Rimini Street adds $125 million to coffers via strategic debt deal
Rimini Street, a third-party maintenance provider for SAP and Oracle applications, has added $125 million to its war chest, as it aims to globally expand and scale its business.
CEO Seth Ravin said in an interview that the company raised $125 million in debt financing from a syndicate led by New York-based Colbeck Capital Management.
The sum is notable for a few reasons. First, Rimini Street is raising debt instead of equity. Before the Colbeck deal, Rimini raised $12.5 million in venture capital and had a $15 million line of credit that was paid off in early June. In addition, Oracle was awarded $50 million in damages against Rimini. Ravin, however, noted that Rimini is awaiting the judge's final ruling and then there will be appeals.
Also: Oracle vs. Rimini Street: Third party maintenance blueprint far from set | Q&A: Rimini Street CEO Seth Ravin | Rimini Street moves to support SAP HANA
Add it up -- and the $125 million means that Rimini can pay off Oracle in the worst-case scenario and still have $75 million to fund the business. Ravin noted that Rimini has passed through the $160 million in annual revenue run-rate mark and has good visibility into cash flow. "We've always grown from the ground up with our own cash flow to fund our growth," said Ravin. "Now we have an opportunity to see a tremendous acceleration of the business."
Ravin said the plan is to put much of Rimini's new funding to work on global expansion. About 30 percent of Rimini's business is international, but Ravin said the revenue split could ultimately be 50-50 between the US and rest of the world.
"The first 10 years were spent on operations, figuring out the product, and how to market and sell it. We passed the 1,000-client mark," said Ravin. "Now we're in the scaling phase and the challenge is getting from 1,400 clients to 4,000 and 800 employees to 3,000 or 4,000."
Does the funding mean Rimini is closer to an initial public offering? Ravin said the company will go public in due course. "It will be a purely strategic event. Some need to do it to raise money. We want to be public because it's a vote of confidence. We are a mission critical supplier to large enterprises and being a public company is one more way to provide confidence," said Ravin.
I asked Ravin how Brexit and the turmoil in the UK and European Union could affect his international growth plans. Ravin wasn't worried. "You have to look at our business. We do well when the economy is good and really well when there is uncertainty," explained Ravin. "There is never enough funding, even in good days, and there's always a shortage of money and resources. With Brexit, there will be a holding pattern, and companies will extend the value of their assets and decide to push off major projects."
In that environment, Rimini Street, which has been fueled by companies squeaking out more value from legacy enterprise applications, fares well, said Ravin. "Brexit is good news on the business side, but it's tough for our colleagues in the UK," said Ravin.
More on Brexit: Brexit spells turbulence for cloud computing: 6 stormy scenarios |