Diligent Corporation

Diligent Corporation
Private Company
Industry Software as a service
Founded 1994[1]
Founders Brian Henry and Kiri Borg[1]
Headquarters New York City
Area served
 Global
Key people
 Brian Stafford (CEO)
Products Board member collaborative software
Services Corporate software
Revenue $83.1m USD revenue as at FY2014[2]
Website diligent.com

Diligent Corporation, known as Diligent, is a software as a service New Zealand company that enables board members of corporations, government organisations and not for profit groups to share and collaborate information for board meetings. The company has offices in Christchurch, New Zealand, and the head office in New York City, USA. Diligent was listed on the New Zealand NZX main board stock exchange under ticker code DIL.

Its products are based on a software as a service (SaaS) model and sold by subscription.

History

Diligent was founded by Brian Henry and Kiri Borg in 1994 as Manhattan Creative Partners (MCP).[1] SunAmerica became a client of Manhattan Creative Partners in 1998 when a director of SunAmerica, Peter Harbeck, and Brian Henry discovered a joint passion as airplane owners and recreational pilots. This led to a long and beneficial relationship.

In 1999, Alessandro (Alex) Sodi was hired and trained by Henry and Borg to assist in account management. Eventually, Henry turned over the day-to-day management of the SunAmerica account to Sodi. This enabled Henry to concentrate on maintaining his relationship with SunAmerica's Peter Harbeck, as well as continuing to build MCP's clientele.

In 2000, when SunAmerica expressed their desire to do away with their massive and onerous hard-copy corporate board paper books, Henry conceived of and hand-drew the design for the original and first web-based "Boardbook." Marco Morsella, the first employee hired by Henry and Borg in 1997 to be MCP's graphic designer, created a digital GUI based on Henry's design. SunAmerica became the first company to license the new, web-based Boardbook. Henry and Borg, and later the Diligent Partners, recognised the value of this innovative technology and invested most of the profits from other consultancy projects into the continuing development of the new software product.

In 2003, Henry and Borg formed Diligent Partners with other key individuals, including Sharon Daniels, Dan Kiley, Kenneth Carroll, Alex Sodi, and Robert Craig.[1] Henry was named CEO of the new entity, Alex Sodi, President, and Kenneth Carroll, Chairman. At the same time, the company renamed MCP to Diligent Board Member Services "to reflect the firm's shift of focus to corporate governance service delivery."[1] By 2006, Diligent had expanded to Europe, Canada, and the UK.

Initial public offering and fallout

Diligent listed on the New Zealand Exchange (NZX) in 2007 with a $24m NZX IPO, valuing the company at $115m. The fundraising for the company was successful but prior to the company listing, negative information about Brian Henry, original founder and CEO, and his brother Gerald Henry came to light. The allegations included reference to their bankruptcies in the late 1980s due to the 1987 sharemarket crash, and Gerald Henry's jail term for fraud in 1991 due to a draconian subset of US law.[3][4] Diligent put out a statement that Gerald Henry was not associated with the company.

The day following Diligent's listing, the company announced Henry's resignation as CEO due to the oversight of the disclosure of this information. However, some journalists at the time claimed that Diligent's PR firm and attorneys "should have advised Henry to publicly acknowledge his history."[4] In fact, Diligent's IPO attorney, Mark Russell, said his firm, Buddle Findlay, "was proud to have our brand associated with Diligent and with Brian in particular. We have no concerns whatsoever."[4] It was reported that "Diligent's promoters and directors, including director Mark Russell of law firm Buddle Findlay, knew of Brian's connection with Energycorp, but decided not to disclose. Coincidentally, Russell, in the 1980s worked for the Bank of New Zealand, which had lent the company $15.5m on a handshake."[4] Henry was replaced by Alessandro Sodi, who was then President. Henry remained on the Board, his value to the company recognised by the other members of the board.[5] Diligent's share price collapsed to $0.14 by March 2009 but later recovered to lead the pack of technology listings.[6]

Company growth and revenue restatement issues

With the release of the Apple iPad in 2010, Diligent developed an app for this new platform and commenced a period of explosive growth in client numbers. Diligent made its first operating profit in 2012. Between 2011 and 2012, company revenue grew by 165%.[7] By mid-2013, the Diligent stock price had reached over $8.00 NZD a share.

