Middle-market investment firm HGGC has acquired a stake in Denodo Technologies Inc., a developer of data virtualization software. The deal comes as many observers expect technology to be the sector that will power M&A activity throughout 2017 and going forward.
Denodo provides data integration services from the company’s headquarters in Palo Alto, California. That target’s data virtualization software is used for logical data warehouses and data lakes, single-view applications, cloud modernization, governance and compliance initiatives. According to HGGC, data virtualization is gaining a bigger market share of the $4.5 billion data integration industry as more businesses realize it delivers greater efficiencies, while also complementing other data management investments.
Denodo touts Amgen, Asurion, Seagate and Sumitomo Mitsui Trust Bank (NYSE: SMFG) as part of the company’s client list. The target also has a research and development team based in Coruna, Spain. Financial terms of the deal were not disclosed; however, the target was backed by funds from HGGC’s $1.84 billion fund.
HGGC is a middle-market private equity firm based in Palo Alto, California with more than $4.25 billion in capital commitments. The PE firm was founded in 2007 as Huntsman Gay Global Capital. Today the firm is led by Lawson, Greg Benson and managing director Steve Young, who played quarterback for the San Francisco 49ers. Young, who has now been in the investment space longer than he played for the National Football League, is joining Idera’s board of directors as part of the deal. The $1.125 billion recapitalization includes funding for a pending add-on deal by Idera that is expected to close by year’s end.
HGGC has remained one of the more active private equity firms throughout 2017. The firm recently bought medical supplements distributor AIMC LLC, purchased event management software company Etouches, swallowed up vitamin distributor Nutraceutical International Corp. for $446 million, acquired the online marketing research company Instantly Inc, bought database management provider Idera, and purchased insurance claims provider Davies Group. Mergers & Acquisitions awarded HGGC with the M&A Mid-Market Award for Private Equity Firm of the Year in 2014, when the firm raised its second fund.