Randy Jacops, the CEO of B2B software developer Idera Inc., achieved many milestones in 2017, including a trio of acquisitions and a $1 billion recapitalization that brought in private equity firm HGGC as a new majority stakeholder. Other achievements included: growing Idera’s employee base by 37 percent; releasing 63 new products; adding 8,500 new enterprise clients; and expanding the company’s presence in the Asia-Pacific, Latin American and European territories.
Jacops has a long track record running technology companies. He became the CEO of Idera in 2013 after serving as COO. Previously, he served as the CEO of software developer Versata Enterprises and as a venture partner at Valhalla Partners. In 2014, TA Associates bought Idera, and TA director Hythem El-Nazer joined the board. In the 2017 recap, TA remained a minority stakeholder, as did Idera management.
Under TA’s ownership, Idera grew significantly through transactions. “M&A drove our revenue to a 300 percent increase over the past three years,” Jacops explains. “This includes a 2015 deal where TA’s Hythem El-Nazer championed the acquisition of a company larger than Idera. While some investors questioned projected synergies, the results transformed market confidence in our team. M&A also exposes our team to new and different ideas and ensures we challenge ourselves to constantly innovate products and go-to-market strategy.”
In 2017, Houston-based Idera closed three transactions - one for each business unit: AquaFold Inc. in the database tools business unit; Sencha Inc. in the development tools division; and Ranorex GmBH in the testing tools group.
“With balanced transition resources, we integrated the companies in 90 days and exceeded synergy targets,” Jacops explains. “We accelerated growth via simplified licensing, improved maintenance programs, and optimized demand generation. We expect these accretive acquisitions to grow even faster as we cross-sell to our installed base.”
Acquisitions are expected to play a significant role in Idera’s future with HGGC on the team. “TA has been an excellent partner and supported our acquisition strategy. Like TA, HGGC understands proper risk-reward analysis,” says Jacops. “In addition to fresh eyes and new energy at the table, HGGC is world class at partnering with successful private equity management teams and instilling the confidence to think bigger and deliver outsized results.”
HGGC has built a successful track record in the infrastructure software space. HGGC’s successes in the sector include buying Serena Software from Silver Lake Partners for $450 million and selling it two years later to Micro Focus for $540 million in 2016.
“Early on, HGGC’s Neil White articulated a goal of doubling the company size in three years,” Jacops says. “My goal is to exceed Neil’s challenge, and that will require a focused commitment to finding companies where we can deploy our playbook to accelerate growth and profits. Our leadership team’s playbook has delivered proven results in over 20 acquisitions, and we expect to do the same with the new ownership team.”
HGGC’s hopes for Idera are high. “The infrastructure software space is currently undergoing mass consolidation,” says HGGC CEO Rich Lawson. “A key pillar of HGGC’s investment thesis is to drive Idera’s M&A activity to stay at the forefront of this trend.”