Due Diligence Review: Berbee Information Networks Corporation

Hoosier Banker, Oct 2006 by Freeman, Paul W

The purpose of a due diligence review is to assess the appropriateness of a given product or service for the Indiana Bankers Association membership. It is intended to augment, not replace, an institution's own due diligence efforts. It is not the purpose of a due diligence review to make qualitative choices among competitors. A due diligence review is not an exclusive relationship. The IBA reserves the right to serve other firms offering the same or similar products/services.

Every effort has been made to assure the accuracy and completeness of this due diligence review. Any comments or questions should be addressed to Paul Freeman at 317-387-9380, e-mail: pfreeman@indianabankers.org.

COMPANY OVERVIEW

Berbee Information Networks Corporation provides strategic information technology solutions designed to improve its customers' productivity and competitive position.

It provides the services and infrastructure to enable its customers to deploy information technology, either in its own environment or to outsource it in the company's data center. The services offered by Berbee include:

* Strategic technology planning;

* Systems and hardware integration;

* Network security assessments;

* Custom software development;

* Enterprise server and network equipment procurement;

* Data center co-location and managed services;

* Application service provisioning;

* Web hosting and dedicated Internet connectivity.

Berbee serves clients in a broad range of industries including retail, financial services, consumer products, manufacturing, health care and government agencies.

COMPANY HISTORY

Berbee was founded in 1993 in Madison, Wis. Jim Berbee, a former IBM systems engineer, formed the company to assist corporations with their networking and mid-range server environments. Berbee has grown to more than $225 million in revenues and more than 600 employees. It maintains data centers in Madison, Wis., and Minneapolis, and additional sales offices are located in Illinois, Indiana, Michigan, Ohio and Tennessee.

EXECUTIVE MANAGEMENT

James Berbee - chairman of the board.

Paul Shain - chief executive officer. Shain joined the company in 2000 as chief operating officer and became CEO in 2005. Prior to joining the company, he was managing director and director of research for Robert W. Baird & Co. Inc., where he was the senior information technology services analyst and was responsible for the overall supervision and administration of Baird's equity research efforts.

Greg Sliwicki - president. Sliwicki joined Berbee in 1998 as branch manager of its newly opened Appleton, Wis., office. He became vice president of sales in 2000 and president in 2005. Prior to joining the company, Sliwicki spent 14 years at IBM in various sales and marketing roles.

Brett Rimkus - chief financial officer. Rimkus joined Berbee in 1997 as controller. In 1998 he became vice president of operations, and in 1999 he was named chief financial officer. Rimkus has more than 12 years of experience working in the business services and public accounting industries.

Diane Rivers - vice president, Berbee people department. Rivers joined Berbee in 1998 to support company growth and build Berbee's human resources practice, using her 15 years of experience in the technology industry.

TECHNOLOGY PARTNERSHIPS

Berbee is among less than 10 percent of IBM partners to earn its highest ranking nine years' running. Earning IBM's Premier Business Partner status requires top performance in essential operational drivers.

Berbee also is among an elite group of Cisco Gold Certified Partners with demonstrated expertise in virtually every aspect of Cisco's business, including planning, network design, network management, support and global networking.

Finally, Berbee is a Microsoft Gold Certified Partner, reflecting its depth of experience and market leadership.

FINANCIAL STRENGTH AND STABILITY

The following documentation was provided as part of this due diligence review:

* Audited* financial statements for the year ended Dec. 31, 2002;

* Audited* financial statements for the year ended Dec. 31, 2003;

* Audited* financial statements for the year ended Dec. 31, 2004;

* Credit information, including bank and trade references.

* PricewaterhouseCoopers LLP

Berbee Information Networks Corporation is a privately held company. Ownership is limited to the company's directors, employees and key advisers. Stockholders are subject to stock agreements that limit the transferability of the stock and also grant the company the option to purchase the common stock of such stockholders in the event of termination, death, disability or, prior to sale or transfer, to any other third party.

Berbee has sustained strong revenue growth, as shown below:

Key balance sheet trends are shown in the chart at the bottom of this page.

INDUSTRY REPUTATION

The IBA was provided with the following references:

Allied Solutions

David Hilger

11550 N. Meridian St.

Carmel IN 46032

317-428-5465

david.hilger@alliedsolutions.com

BFS

Jim Cowan

310 E. 96th St.

Indianapolis IN 46240