New Thoma Bravo Fund Makes First Deal

Target: Macrovision Corp.’s software business
$200 million
Thoma Bravo
Macrovision Corp.
Financial Adviser:
Seller: Cowen & Company
Legal Adviser:
Sponsor: Kirkland & Ellis LLP

Carl Thoma and Orlando Bravo, two partners who recently split from Chicago-based buyout shop Thoma Cressey Bravo, agreed to their first acquisition from their new fund, acquiring the software business of Macrovision Corp. earlier this month.

The deal was announced as being made by Thoma Cressey Bravo. It will be financed, however, by Thoma Bravo Fund IX LP, the first fund raised by Thoma and Bravo after they and Bryan Cressey decided to raise separate funds. Thoma and Bravo are still raising the fund, which is targeting $1 billion, and the pair are focusing mainly on technology deals. Cressey, meanwhile, has opened Cressey & Co. LP, a shop specializing in health care, and is seeking $500 million for an inaugural fund. Cressey has also begun building up his team, which now includes former Senate majority leader and heart surgeon Bill Frist.

Thoma Bravo‘s $200 million carve-out will give the firm control of the FLEXnet and InstallShield family of products, which help independent software vendors manage entitlements, software licensing, compliance, installation and electronic software delivery. The deal is expected to close by April 1.

The firm tracked Macrovision’s activities for a year and saw an opening for a deal when Macrovision agreed in December to acquire Gemstar-TV Guide International Inc. for $2.8 billion, said Seth Boro, principal. In addition, the Thoma Bravo team figured that Macrovision would need funds to finance the Gemstar-TV Guide deal, and that the transaction would also make FLEXnet and InstallShield non-core assets. The firm liked the assets because they are well-known, serving some 60,000 customers.

Cowen & Co. brokered the deal. Boro said Macrovision had tried to shop FLEXnet and InstallShield and perhaps some other assets last year with a different bank. He said Thoma Bravo was not involved in that process. Macrovision did not return calls seeking comment. A source close to Cowen & Co. said Macrovision retained the investment bank in August, and that other advisers had previously worked with Macrovision on unloading assets.

Once the deal closes, Thoma Bravo intends to establish the as-yet unnamed carve-out as a standalone business. The firm is looking at 10 possible add-on acquisitions and has already discussed a deal with one of the potential sellers, Boro said.

Thoma, Bravo and Cressey decided to part ways amicably in November. They continue to oversee investments made via Thoma Cressey Bravo funds.—B.V.