Golden Gate Gobbles Up Another Software Co. –

Golden Gate Capital has purchased a $50 million majority stake in Hansen Information Technologies, a provider of software solutions to local governments.

Hansen’s clients include the cities of Austin, Baton Rouge, Chicago, Johannesburg and the Government of Western Australia. Its applications help operate the daily toils of governments in such fields as building permits, property tax and utility billing. It put a new product on the market in the early fall, which has so far experienced great success, its Microsoft.NET, Web-based product suite, Hansen 8, which its clients have been migrating to from Hansen 7. The company boasts 110,000 users worldwide.

Hansen, based in Rancho Cordova, Calif., started thinking about a sale in mid-fall, said Hansen CFO Scott Wright. Golden Gate made the cut due to its long-term track record, particularly with a few deals over the last year in software. Hansen was impressed by Golden Gate’s other buyouts in the space such as it deal for Infor, which provides Internet and relationship planning services to manufacturers, and Plant Equipment, which makes emergency dispatch communications software. Wright was also impressed with Golden Gate’s industry expertise, which was aided in part by consulting firm Bain & Co. (Several MDs at Golden Gate came from Bain and Bain Capital), which helped the firm research the industry.

“It gave us comfort they’d done so much homework ahead of time,” said Wright. David Dominik, managing director at Golden Gate and lead on the deal, mentioned the company’s “impressive trajectory” in a statement and said the company is transforming enterprise software for governments, but he didn’t return a call for further comment.

Wright said M&A will feature prominently in the company’s growth plans going forward. The company has a few targets in mind, but hasn’t initiated any M&A processes to this point, he said.

The total transaction value was about $50 million which valued Hansen at between $90 million and $100 million, said Wright. Last year the company did about $35 million in sales, and this year the total should be around $45 million, he said. Wright didn’t want to disclose EBITDA figures. Hansen’s plans are ambitious. Over the next three years, Wright said the company would like to have revenues in the $150 million to $200 million range.

The company’s founder, Chuck Hansen, has a venture capital past. He worked for Menlo Ventures and for that reason, the company didn’t use a financial advisor but brokered the deal itself, said Wright.

Golden Gate Capital has more than $2.6 billion in capital under management. It says its focus is investing in “change intensive” industries. That aim is beared out in its portfolio: the firm has completed more than 40 software acquisitions with over $2.5 billion in revenue in the last four years.