Thoma Bravo Launches $400M Fund For Bigger Deals

Thoma Bravo, which has offices in Chicago and San Francisco, disclosed in a regulatory filing that it is seeking $400 million for a vehicle called Thoma Bravo Special Opportunities Fund I LP. The filing showed that the firm has not yet held a closing for the fund, and no placement agent is listed.

The firm has been investing from Thoma Bravo Fund X LP, a $1.25 billion vehicle that closed in February 2012. The firm’s website says it usually writes equity checks for at least $25 million and as large as $200 million or more. One person with knowledge of the fundraising called the new vehicle an ”overage” fund, used to co-invest in larger investments that the main fund is undertaking.

Such a special vehicle could be useful, based on the firm’s most recent transaction. Thoma Bravo and the tax-software developer Intuit Inc. announced July 1 that the firm would pay $1.025 billion for Intuit Financial Services, a provider of hosted Internet banking services to community banks.

At a 35 percent equity contribution, fairly typical for large deals, the check for IFS would be in the $350 million range. (Tech deals sometimes call for a lower equity contribution, as sister website peHUB has reported; Bain Capital and Golden Gate Capital are apparently putting up only 14 percent of the purchase price in their announced $6.9 billion deal for BMC Software. But as peHUB also reported, tech companies often have cash on their balance sheet to help finance their own take-private; it is unclear whether any such cash would be available for a carveout such as that of IFS.)

While multi-strategy mega-firms commonly raise distinct funds for individual regions or industries, such as investing in China or in the energy industry, the multi-fund approach is less common in the middle market, although some firms do employ it.

Catterton Partners of Greenwich, Connecticut, for instance, employs a dual fund strategy, segregating its investments by deal size within its specialized niche of consumer and retail companies. Likewise, The Comvest Group, a West Palm Beach, Fla., buyout shop that primarily focuses on turnarounds, has raised two funds for its alternative strategy of investing in the debt of small growth companies.

Other firms use specialty funds as a way to invest in companies that otherwise might be too risky or off-course for their core funds. Aurora Capital Group, for one, closed its Aurora Resurgence Fund LP in 2008 to invest in distressed debt, and the venerable American Securities LLC, which grew out of the family office founded in 1947 by William Rosenwald to invest and manage his share of the Sears, Roebuck & Co. fortune, is in the market now for its third American Securities Opportunities Fund, which has a $750 million target to invest in the debt and equity of companies in operational or financial distress.

Thoma Bravo declined comment on its plans for the special opportunities fund or for IFS, even including the future name of the business. Before Intuit acquired it for $1.33 billion in February 2007, the company was known as Digital Insight Corp. At the $1.025 billion price, the unit appears to have been marked down roughly 23 percent; community banks were hit hard by the financial crisis that began in 2008.

For its part, Intuit said it was selling IFS, plus a separate unit, the Intuit Health Group, to refocus its operations on its core tax-preparation business, including TurboTax software as well as the consumer and small-business financial management programs Quicken and QuickBooks. The company also plans to expand its services to accountants. Intuit is retaining an online personal finance manager called Mint.com, but another online PFM called FinanceWorks developed initially by Digital Insight will go to Thoma Bravo.

The IFS deal, announced on July 1, came just a week after Thoma Bravo announced a separate deal to acquire Keynote Systems Inc. in an all-cash transaction valued at approximately $395 million, or $20 per share for the company’s public stockholders. Keynote, based in San Mateo, California, provides online performance management monitoring of corporate websites.