How'd The Carlyle Group find DIGIOP?

The Carlyle Group, which announced this week it bought DIGIOP, a video and data management software provider,  got to know the company through another company it owns, Supercircuits.

The Carlyle Group bought Supercircuits in 2006, and then invested another $10 m in the company in 2009. Here's a story from 2009 about that investment and about how Supercircuits is able to sell direct to the end user and to the channel.

Rich Mellott, president of DIGIOP, told me that The Carlyle Group got to know the DIGIOP product line because Supercircuits OEMed a product for SCBlack portfolio “and its was the highest volume product on the systems side of the house,” he said. “That's how we got involved and introduced to The Carlyle Group.”

And Supercircuits was at ISC West last year with the product. Here's a press release about that.

Mellott said although Supercircuits will sell to anyone, its primary focus is on the end user.

The Carlyle Group wanted to invest in a technology company that had a “channel focus,” he said, and it looked to DIGIOP for that.

Is there a potential conflict here? Mellott said no.

While Carlyle now owns both Supercircuits and DIGIOP, they're “separately owned businesses with separate business strategies.”

Mellot says that the solution it OEMs to Supercircuits is “very similarly configured to what we sell into the channel, but [the version for the channel] has additional features and options.”

“From our standpoint, our focus will be to cater to the dealer and integrator,” Mellot said. “We don't have the support structure to cater to the end user, they [Supercircuits] do.”

In addition, DIGIOP has higher level “Tier II and III solutions” it's developed  and the ability to work with integrated solutions. Plus, “a lot of dealers and integrators want to have a direct relationship with the manufacturer,” he said.

DIGIOP as founded in early 2000 and was owned by its original investors, who are based in Houston, until the Carlyle acquisition. “We now have more capital and capability to be able to invest and grow the business to a level that we've not had before,” Mellott said.

There will be a big marketing push, better logistics to make the products more readily available, a new sales force, and “resources to move the technology along in a quicker fashion.”

DIGIOP is also re-launching its Certified Integrator Partner program this spring.

The company will be at ISC West this year, in a suite in the Venetian. The deal was not finalized soon enough to get a prime spot on the show floor for 2011, Mellott said, but they'll be on the show floor proper in 2012.