Reading the Tea Leaves — Semeru Equity Partners Has Actually Purchased Controlling Interest in Utah-based JobNimbus for $330 Million and NOT Just Invested in the Firm

Author's Note:

Meaning can be transformed by changing a single word.

That's a lesson I learned a long time ago.

So, at the risk of being a "word geek," let me attempt to explain why words matter.

The BusinessWire "Word Use" vs. the Headline on the Sumeru Website vs. "Word Use" in the News Release on the Sumeru Website

Two days ago (at 6am ET on Wednesday, 13 November 2024), San Mateo, California-based Sumeru Equity Partners used BusinessWire to announce that it had invested $330 million in Lehi, Utah-based JobNimbus.

As further clarified in the opening sentence of this news release, Sumeru's $330 million equity stake in JobNimbus is described as a "growth investment" (as shown highlighted below in a screenshot captured last evening from the BusinessWire website).

The Headline on the Sumeru Website

However, while doing my research on this story, I was shocked to see the following headline jump-off-of the Sumeru homepage last evening:

Sumeru Equity Partners Closes Its Acquisition of JobNimbus

In fact, I captured the image below from the Sumeru website so readers can see what I saw.

Obviously, "growth investment" and "acquisition" have different meanings.

The News Release "Word Use" on the Sumeru Website

But then things got even more head-scratching for me when I turned to the news release on the Sumeru website announcing its transaction with JobNimbus.

This is what I found:

In other words, while the BusinessWire version of the news release uses the term "growth investment," the term is changed on the Sumeru website to read "control investment."

Additionally, I should note that the headline of this news release on the Sumeru website reads "Sumeru Equity Partners Announces $330 Million Strategic Investment in JobNimbus."

This means that Sumeru actually published three different headlines about its JobNimbus transaction, specifically

1. Sumeru Equity Partners Invests $330 Million in JobNimbus to Revolutionize the Roofing Industry (the exact same headline used on the BusinessWire release as well as on the JobNimbus website);
2. Sumeru Equity Partners Closes its Acquisition of JobNimbus (as used in the headline on the Sumeru homepage); and
3. Sumeru Equity Partners Announces $330 Million Strategic Investment in JobNimbus (as used in the headline of the news release published on the Sumeru website).

So ... What Really Happened? And Why Does it Matter?

In simplest terms, it's clear to me that with its $330 million investment, Sumeru gained controlling interest in Lehi-based JobNimbus.

Was this investment designed to help JobNimbus to grow?

Absolutely.

Such an approach is actually a key thesis behind Sumeru's approach to investing.

On the other hand, whether this was a purchase of an ownership stake of over 50% was not explained in any of the news release versions.

To some extent, whether Sumeru has a majority position in JobNimbus or not is immaterial me because it purchased a control position in the firm.

In other words, if Sumeru wants to literally (or figuratively) "throw its weight around," it can.

That's one of the benefits of having "controlling interest" in a company.

Conversely, unless the size of an investment is disclosed relative to the overall value of the firm being acquired, then one must assume it was a minority investment, e.g., an ownership position of under a 50%.

This being the case, one might extrapolate that the valuation of JobNimbus might be as high as $660 million (given the "controlling interest" purchase made by Sumeru).

Then again, it might also be somewhat lower; we just don't know.

What is explained in the release, however, is that the existing JobNimbus investors —

• CEO & Co-Founder, Ben Hodson,
• Co-Founders Nick and Jason Wood, and
• MainSail Partners —

are each retaining equity ownership in JobNimbus.

Nevertheless, how much ownership each will have in JobNimbus after this purchase by Sumeru is not explained.

Nor is it disclosed whether any or all of the prior investors had some or all of their respective ownership positions lowered.

According to the release, however, the expectation is that the "... funding will help enable JobNimbus to scale its operations, expand product offerings, and continue its mission to transform the contractor technology space."

Additionally, CEO Hodson said,

“We chose Sumeru as our partner because of their expertise in scaling high-growth companies, and with this funding, we’ll continue to double down on our commitment to making contractors heroes, helping them drive their businesses forward with advanced technology.”

Sumeru, JobNimbus and What's Next

For those not familiar with JobNimbus, in simplest terms, the company has built a platform of tools and services for roof repair and replacement specialists to help them be more successful as roofing contractors.

This means that since its found, JobNimbus has focused on providing such contractors with tools for marketing, communications, sales enablement, billing, and more.

Today, JobNimbus claims it has over 6,000 roofing contractors on its platform.

By comparison, according to a July 2024 report from IBIS World, there are over 96,000 roofing contractors in the United States.

On the other side of the equation, Sumeru Equity Partners was formed in 2014 as a standalone private equity firm when it was spun-out of Silver Lake Technology Management (the 11th largest PE firm in the world).

{NOTE: As of the closing of its $1.3 billion Fund IV in November 2022, Sumeru had over $3.5 billion in assets under management (AUM).}

Where it gets interesting, however, is in parsing the exact language within the news releases published by both Sumeru and JobNimbus.

Specifically, when I read terms and phrases in the releases like

• "expand product offerings"
• "transform the contractor technology space"
• "to help roofing and residential contractors" (emphasis added)

I have a sneaking suspicion that we will see some changes coming from JobNimbus in the not too distant future.

Like what?

Specifically, I suspect we'll see JobNimbus

1. Continue to grow its foothold in the roofing contractor space to become the dominant player there, while
2. Also growing beyond the roofing space alone to expand into other residential contracting arenas.

Which ones? Honestly, I'm not sure.

But were I on the management team at JobNimbus, I suspect I would be looking at every complementary "contracting" category possible, such as

• Home improvement to residential painters, as well as
• Plumbers to HVAC specialists, and
• Everything in between.

In other words, don't be surprised if the coming months and years are quite exciting for JobNimbus.

So nicely done on the "control investment" sale, Ben, Jason, Nick, and team!

And good luck.

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