Middle-market private equity firm HGGC has signed a definitive agreement to recapitalize Houston-based database software firm Idera. The deal values the IT operations solutions provider at $1.125 billion including debt, and is being done in partnership with Idera management and TA Associates, the owner of IDERA since 2014.
Founded in 2000, Idera provides database software solutions such as performance monitoring, inventory, security and auditing and PowerShell scripting. The enterprise software firm is a Microsoft Gold Partner and lists over 20,000 customers around the world, 97% of which are in the Global 2000. Idera does business with clients across spaces including education and government, competing with CA Inc. and BMC Software, the later owned by private equity firms Bain Capital and Golden Gate Capital.
Based in Palo Alto, Calif., HGGC was co-founded by former National Football League’s San Francisco 49ers star Steve Young and executive director Bob Gay, who has a breadth of experience in private equity space with firms such as Bain Capital and Sorenson Capital. Also known for his humanitarian work, Gay launched a global micro-credit company named Unitus in 2001 and now serves on the boards of various charities while holding a full-time leadership position with The Church of Jesus Christ.
The firm which closed its third buyout fund last year at $1.84 billion, is distinguished by an “Advantaged Investing” approach which is touted for facilitating a “strong alignment of interests” among principals by enabling the firm to source and acquire businesses through partnerships with management teams, founders, and sponsors who reinvest alongside the private equity group. Previous investments include marketing technology firm Etouches, automated marketing software company Selligent and product pricing software business FPX.
The new alliance is intended to place Idera in a better position to tap into the high-growth database management systems and developer tools markets, which together are estimated to be worth $50 billion. While many of the current solutions provided by large enterprise software companies are dated, expensive and inflexible, Idera says its main goal when designing software is to offer easy-to-use solutions.
HGGC, TA Associates and Idera management will provide equity between $400 to $450 million as part of the deal, while Jefferies will contribute about $700 million, reports Reuters. The investment includes a pending acquisition of an unnamed company bought by Idera over the recent period.