Private equity firmHGGCis buyingSerena Software from PE firmSilver Lake Partners in a deal that is said to be worth around $450 million.
San Mateo, Calif.-based Serena make software that aims to streamline information technology processes for companies. Clients include banking, finance, insurance, aerospace and defense, business services, communications and media, government, health care, retail and technology organizations.
Serena founder Doug Troxel will increase his 30 percent minority stake in the company in connection with HGGC's purchase, and remain on the board of directors.
"It was a huge vote of confidence that he would look at this and say, 'I'm not going to take anything off the table,'" HGGC CEO Rich Lawson says. "These are the kind of people you want to find and partner with."
This is HGGC's first investment from its new fund, Lawson says. HGGC is working to raise $1 billion for its second fund, according to reports.
Serena CEO Greg Hughes, who was put in place under Silver Lake's ownership, will also remain in his position.
HGGC's investment should allow Serena to invest in research and development, sales, marketing and customer support resources, as well as make acquisitions to scale the business and penetrate new markets. "Our game plan is typically to help these businesses go global," Lawson says.
The investment allows the firm to "back a true industry pioneer in Doug Troxel," Lawson says. "Doug's company is the largest independent company today in this space."
The deal is Palo Alto-based HGGC's fifth technology services platform investment, following deals for Sunquest Information Systems, which was sold in 2012, Hybris Software, which was sold in 2013, Innovative Interfaces and MyWebGrocer. The firm counts former NFL San Francisco 49ers quarterback Steve Young among its partners.
"We don't profess to know the businesses better, and we never acquire 100 percent of a company. It's a true partnership this is back-to-basics mid-90's private equity," Lawson says.
The firm's recent acquisitions includeBuy4Now Technology Group, which was added toMyWebGrocerin February, a grocery advertising networking and digital marketing service for grocery stores that HGGC bought in June.
Los Angeles-based Silver Lake paid $1.2 billion for a majority stake in Serena in 2006. During Silver Lake's ownership, the firm added-on Pacific Edge in 2006 and Projity in 2008 both companies provide project management services. Silver Lake has about $20 billion in assets under management and committed capital. The firm's portfolio companies include Dell, Global Blue and Alibaba Group.
Serena had revenues of more than $200 million for fiscal year 2013.
Credit Suisse is HGGC's financial adviser for the transaction, and is providing financing. Kirkland & Ellis LLP is the firm's legal counsel.