Golden Gate Capital has agreed to purchase 2020 Technologies, a software developer for interior space planning, from Vector Capital.
2020 provides digital applications and content used for interior space planning, retail and furniture manufacturing. The target’s software is used by professional designers, retailers and manufacturers to create kitchens, bathrooms, closets, homes and work spaces. 2020 has operational facilities in 11 countries with the company’s headquarters based in Westwood, Massachusetts and Laval, Quebec. Financial terms of the deal, which is expected to close in the second quarter of 2017, were not disclosed.
San Francisco-based Golden Gate holds investments in more than 35 companies across six industry sectors that include: industrials, financial services, software, semi-conductors and IT hardware, retail and restaurants, and information technology and business services. The San Francisco-based private equity firm seeks out “change-intensive investments” in order improve a company’s “earnings by catalyzing strategic and operational change,” according to the firm. In 2017, Golden Gate purchased: medical equipment manufacturer Cole-Palmer, restaurant chain Bob Evans, and in 2016 bought aircraft ground support equipment provider Tronair Parent Inc.
Founded in 1997, Vector Capital is a San Francisco-based private equity firm that targets tech-enabled businesses. Vector, alongside 20-20 founder Jean Mignault, took 2020 private in July 2012. The PE firm, according to sources close to the deal, earned nearly six times the capital it invested in 2012 as part of its deal to sell. Vector has a consistent track record of acquisitions within the sector. Since the firm's inception, Vector Capital has made more than $3 billion in investments. In February 2017, Vector raised $1.4 billion in capital, committing to its backing of software, internet and digital media, communications, and industrial technology service companies. In 2015, the PE firm acquired Saba Software and also purchased IPValueManagement Inc. Vector Capital previously won Mergers & Acquisitions’ M&A Mid-Market Award for Seller of the Year in 2013.
Deals for software-as-a-service (SaaS) companies are expected to soar throughout 2017, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). Related SaaS deals include: Community Brands’ acquisition of Abila from PE firm Accel-KKR; Bregal Sagemount’s investment in Internet access provider Single Digits Inc.; Clearlake Capital Group LP’s acquisition of legal software maker NetDocuments; and Thoma Bravo’s purchase of enterprise software developer Planview.
William Blair is acting as financial adviser to 2020 and Vector Capital, while Sidley Austin is serving as legal counsel. Kirkland & Ellis, alongside Nob Hill Law Group, are serving as legal counsel to Golden Gate. Goldman Sachs (NYSE: GS) Specialty Lending Group has agreed to provide debt financing on the deal.