Technology specialist Francisco Partners enjoyed a spectacular 2016, with many highlights, including: the purchase of Sintec Media, which makes broadcast management software; the sale of Aesynt, which develops medication management software, to Omnicell Inc. (NASDAQ: OMCL) for $275 million; and the initial public offering of Ichor Holdings Ltd. (Nasdaq: ICHR). But the most compelling deal that the San Francisco firm closed in 2016 was the $2.4 billion purchase of Dell Inc.’s software group and the subsequent carve-outs of Quest Software and SonicWall.
From 2010 to 2015, Dell had spent about $4.2 billion to beef up its software group with network security and identity management products through acquisitions, including buying SonicWall in 2010 and Quest in 2012. But in 2016, the top priority for the company owned by founder Michael Dell and private equity firm Silver Lake Partners was to buy EMC Corp. The deal for EMC closed in September with a purchase price of $67 billion, making it the largest technology deal in history. To seal the deal, Dell had to raise funds, and selling its software business was part of the strategy.