In August 2013, Diligent announced that it would need to restate revenue for the current and preceding three years due to discrepancies in company accounting practices. No fraud was involved, though the company was required to recognise revenue from the date of a contract being signed rather than the start of a month, and its installation fees recognised over a longer period of time. The company also acknowledged that its accounting systems were underdeveloped and required improvement.[8] It was fined by the NZX for a number of minor breaches of listing rules.[9]

Return to private ownership

On the 14th February 2016, Diligent announced that it had entered into a definitive agreement to be acquired by Insight Partners for consideration of $4.90 per share, valuing the company at $624M USD, subject to approval from the shareholders.[10] A Shareholder meeting was held in Auckland, NZ on the 13th April, 2016 and having received 57% votes in favour of the Merger (as it was structured), Diligent de-listed from the NZX and returned into private hands.[11] The merger was opposed by the NZ Shareholders Association who considered the offer too low, stating that "current offer is low compared to where the company's prospects have been in the past"[11]

New products

In 2014, a new software product "Diligent Teams" was announced for release in the fourth quarter of 2015. This development would further promote the Diligent style of collaborative tools into management rather than just the board member space.[12]

Alessandro Sodi stood down in 2015 from the CEO role to focus on the launch of Diligent Teams as Chief Product Strategy Officer. Sodi's replacement Brian Stafford, an ex-Mckinsey partner and software-as-a-service specialist, brought his expertise to the table.

As of December 2015, Diligent claimed over 107,000 board members and senior leaders as users of its software and reported full year revenue at March 2015 of $83.1m USD.[2][13]

Awards

Diligent has won multiple Stevie Awards for customer service, including in years 2013, 2014, and 2015.[14]

References

  1. 1 2 3 4 5 "Diligent Investment Statement and Prospectus" (PDF). New Zealand Government's Registrar of Companies (societies.govt.nz). pp. 35, 42. Retrieved 2016-03-19.
  2. 1 2 06:44:55 NZDT. "Diligent Q4 and Full Year 2014 Results Announcement". nzx.com. Retrieved 2016-01-26.
  3. ↑ "Briefcase: The Diligence of the modern director | The National Business Review". nbr.co.nz. 2013-03-01. Retrieved 2016-01-26.
  4. 1 2 3 4 "Opinion piece: Less than Diligent disclosure turns ugly". sharechat.co.nz. 2007-12-14. Retrieved 2016-01-26.
  5. ↑ "Diligent CEO resigns, stays on board". stuff.co.nz. 2009-01-01. Retrieved 2016-01-26.
  6. ↑ "Diligent okays $6m share issue - Business - NZ Herald News". nzherald.co.nz. 2009-03-12. Retrieved 2016-01-26.
  7. ↑ "Diligent expects to make milestone profit - Business - NZ Herald News". nzherald.co.nz. Retrieved 2016-01-26.
  8. ↑ "Diligent to restate revenue of past three years – US sales slow". nbr.co.nz. Retrieved January 25, 2016.
  9. ↑ "Diligent censured, fined for numerous listing rules breaches". nbr.co.nz. 2013-09-06. Retrieved 2016-01-26.
  10. ↑ "Diligent to Be Acquired by Insight Venture Partners for $US 4.90 Per Share in Cash | Business Wire". www.businesswire.com. Retrieved 2016-05-20.
  11. 1 2 Herald, New Zealand. "Diligent shareholders greenlight takeover by Insight Venture Partners". m.nzherald.co.nz. Retrieved 2016-05-20.
  12. ↑ O'Neill, Rob (2015-03-01). "Boardbooks app maker Diligent targets SaaS extensions". zdnet.com. Retrieved 2016-01-26.
  13. ↑ 06:45:56 NZDT. "Diligent Announces Third Quarter 2015 Results". nzx.com. Retrieved 2016-01-26.
  14. ↑ "Honored as Gold Stevie® Award Winner at 2015 American Business AwardsSM". diligent.com. Retrieved 2016-01-26.

External links

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