TPG receives bids for Wind River

TPG has received bids for Wind River Systems, an internet-of-things software provider, people familiar with the process told Buyouts.

The firm, which started an informal auction process for Wind River in response to inbound interest in the company, received second-round bids in early August, one source familiar said.

Clearlake Capital, Francisco Partners, Marlin Equity Partners and a few other private equity firms and strategics are in the mix, the people said.

Wind River, based in Alameda, California, offers an edge-to-cloud portfolio of software products for critical infrastructure companies, including vertical software, simulation technology, DevOps and other software products. Its customers include Ford Motor Company, GE Healthcare, Honeywell, Siemens, BMW, Bosch, Toshiba, among others.

The company generated $120 million Ebitda, the people said, citing the company’s marketing materials. Businesses in this market are trading at 13x to 15x Ebitda, meaning Wind River could sell for $1.5 billion, one person said.

TPG acquired Wind River from Intel in April 2018. The funds came out of the firm’s buyout fund TPG Capital VII, which closed on $10.5 billion in May 2016.

The soft sale process kicked off when Wind River’s biggest competitor, Green Hills Software, sold a minority stake for a significant sum of money earlier this year, the sources said.

In February, publicly traded Cadence invested about $150 million for a 16 percent stake in Green Hills, according to Cadence’s announcement. “TPG saw that and they saw that they can make a nice tidy return by selling [Wind River] quickly,” one person said.

The significant price for a minority stake spiked interest in Wind River, which then received a number of inbound requests, the people said.

TPG has not formalized its sale mandate with a banker yet, but is engaged in advanced talks with one, according to the sources. Headquartered in Fort Worth, Texas, and San Francisco, TPG invests in technology, consumer, real estate, healthcare, financial services and other market segments. It manages more than $108 billion in assets.

TPG and Clearlake declined to comment. Wind River, Francisco Partners and Marlin Equity Partners did not return request for comment before press.

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