Clearlake Capital Group wants to extend its backing of portfolio company Ivanti through a process that would move the software business out of older funds into a continuation vehicle, three sources told Buyouts.
The Ivanti process is interesting in that Clearlake recently sold a partial stake in the company to TA Associates in a regular M&A transaction. The M&A deal was announced this month and is expected to close in the second half of the year.
Ivanti’s single-asset process is one of several that have gone live, or are expected to, as the market emerges from the pandemic downturn.
Clearlake is working with Evercore and Credit Suisse on the process, which could total up to $1 billion, sources said. The single-asset process would allow LPs in Clearlake’s Funds II, III and IV, which hold Ivanti, to either cash out of their exposure to the company, or roll their interest into the continuation pool. Continuation vehicles generally come with three-to-five-year terms.
The deal is in its election period and could wrap up in September, one of the sources said. During the election period, LPs in the older funds choose whether to cash out of their stakes or roll their interests with the GP.
Having hit the market only in the past few weeks, the process moved quickly and is already oversubscribed, one of the sources said.
A unique aspect of the Ivanti process is that the M&A transaction with TA provided a valuation for the company (which was more than $2 billion). Traditionally GP-led secondaries deals involve one or more fair value assessments from third-parties to help set pricing. In this case, another GP has helped set the valuation.
The history of how Clearlake built the company is complex.
In 2015, Clearlake acquired FrontRange Solutions and merged it with existing portfolio company Lumension Security, which it bought in 2014, to form Heat Software. Clearlake in 2017 acquired cybersecurity provider LANDesk Software from Thoma Bravo and merged it with Heat Software. The firm renamed the combined company Ivanti.
Further expanding the business, in 2017 Ivanti added-on RES Software and Concorde Solutions.
Ivanti is one of several single-asset processes in the market or preparing to come to market after Labor Day. Thomas H. Lee Partners is seeking to raise $400 million to $600 million to move HighTower Advisors out of Fund VII and into a continuation vehicle, Buyouts previously reported.
Single-asset deals accounted for 30 percent of GP-led transactions in the first half, up from 20 percent in 2019, according to first-half secondaries volume report from Evercore. GP-led deals were about 39 percent of an estimated $18 billion total deal volume in the first half, Evercore found.