Private equity firm HGGC has agreed to acquire a controlling stake in Idera Inc., a provider of database management tools. The tech-focused PE firm joins Idera CEO Randy Jacops and private equity firm TA Associates as investors.
Public equity markets are rewarding consolidation companies across the software sector, HGGC CEO Rich Lawson tells Mergers & Acquisitions. Idera has made more than 20 add-on acquisitions over the last decade, and Lawson expects it will make more in the future. The company, which is headquartered in Houston and has offices in Australia, Austria and the U.K., provides systems and database management software for Microsoft Windows and Linux servers.
“We remain disciplined,” says Lawson about the firm’s strategy to acquire majority equity in a company. “We never buy one hundred percent of a company.” The database management sector is a $50 billion market, according to Lawson, who says Idera’s management team serves as a great consolidator.
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.
Founded in 1968, TA Associates is a Boston private equity firm that targets the technology, financial services, business services, healthcare, and consumer sectors. The firm recently bought real estate tech company MRI and backed Retriever, a payments technology provider for healthcare providers, in January 2017. HGGC has a pre-existing relationship with TA Associates.
HGGC has been more than active in recent months. The firm recently bought medical supplements distributor AIMC LLC, purchased event management software company Etouches, acquired the online marketing research company Instantly Inc, and purchased insurance claims provider Davies Group. In December 2016, the firm also closed its third fund with approximately $1.84 billion in capital commitments. 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.