While U.S. investment firms have been the most active participants in private software investing, increasingly international firms are placing bold bets. Enter Bridgepoint, a European private equity firm with approximately $20 billion under management. The firm recently announced it is acquiring a majority stake in Israeli software testing company Qualitest.
Bridgepoint is acquiring control from Marlin Equity, a well-known U.S. based software focused private equity firm. Behind the investment thesis is a desire to scale rapidly into a massive market.
It estimates that Qualitest operates in a market that is growing at 13% annually driven by the growing demand of a $32 billion global outsourced market in which software performance has become more business critical.
Xavier Robert, Partner and head of Bridgepoint's investment activities in the UK, said: "We share management's ambitions for the expansion of Qualitest's platform through a combination of further organic growth and selective M&A. In a structurally growing market where technology disrupts every industry, new standards for quality and business assurance are required. Qualitest stands out for its track record of delivery and level of expertise."
Norm Merritt, CEO of Qualitest, also commented: "We're excited to have found a strong growth partner in Bridgepoint. They are thoughtful investors who seek to work with strong management teams and have a history of investing in high growth potential markets. Their long-term capital commitment provides us with the platform to accelerate the next stage of our development and execute our global acquisition strategy so that we can continue delivering outstanding value to our customers."
Bridgepoint is no stranger to taking control of companies and betting on long term growth. It has completed over 70 transactions in the last 10 years and covers a wide range of situations. Its buyout strategy focuses on companies with values up to 1 billion euro while its development capital strategy steers towards smaller buyouts up to 150 million euro. Lastly its growth strategy will invest on average 30 million euro in fast growing smaller companies.
While Qualitest is squarely in the technology space, Bridgepoint invests across sectors including business services, financial services, healthcare, manufacturing, consumer, media and technology.