Vector Capital Makes Bet On Customer Engagement Market With Aspect Software Buy

The Software-as-a-Service market was on fire in 2018 and if the early deal-making in 2019 is any indication, investors and industry watchers should brace for more of the same.

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After all, with companies moving more of their operations to the cloud, demand for SaaS solutions are only expected to grow.

It's one of the reasons in early January Vector Capital, a private equity firm focused on the technology sector, agreed to buy Aspect Software, the maker of customer engagement software. Vector Capital is investing more than $100 million in Aspect’s business as a result of the acquisition while its existing lenders are providing the Phoenix, Arizona-based software company with a new credit facility when the transaction closes.

“We are excited to partner with Vector Capital as we continue to accelerate Aspect’s strategic transformation, execute on our growth plans and refine our go-forward strategy,” said Chris Koziol, Aspect’s President and Chief Executive Officer when announcing the deal on Jan. 2. “Vector Capital brings substantial operational and financial resources as well as a proven track record of helping enterprise software companies invest in new products, accelerate innovation, and build market-leading businesses.”

Acquiring a software company is nothing new for Vector Capital, the nearly twenty-year-old private equity firm that has been partnering with management teams of technology companies to transform and grow their operations. Since its founding, it has made more than $3 billion in investments via buyouts, recapitalizations, corporate divestitures, credit securities and restructurings, and minority investments. Claiming to be the first PE firm to focus solely on technology, Vector Capital boasts 175 years of collective experience in the technology sector, which helps it provide unique insights and experience to the companies it invests in. Over the years, it has backed a wide range of technology companies including CloudSense, which makes enterprise cloud software, Open Solutions, which provides enterprise core account processing technology for the financial industry and Triton Digital, the software company serving the digital audio marketplace, to name a few.

In announcing the acquisition of Aspect, Sandy Gill, a principal at Vector Capital said the PE firm is impressed with the leadership team at Aspect and its growth prospects.  “We look forward to backing Aspect during its next stage of growth and helping the Company accelerate its development through both organic initiatives and strategic acquisitions,” the PE investor said when the acquisition was announced.