back over 37 years. With decades of experience and a commitment to innovation, DSS continues to lead the way in delivering cutting-edge solutions to empower educators and enhance learning experiences. DSS stands at the forefront of education technology distribution in North America.

Operating as a dynamic business unit of the Douglas Stewart Company, where education has been a focus since 1950, DSS works with top-tier Edtech providers to deliver solutions to K-12, Higher Ed, & Non-Profits through 800+ reseller partners. DSS was established in 2021 to cater to the distinct requirements of software subscription licensing (Software as a Service/SaaS) in North America.

FAQ

What company did Climb Global Solutions (CLMB) acquire?

Climb Global Solutions (NASDAQ:CLMB) acquired Douglas Stewart Software & Services, (DSS), a Wisconsin-based specialty distributor focused on SaaS solutions for education customers in North America.

How much did Climb Global Solutions (CLMB) pay for the acquisition of DSS?

Climb Global Solutions paid $20.3 million at closing for the acquisition of DSS, subject to working capital and other adjustments, plus a potential post-closing earn-out.

What was DSS's adjusted EBITDA for the trailing twelve months ending June 30, 2024?

DSS reported an adjusted EBITDA of approximately $5.3 million for the trailing twelve months ending June 30, 2024, which was up 10% over the same period in the prior year.

How many new vendor partners does Climb Global Solutions (CLMB) gain from the DSS acquisition?

The acquisition of DSS brings 20 new vendor partners to Climb Global Solutions, including Adobe, Go Guardian, and Incident IQ.

What markets does DSS serve in the education sector?

DSS serves both K-12 and higher education markets, providing services to more than 500 value-added resellers and 250 campus stores across North America.