Riverside Partners-backed label software developer Loftware makes first acquisition

Loftware Inc., which develops software that manages product labeling for a wide range of client companies from FedEx to Johnson & Johnson, has acquired a developer of SaaS software for handling artwork used in product packaging. Loftware is a portfolio company of Riverside Partners, which first invested in the Portsmouth, New Hampshire, company back in 2014.

Gap Systems, based in Leeds, England, provides cloud-based software aimed at helping enterprises, including customers Bic and Jergens, manage artwork created and developed for product packaging. The Gap Systems deal is the first acquisition made by Loftware.

"Our investment thesis for Loftware anticipated growth both organically and through selective strategic acquisitions to extend its leadership position in enterprise labeling,” says David Belluck, general partner at Riverside Partners, a middle-market PE firm headquartered in Boston. Loftware’s organic growth since the Riverside acquisition has included a global push for customers, opening new offices in Germany and Singapore. The company has more than 5,000 customers in 100 countries.

Loftware produces barcode labels, radio frequency ID tags and documents tracking and identifying products all through the supply chain. Its software aggregates information needed for packaging labels by integrating with its clients’ SAP, Oracle and other enterprise applications. Loftware’s customer list includes 3M, Abbott, FedEx, Gap, GE, Harley-Davidson, Johnson & Johnson, NCR, P&G, Serta, Simmons Bedding, Toyota and Velcro.

Gap Systems controls packaging artwork processes throughout the product lifecycle, featuring its Smartflow software. Its clients include Bic, Jergens, Kingfisher, Nisbets and Peroni. Combined, Loftware and Gap will be able to offer labeling and packaging software for a range of industries, focusing on pharmaceutical, medical device, manufacturing, food and beverage, chemical, retail, and consumer packaged goods sectors. The combined platform will be pitched as enabling customers to improve time to market, mitigate risk, reduce supply chain complexity, optimize costs and increase agility.

"Loftware and Gap offer truly complementary solutions that the market needs, especially as companies look to standardize on a single platform that can create, manage and print labels and packaging artwork across worldwide operations," says Paul Goldberg, Gap Systems CEO. "Now internal and external stakeholders in packaging, regulatory, quality, operations, manufacturing, supply chain and marketing can address a more extensive set of requirements."

Fueled by the rise of mass consumer markets all over the world, companies that produce packaging and labeling have become attractive acquisition targets for both private equity and strategic buyers. Some recent deals include: With backing from First Atlantic Capital PE firm, Resource Label Group purchased a labeling and packaging service provider called Gintzler International. Platinum Equity acquired WS Packaging Group Inc., which provides label and packaging services to consumer product manufacturers. And PE firm Apax Partners acquired Tosca Services, which provides food-related packaging materials.