Centerbridge Partners buys two Clearlake-backed SaaS providers

Centerbridge Partners has reached a deal with Clearlake Capital to buy a newly merged company, consisting of two software developers Syncsort and Vision Solutions, for $1.26 billion. The new company will be headquartered in Pearl River, New York and operate under the Syncsort brand.

Software-as-a-service (SaaS) companies are driving tech deals throughout 2017 and are expected to continue, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). Other SaaS deals include: TA Associates’ agreement with the Carlyle Group (Nasdaq: CG) to acquire real-time monitoring software provider ITRS; Hewlett Packard Enterprise Co.’s (NYSE: HPE) deal to buy software company SimpliVity for $650 million in cash; Thoma Bravo’s deal to acquire software maker Planview.

Syncsort, based in Woodcliff Lake, New Jersey, specializes in advanced analytics and big data services by manufacturing high speed sorting products. Syncsort’s capabilities power new technology while also reducing the cost of mainframe and legacy systems. In November 2016, the Clearlake-backed company bought Trillium Software for its scalable data movement, transformation, profiling, and quality capabilities.

Vision Solutions, based in Irvine, California, provides data centers with software solutions for protecting and migrating data, applications and systems of enterprises to the cloud. The firm has about 12,000 customers in more than 70 countries, including Fortune 500 companies. In January, the target began to refocus on the expanding security software market with the add-on purchase of software developer Enforcive Systems Ltd.

Syncsort and Vision Solutions’ backer, Clearlake, is a lower middle-market private equity firm with more than $3 billion in assets under management. The Santa Monica-based firm, founded in 2006 and makes investments in a variety of sectors including: industrials and energy, communications, software, consumer and technology-enabled services. The PE firm bought Syncsort in 2015 and purchased data protection software provider Vision Solutions Inc. from Thoma Bravo LLC in 2016.

Centerbridge Partners is a private investment firm based in New York and London. The firm has approximately $29 billion in assets under management. Clearlake will retain an ownership stake as part of Centerbridge’s acquisition of the newly combined Syncsort. The deal is expected to close in the third quarter of 2017.

Evercore Partners Inc. (NYSE: EVR) and Jefferies Group LLC (NYSE: JEF) are serving as financial advisers to Syncsort and Vision Solutions. Bank of America Merrill Lynch (NYSE: BAC) and Credit Suisse (NYSE: CS) are acting as financial advisers to Centerbridge. Financing for the transaction was provided by Bank of America Merrill Lynch, Credit Suisse and Antares Capital.