Blackbaud CEO Marc Chardon is stepping down, the Daniel Island-based software company announced this morning.
Chardon, who has led Charleston’s biggest software company for seven years, will leave at the end of 2013 or whenever his successor is named, whichever comes first, according to the company.
The move, while surprising, comes a week after Blackbaud announced it was laying off 150 employees in the wake of worse-than-expected financial performance after acquiring former Texas rival Convio last year.
Buying Convio had been part of Chardon’s plan to make Blackbaud, which went public in 2004, a billion-dollar company. But integrating the two companies, which both made fundraising software for nonprofits, did not go as smoothly as planned.
“It has been an honor to serve as Blackbaud’s President and CEO for the past seven years, and to work with the finest employees and management team in the industry,” Chardon said in a statement. “Now is the right time to select a new leader for the next phase of the Company’s development and growth. I will work with the Board to help identify the best possible candidate to serve as Blackbaud’s next President and CEO and to ensure that this transition is seamless for all of our stakeholders. I am confident that, when the time comes, I will leave the Company in excellent hands with a strong team that will continue to succeed and build on the important progress we have made.”
Andrew Leitch, chairman of Blackbaud’s board of directors thanked Chardon, noting he had “successfully led the Company through a significant transformation.”
“During his tenure over the last seven years, we have nearly tripled our revenues,” Leitch said in a statement. “Marc has been a valuable member of the Blackbaud Board and leadership team and we wish him all the best in his future endeavors.”
In the Wednesday morning announcement, Blackbaud said it will retain an executive search firm to pick its next president and CEO from a pool expected to include both internal and external candidates.
Chardon, a Microsoft veteran, will work with the board to help identify his successor and then pursue business interests advising and investing in technology start-ups and devoting more time to the philanthropic community, the statement said.
The announcement also noted Blackbaud will report its fourth-quarter and full-year 2012 financial results on the morning of Feb. 13. In a bid to calm investors, the company said it expects to meet or exceed revenue and earnings targets for the fourth quarter.
Founded in New York more than three decades ago, Blackbaud moved to Charleston in 1989 and, fueled by acquisitions of companies from Indianapolis to Australia, has grown into a giant in its industry.
Even after the most recent job cuts take effect at the end of the month, Blackbaud will still have about 2,600 employees, with approximately 1,150 on Daniel Island.
The most recent acquisition, the $325 million Convio deal, was its biggest yet -- a major strategic play by Chardon.
Announced a year ago, the move was seen by some as Blackbaud’s bid to consolidate control of the market. Convio, a 400-person operation based in Austin, Tex., had different specialties than Blackbaud, but the companies had viewed each other as competitors.
But a protracted U.S. Department of Justice antitrust review postponed the deal’s consummation until May, a costly few months of limbo for both companies.
Chardon and other executives remained upbeat about the merger throughout and after the review, but fitting together the two companies’ people and products was a major task.
In late August, the company eliminated 51 positions and announced Convio’s former CEO would not stay with the combined company. Around the same time, Blackbaud also announced it would discontinue one of Convio’s products, Common Ground.
During a quarterly earnings call last summer, Blackbaud executives said they were aiming for a 20 percent profit margin, but the company’s third-quarter earnings report in November was short of expectations.
The shortfall was blamed on costs related to the Convio acquisition, “execution” issues within the Blackbaud’s services business and sales-force disruptions in the July-September period.
Blackbaud trimmed its sales forecast for the year by 2 percent, projecting that the figure will now come in between $451 million and $453 million.
Chardon had repeatedly said his goal was to more than double Blackbaud’s annual revenues to $1 billion, but now that won’t happen with him at the helm.
On Jan. 15, the company announced the latest round of position eliminations, this time putting 150 people, including 50 at the local headquarters, out of a job.
While the company’s stock bounced on the news and some said it was a necessary leaning of the business, Chardon called it “a sad day for Blackbaud.”
Among the reasons for the cuts, according to an internal document, were the company’s “recent financial performance (slow growth of revenue and bookings),” including Convio’s disappointing performance last year, and the “continued (and likely continuing) slow economy.”
The cuts were spread across departments and the company’s American offices, though only “a handful” of positions were cut at the former Convio headquarters in Austin, according to a company spokeswoman.
Blackbaud is still hiring, according to Karoline McLaughlin, the spokeswoman, and forecasts growth in both its international and online fundraising businesses. Blackbaud is also releasing a new ticketing software this week, according to another spokeswoman.
But the problems remain, and the upcoming leadership change, which comes about a year after Blackbaud hired a new chief financial officer, will provide a fresh challenge for the local tech mainstay.
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