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Carlyle buys back Unison, finding comfort in business resilience

While Carlyle is now coming in at a much higher valuation, the investment is logical from a risk-adjusted perspective and considering Unison’s growth potential, says the firm's Michael Gozycki.

Carlyle Group has clinched its first post-covid investment out of its new flagship buyout fund, finding conviction in a company the firm owned once before.

Carlyle acquired Unison, a procurement, supply chain and contract management software provider to federal government agencies and government contractors. The firm first invested in Unison 15 years ago. The company’s management team invested in the company alongside Carlyle.

Unison, based in Dulles, Virginia, provides software that allows government entities to buy goods and services for their various agencies. The company allows procurement officials to acquire those goods and services, as well as provides transparency and compliance with federal acquisition regulations through software automated workflows.

The business has proven resilient during the economic downturn, making it an attractive asset to own again and continue to grow, Michael Gozycki, managing director at the firm, told PE Hub.

Unison has a subscription model and is highly recurring in nature, said Gozycki: “If you combine the resiliency of the end market and the resiliency of the business model it gave us a lot of comfort.

“It just felt like a very safe investment where we can bring Carlyle’s resources to bear.”

Carlyle previously owned the company between 2005 and 2010. Carlyle exited its investment through a sale to JMI Equity, which subsequently held Unison for five years through its 2015 sale to Abry Partners.

Now, said Gozycki, if he had to pick one business to own in the covid world, it’s Unison.

“In this era of covid, having the benefit of working with the same exact team we worked with between 2005 and 2010 – that just goes a long way [with respect to] our comfort level, our conviction,” the investor said.

While Carlyle is now coming in at a much higher valuation, the investment is logical from a risk-adjusted perspective and considering Unison’s growth potential, Gozycki said.

The business has consistently grown in terms of both revenue and profitability, according to the investor. The firm also plan to scale and support the company through further acquisitions that reinforce Unison’s current market position or give it a foothold in adjacencies such as government contracting, Gozycki said.

Carlyle has been active in the technology space as of late.

The firm recently invested in ZoomInfo, a publicly traded software company. Carlyle also sold Eggplant Software, making an attractive return on its investment.

Technology, media & telecom investments represent Carlyle’s largest sector by capital deployed, with $32 billion invested across 279 deals globally, sources familiar with the firm told PE Hub.

Carlyle’s investment came out of Carlyle Partners VII, an $18.5 billion fund that makes majority and strategic minority investments primarily in the US. The fund closed in July 2018.

Action Item: Read about Carlyle’s return on Eggplant Software’s sale.