Softbank investment helps brings Rebar HQ to Superior

SUPERIOR — The first cash outlay of a newly arrived venture firm has gone to MessageMedia, a Superior-based e-mail marketing company.

Rebar Inc., which moved its headquarters in December from Norwood, Mass. to the same Superior building where Softbank Venture Capital also is officed, joined Softbank and Pequot Private Equity in providing $11 million to MessageMedia. Rebar and Softbank’s Hotbank incubator are in the office building also housing Superior Liquor Market and Old Chicago’s restaurant on McCaslin Boulevard.

Softbank made its own $38.5 million equity investment in Rebar in September, becoming a strategic partner and landing Softbank General Partner Brad Feld a seat on Rebar’s board of directors. Softbank owns a minority interest in Rebar, worth less than 25 percent, said Howard Diamond, Rebar’s chief executive officer and president. More than 50 percent of the company is owned by management.

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Rebar is a private umbrella company consisting of $1.1 billion Corporate Software, a global software-services company; Rebar Foundry, a technology-domain incubator; Shaman Corp., a software firm; and nine start-ups owned by Rebar.

The MessageMedia investment represents a minority interest for Rebar, Diamond said. Rebar has 14 merger and acquisition deals in the works, he said, with one deal involving a Colorado company to be completed around March 12.

Corporate Software and Rebar Foundry are located in Norwood, Mass., near Boston. Shaman Corp. is based in San Francisco.

Corporate Software handles software leases for multinational companies with large numbers of desktops. Shaman serves the same function for small- to mid-sized companies with 50 to 1,500 desktops.

Diamond relocated Rebar’s headquarters to Superior, in part, because the company has been working closely with Feld, who works out of Softbank’s new Hotbank incubator in Superior, the same building into which Rebar moved.

“It’s also a great area for recruiting for technology talent as opposed to Boston and San Francisco, where it’s expensive and highly competitive,” Diamond said.

Diamond and Feld met in Boston a few years ago, Feld said, while both were serving on the board of Abuzz, a discussion and information Web-site company acquired by New York Times Digital Media. They have worked together on a handful of investments. Feld said Rebar’s presence in Softbank’s building works symbiotically. The two companies will share incubation duties for new companies, and each company’s executives can provide high-level expertise to the new companies and to each other.

Feld said Softbank invested in Rebar because of its core business, Corporate Software, which he said is doing great after 15 years and has weathered 20 market cycles. Thus, Rebar ? and specifically, Corporate Software ? should have no problem enduring the current downtown among technology companies, he said.

“It (Corporate Software) is profitable. It’s kicking off cash. I think it’s something we’ll be able to leverage,” Feld said. “It’s culturally oriented to making money, which is what technology companies need to do now ? to make a profit, not just revenues.

“Now is a great time to be an acquirer because values are so beaten down,” Feld said, adding that his group will be able to acquire good technology companies that have nowhere to go.

Rebar was created in November 1999 to buy Corporate Software, where Diamond had been chief executive officer since 1996. The company took on financing to process the deal, and paid it off in nine weeks, Diamond said. The company is now owned free and clear of debt, he said.

Rebar has offices in 14 countries with 1,600 employees, about 475 of them in sales staff, Diamond said. Diamond declined to give revenues for the privately held Rebar.

Contact Alisha Jeter Rhines at research@bcbr.com or (303) 440-4950.