Bridgeline Digital, a Massachusetts-based technology firm that develops Web applications and software tools, has bought Elements Local, a San Luis Obispo-based software development company that builds online marketing tools for franchise companies.
Bridgeline acquired Elements Local for $2.5 million in a combination of cash and common stock.
As well, its three owners will have an opportunity to earn $1.3 million or $108,000 a quarter over a three-year period in a combination of cash and stock on condition that certain quarterly review results are met, according to a company news release. Jeremy LaDuque, chief executive officer of Elements Local, said he could not say whether the three would split this money or whether they would each have an opportunity to earn $1.3 million.
The nature of the acquisition was to bring us on long term and build out the franchise and larger dealer network division of Bridgeline, he noted.
Elements Local, which supports 3,200 franchisees on their software, including Pearl Vision, Sports Clips and MAACO, is on track to generate $2.1 million in annual revenue this year.
LaDuque said the merger with Bridgeline gives the company he co-founded the resources and advanced technology from Bridgeline to better serve its existing client base, as well as take on larger clients.
LaDuque will become senior vice president of franchise and large dealer networks at Bridgeline. Michael Boyer, chief operating officer, will also become a senior executive on the Bridgeline team.
In turn, Bridgeline will be able to accelerate its time to market into the franchise marketplace and strengthen its credibility and acceptance in the franchise marketplace, he said.
There are over 750,000 franchises in North America and over 200,000 large dealer networks, LaDuque said. We believe this market is vast, and from a Web platform perspective, we believe it is technologically underserved.
Elements Local is looking to more than double its Laurel Lane space to accommodate a growing staff. It plans to double the size of its team to 30 employees from 15 over the next year, LaDuque said.