Software firm Micro Focus (LSE: MCRO.L) has agreed to buy Serena Software Inc. from HGGC for $540 million in enterprise value. The pending exit will be the first out of HGGC’s second fund that closed in March 2015 with about $1.3 billion in capital.
Serena Software, based in San Mateo, California, provides software that can track and make changes to other application systems during the development process. The target helps more than one million users in about 2,500 business organizations. Under HGGC’s ownership, Serena reduced its debt by about $100 million, reached double digit Ebitda growth and began generating about $30 million in annual software license revenue. HGGC partnered with founder Doug Troxel to acquire Serena in 2014. The PE firm won Mergers & Acquisitions M&A Mid-Market Private Equity Frim of the Year for 2014 after making nine acquisitions and one exit during a time of transition.
Micro Focus, located in Newbury, England, helps companies maintain and upgrade information technology systems. The two companies say there is a high demand for businesses to have up-to-date technology for their employees and customers. Micro Focus CEO Stephen Murdoch said with the purchase the company is “further positioned to deliver richer solutions for the complex business demands customers are solving today.”
HGGC was founded in 2007 as Huntsman Gay Global Capital. The investors the firm was named for are Jon Huntsman Sr., chairman of chemical maker Huntsman Corp. (NYSE: HUN), and Robert Gay, a leader in the Church of Jesus Christ of Latter-Day Saints. They have no involvement in the current fund. The quartet running HGGC today includes three of the original founders, CEO Rich Lawson, former San Francisco 49ers quarterback Steve Young and former Bain Capital executive Greg Benson, plus former Citigroup Inc. (NYSE: C) chief financial officer Gary Crittenden. Earlier in 2016, HGGC acquired online marketing research company Instantly Inc. and in 2015, the firm closed a deal for closed a deal for automotive data company MotoFuze LLC.