Tailwind Capital (“Tailwind”), a middle market private equity firm investing in targeted sectors within technology & business services, industrials and healthcare, has closed on its acquisition of ArrowStream (“ArrowStream” or the “Company”) from Diversis Capital. Terms of the transaction were not disclosed.

ArrowStream is the leader in supply chain management software for the foodservice industry, enabling clients to capitalize on data to improve their supply chain operations. The Company’s innovative solutions address mission-critical challenges in brand protection, supply monitoring, profitability optimization, and sales growth enablement across the foodservice supply chain, leveraging a single industry-wide data platform to provide unprecedented levels of transparency, control and actionable insight. ArrowStream’s market-leading supply chain technology connects over 250 restaurant chains, 1,000 distributor locations and 8,000 suppliers on a single platform for collaboration, and includes well-known companies such as Shake Shack, QSCC, Performance Food Group, QDOBA Mexican Eats, Ben E. Keith, Foodbuy, IPC/SUBWAY, SMS/Popeyes, Brinker International, and International Dairy Queen, among others.

“This is an exciting day for ArrowStream, our customers and our future—Tailwind is an ideal partner who shares our strategic vision of continued investment to meet the expanding needs of our clients in the foodservice market,” said Jeff Dorr, president of ArrowStream. “We have been leading the way to create a true foodservice collaboration platform. This acquisition paves the path for us to accelerate that vision for the industry in a time now which has shown that end-to-end data visibility and guided analytics are more critical than ever to running the supply chain to meet customer demands and market fluctuations.”

Tailwind plans to invest heavily in ArrowStream to continue development of its innovative products and further increase market share growth in foodservice segments where technology adoption is growing quickly. The supply chain disruption caused by the coronavirus pandemic emphasized the criticality of ArrowStream’s technology, allowing its customers to gain necessary product and inventory visibility, reduce supply chain costs and maintain brand quality.

Rick Willett, Tailwind operating executive and executive chairman of ArrowStream, added, “We have been impressed by ArrowStream’s unique culture, differentiated technology offerings and diverse, dedicated customer base. Their team has a passion for addressing the most critical client challenges through data and innovative solutions, as evidenced by the Company’s remarkable customer satisfaction ratings and the ROI delivered by its technology. We see many compelling areas where we expect to invest in order to expand ArrowStream’s capabilities to meet the growing needs of our customers.”

With Tailwind’s investment, ArrowStream will accelerate the addition of value components for its customers through collaborative new solutions in supplier inventory visibility, product and service quality control, strategic sourcing, real-time freight tracking and supplier management. ArrowStream will remain a strong partner to its customer base of restaurant chains, distributors and manufacturers, helping them to improve visibility, efficiency and risk mitigation throughout the entire supply chain.

“We are incredibly excited to invest in ArrowStream,” said Sanjay Swani, Tailwind managing partner. “We believe the Company has tremendous growth potential which we expect to support with further investment. ArrowStream will be Tailwind’s third software platform in the last 18 months and fits squarely within our strategy of partnering with high-growth technology companies in growing and dynamic end markets.”

Robert W. Baird & Co. and CoveView Advisors served as financial advisors to Tailwind and Kirkland & Ellis as legal counsel. ArrowStream was advised by Lincoln International LLC as financial advisor and O'Melveny & Myers LLP as legal counsel.