Inscape Publishing goes global
with purchase of Denmark firm,
its best performer in Europe
Backed by a New York leveraged buyout firm, Inscape Publishing in Minneapolis has established a foothold in Europe with its first acquisition, of Discover AS in Denmark.
Inscape was spun off from the Carlson Cos. empire several years ago. It’s famous for DISC training materials, which assess employees and categorize them as one of four personality types. Jeffrey Sugerman, CEO, saw growth opportunities abroad.
“We had been facing a fairly stagnant — in fact, declining — market in training and development solutions, post-2001,” he says. “The dynamics of Europe are a bit different. Per-capita training in the workforce is 50 to 100 percent higher in Europe than in the United States.”
Inscape, with 30 employees in Minneapolis, had business in Europe through licensing. Its largest distribution partner there was Discover, whose success with DISC products captured Sugerman’s attention. “They were doing better than we were,” Sugerman says.
Discover was taking a certification approach, in effect developing DISC customers through certification of trainers, “similar to what Microsoft might do in certifying engineers and training them, and creating end-users,” he says.
Sugerman says the big risk in a global acquisition is managing from far away: “I guess the distance is real. Even with phone and Internet and everything else to make that a non-issue, it’s still a real issue.”
Sugerman’s tactics include setting up a separate holding company in Europe that owns the acquired company and its Swedish operations. Sugerman is chairman of the board of the holding company, and the directors manage the new company at arm’s length.
The majority owner of Inscape is The Riverside Co., a private equity firm. “They originally bought Inscape as a platform company in the HR training area, with a clear commitment to make add-on acquisitions,” Sugerman says. “We funded this acquisition and the working capital with two-thirds equity and one-third debt from a Danish bank.” Cost was under $5 million.
Riverside brought Sugerman in after his stint with PointCloud, a dot-com that folded. He was PointCloud’s CEO, who in his young 40s came in with money and management expertise to aid the 20-something founders. “I was the grandpa,” Sugerman says.
He’s used to working for venture firms, and has money in the Inscape deal, he says. “This will be part of our growth engine for the future.”
Jeffrey Sugerman, Inscape Publishing: 763.765.2265; jsugerman@inscapepublishing.com
