New Mountain Capital LLC is purchasing a majority stake in Sparta Systems Inc., a developer of cloud-based enterprise quality management software for the manufacturing industry, from private equity firm Thoma Bravo LLC. Financial terms of the deal were not disclosed.

Founded in 1994, Sparta Systems makes software used by manufacturers and suppliers to automate quality, regulatory, and document management processes. The target’s technologies are used to help improve operational visibility, ensure regulatory compliance and to make products safer. Thoma Bravo will remain a minority investor in the target.

"We believe that New Mountain Capital is the ideal partner to support us in the next phase of our growth trajectory by investing in continuous product innovation and industry expansion," states Sparta Systems CEO Eileen Martinson. "I'm confident that this will enable us to advance our vision of a Quality Business Network through both organic and inorganic growth initiatives.

New Mountain Capital is a middle-market private equity firm based in New York. The firm invests in a plethora of sectors, including education, healthcare, software, business services, logistics, specialty chemicals, federal services, media, consumer products, financial services and insurance, environmental services, infrastructure and energy. New Mountain has approximately $19 billion assets under management and has also raised more than $15 billion in capital commitments across five PE funds since inception.

The software and technology sector are prime areas of interest for middle-market buyers. Luminate Capital, led by Hollie Moore Haynes, has backed airplane software developer Comply365; HGGC’s acquiring of data virtualization software maker Denodo; Cisco Systems Inc. (Nasdaq: CSC) is buying network management provider Viptela; Golden Gate has agreed to purchase interior design software developer 2020 Technologies; and MaxLinear Inc. (NYSE: MXL) is purchasing lighting chip maker Exar Corp. (NYSE: EXAR).

The deal is expected to close in the third quarter of 2017. Lazard is acting as financial adviser to Sparta Systems, while Kirkland & Ellis LLP is serving as legal counsel to Thoma Bravo and Sparta Systems. William Blair & Co. is acting as financial adviser to New Mountain Capital, while Willkie Farr & Gallagher LLP is serving as legal counsel.

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Kamaron Leach

Kamaron Leach

Kamaron Leach joined SourceMedia in 2016, serving as Reporter of Mergers & Acquisitions. Kamaron writes the Finance Finesse column about investment banking and lending, and also covers the media and entertainment sector.