August 7, 2012 PRIVATE EQUITY FRIMS LOOKING TO ACQUIRE COMPANIES IN THE SOFTWARE INDUSTRY

Berkery Noyes’ first half 2012 mergers and acquisitions (M&A) report for Private Equity in the Information Industry showed that total volume increased two percent. Vista Equity Partners and Hellman & Friedman each had seven Information Industry transactions in first half 2012, making them the most acquisitive private equity firms by volume. Total value decreased eight percent, from $18.90 billion to $17.33 billion.

Private equity M&A within the Software portion of the Information Industry remained flat throughout 2011 but increased 15 percent during the last six months. Three of the top ten overall Software deals in first half 2012 were backed by private equity firms. 

This consisted of Turaz’s announced merger with Misys for $2 billion, Apax Partners and JMI Equity’s announced acquisition of Paradigm for $1 billion, and GTCR’s announced acquisition of CAMP Systems International for $675 million. These deals together accounted for 21 percent of financially sponsored transaction value in the Information Industry.

“Large private equity firms keen on making acquisitions are likely to continue pursuing deal opportunities in the middle and lower middle market,” stated John Shea, Managing Partner at Berkery Noyes. “There are several factors contributing to this. First, they are finding that it currently takes longer in some instances to sell their portfolio companies, which can temporarily limit the amount of capital they have available to invest elsewhere. Second, they are facing heightened competition from strategic buyers, as was demonstrated by the bidding process for Quest Software between Insight Venture Partners and Dell.”