Price: $570 million
Seller: Thoma Bravo
Buyers: Hellman & Friedman, JMI Equity
Terms of the deal were not disclosed, but a source familiar with the situation said the transaction was valued at $570 million, earning Thoma Bravo a 4x return on one of the largest investments from its seventh fund. That fund had posted an IRR in the high 30 percent range as of late 2008, Buyouts previously reported. In addition to plumping up Thoma Bravo’s already-fat return, the sale represented a win for co-investors
Under Thoma Bravo’s ownership, Datatel doubled its earnings and used its cash flow to pay down debt organically. Meanwhile, Thoma Bravo took a $124 million dividend from the company through a 2006 recapitalization.
Thoma Bravo Partner Orlando Bravo said the firm had planned to hold Datatel longer, but chose to sell when Hellman & Friedman approached the firm with a fair price. “Datatel is the kind of property that we’d like to hold forever,” he said. “But we’re in the business of providing liquidity to LPs.”
Datatel has “quality revenue” and “mission critical” products; qualities known to make technology services investors salivate, Bravo said. As the independent market leader with loyal customers, the company’s revenue is steady and predictable, he added. Thoma Bravo worked with the company to improve its services, margins and productivity gains. Further, the company’s end market—education—has seen a significant boost since the recession hit.
In addition to its exit, Thoma Bravo has been an active acquirer, purchasing technology companies Flexera Software, Manatron. Inc. and Entrust. Bravo said the firm plans to continue its deal pace in 2010.
Thoma Bravo’s latest fund, Fund IX,
The Datatel deal kicked off a string of successful mid-market exits. Days after Thoma Bravo announced its sale,