CARY — Software company Dude Solutions plans to hire up to 100 employees this year, a nearly 50 percent expansion, after receiving an investment commitment of up to $100 million from giant private equity firm Warburg Pincus.
In addition to stoking its organic growth, the 220-employee company also hopes to use its first-ever infusion of outside capital for acquisitions.
“When you look out over five years, our goal is to triple the size of the company” by adding 400 to 500 employees during that span, said CEO Kent Hudson, who co-founded the Cary company in 1999 along with Lee Prevost.
Dude Solutions’ flagship business is SchoolDude, which offers 25 software applications over the Internet – a business model called software-as-a-service – that help school districts and universities manage their facilities and information technology operations. That includes functions such as streamlining and processing maintenance requests, tracing utility costs and managing inventories. A second business, FacilityDude, offers a similar suite of products to governments and health care institutions.
The company’s technology platform lends itself to expansion into other markets as well, Hudson said.
“We look at hundreds of opportunities a year. We can only invest in a few of them,” said Alex Berzofsky, managing director of Warburg, which is based in New York and manages more than $35 billion in assets. “Dude Solutions stood out in a number of ways.”
Among other things, Berzofsky cited a strong management team and “a great product.”
“They are the true market leader in what they do,” he said.
Warburg is acquiring a minority ownership stake in Dude Solutions with its investment. Dude Solutions initially is receiving $20 million, but Warburg has committed a total of $100 million to fund future growth.
“One reason we selected Warburg is they gave us a tremendous amount of flexibility,” Hudson said.
The company is looking to hire employees in sales, marketing and information technology this year. The vast majority of the up to 100 workers it plans to hire will be local. Today, about 200 of the company’s 220 employees are in Cary.
The privately held company’s revenue has been expanding “in the high teens” in recent years and last year totaled in the neighborhood of $35 million.
“We’re positive cash flow,” he added.
Dude Solutions’ Monday morning announcement of the Warburg investment and its expansion plans attracted a group of local dignitaries led by Gov. Pat McCrory – even though the company isn’t receiving any state or local incentives.
“This is exactly what we need in North Carolina and what we’re trying to encourage in North Carolina,” McCrory said.
Stephen Scott, president of Wake Technical Community College, said the school has been “a satisfied customer” of SchoolDude for seven or eight years.
“I will tell you, on our campus, SchoolDude has become the generic name for a work order,” Scott said. “When somebody needs a work order done, they say, ‘I’ve got to do a SchoolDude.’ ”
Hudson said that the company decided to accept its first outside money because it was faced with more growth opportunities than it had the capital to exploit on its own.
The question the executive team faced, he said, was: “Did we want to be good or great? ... We want to take our best shot at doing something great.”
Dude Solutions has more than 8,000 customers, including about one-third of the public schools nationwide. The average SchoolDude customer pays about $4,500 a year, although the price ranges from $500 a year – for a school in Alaska with 30 students – to $100,000 a year.
“I think the future is quite bright,” Berzofsky said. “They have a tremendous customer base that is quite happy with them and continues to use their products year after year ... I think there are a lot of new customers they are going to be adding.”