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Chartwell Advises PenLink on Sale to Spire Capital

March 2022

Chartwell is pleased to announce the recapitalization of Pen-Link, Inc. with Spire Capital Partners in partnership with management. With Spire’s deep sector expertise and network of relationships, this partnership positions PenLink (the “Company”) to further enhance its solution offerings, customer support capabilities, and accelerate growth domestically and internationally. Chartwell served as the exclusive financial advisor to the Company and the Special Committee of its Board of Directors, providing comprehensive, unbiased counsel focused on ensuring an optimal outcome for all parties, including its Employee Stock Ownership Plan (ESOP) and management shareholders, as well as other stakeholders such as customers, industry partners, and employees.

“As a leading private equity investor in govtech and technology-enabled companies, with an exceptional track record of partnering with management teams to build category leaders, Spire Capital is an ideal partner for PenLink,” said Kevin Pope, PenLink’s CEO. “Their demonstrated success over 20 years of investing in middle market companies, deep expertise in both software and law enforcement, and the value-added resources they bring uniquely position them to help PenLink deliver even greater value to our customers, accelerate our growth, and execute on acquisitions.”

“PenLink’s breadth and depth of solution offerings and unmatched customer support creates truly differentiated services for law enforcement officers who are protecting our country,” said Sean White, Partner at Spire Capital. “Kevin and the team have done an incredible job growing the Company, expanding beyond traditional telephonic communication analysis to the cutting edge of social media data analysis. Spire Capital looks forward to assisting management in executing on their vision for the Company.”

Based in Lincoln, Nebraska, PenLink is a leading global provider of state-of-the-art, judicially mandated communication collection and analysis solutions for law enforcement. The Company leverages the passionate support for law enforcement across its employee base to develop and market an industry-standard setting suite of capabilities for local, state, federal, and international crime fighting agencies to conduct judicially authorized wiretaps and collect, store, analyze, and create actionable insights from communication datasets that commonly exceed billions of individual records and interactions.

PenLink originally formed an ESOP in 2007 to reward and incentivize its employees for their continued dedication to growing the Company. Over the subsequent 15 years, PenLink, guided by Mr. Pope and his best-in-class management team, has grown into one of the largest communication collection and analysis providers in the fast-growing law enforcement software market.

Following a review of strategic alternatives led by Chartwell and the Special Committee, the Company elected to proceed with a sale transaction.  In executing the transaction, Chartwell leveraged its in-depth expertise in ESOPs and M&A transactions to create differentiated positioning of the business, leading to a vibrant market for PenLink and ultimately a successful transaction that enabled the ESOP, management, and shareholders to recognize an impressive premium over prior expectations.

We are extremely pleased with the outcome realized by Chartwell for the benefit of our employees through the ESOP. While we considered many firms to advise us in this process, Chartwell’s unique positioning of PenLink, unrivaled M&A and ESOP experience, and guidance through a comprehensive marketing process resulted in the best possible outcome, and Chartwell more than delivered on every commitment they made to us. Chartwell’s team is personally invested in our success and fought for us at every step – no way we could have achieved this tremendous result without them.”

Kevin Pope, Chief Executive Officer, PenLink

We have been continually impressed by Chartwell’s M&A expertise, ability to navigate around the complexities of an ESOP in a broad marketing process, and support for the management team in all facets of this process. As the most experienced advisors to ESOP-owned companies exploring a sale, Chartwell provided valuable insights that resulted in a superior outcome to that which would likely have been attained by other advisors.  In doing so, Chartwell navigated a number of complex financial issues while also creating in-depth analyses to help management portray their vision of the Company and its future, which culminated in a premium result for our employees.”

Pat Severson, Chief Financial Officer, PenLink

Founded in 1986, PenLink is a leading global provider of state-of-the-art communication collection and analysis solutions for law enforcement. The Company offers a deep suite of software solutions which allows law enforcement, ranging from state and local, federal, and international, to analyze massive amounts of data and create actionable insights. PenLink’s solutions are mission-critical to law enforcement, allowing them to conduct communication-based investigations and create the insights which support their ongoing missions. The Company is based in Lincoln, Nebraska.

About Spire Capital Partners

Spire Capital is a private equity firm with an investment focus in small market companies within the technology-enabled business services, media, communications, and education sectors. Spire Capital is a New York-based investment advisor founded on the principle of partnering with management teams and founders to help effectuate the next stage of growth for their companies. Spire professionals have a broad array of past operating, investing, and advisory experiences they leverage to help portfolio companies accelerate growth, guide strategic direction, and execute their business plan.

Chartwell Contact

For additional information on this transaction and to learn more about Chartwell’s corporate finance capabilities, please contact Greg Fresh.

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