Carlyle To Sell OpenLink for 10-12X EBITDA In Under 2 Years–UPDATED

For the third time in its history, OpenLink Financial is being sold to a PE firm.

The Carlyle Group said Monday that it has agreed to sell OpenLink to Hellman & Friedman. Financial terms weren’t disclosed. Carlyle owned a majority of OpenLink and sold all of their stake, one source says. OpenLink management also owned a stake and is retaining a holding, the person says.

Credit Suisse and Crescent Mezzanine are providing financing for the deal. The transaction is expected to close in the fourth quarter.

UPDATE: Kevin Hesselbirg, OpenLink’s CEO, said in a statement that the company’s continued growth, which includes 40 new clients in 2010 and revenue gains of more than 20% a year since 2006, requires continued investment in resources.

“Our strategy is, and remains on track to further develop our product and service capabilities, enter new markets, and continue to pursue strategic acquisitions,” Hesselbirg said.

OpenLink’s management will stay the same, said Hesselbirg, who declined to comment on the purchase price.

Uniondale, N.Y.-based OpenLink was founded in 1992. The company develops software for the commodity, energy and financial services industries. Carlyle, in November 2009, acquired OpenLink for $480 million, sources say. The seller at that time was TA Associates which itself bought OpenLink via a $100 million refinancing in 2006.

“This company really gets swapped around,” one banker said.

Since its acquisition by Carlyle in late 2009, OpenLink’s top line revenue has grown by about 30%, a second banking source says. EBITDA has similarly increased and is believed to be around $75 million, the second banker says.

OpenLink is believed to have sold for about 10-12x EBITDA or north of $700 million, the banker says. However, another source says the company sold at the high end of that multiple and that the $700 million price tag is low.

OpenLink is a “market leader in risk technology around commodities,” a PE exec says. The company is in a growing area, and has “a great franchise and good management,” the exec says.

Earlier this year, OpenLink completed a $375 million refinancing which included paying a dividend to Carlyle, according to Thomson Reuters Loan Pricing Corp.

Hellman & Friedman, once it completes the OpenLink buy, will likely look to grow the company by acquisition. Possible candidates include Triple Point Technology, of Westport, Conn. and SolArc, sources say.

Carlyle did not use an outside financial advisor. C. Mark Kelly and Lee Rimler of Alston + Bird provided legal advice to Carlyle.

Credit Suisse provided financial advice to Hellman & Friedman. Richard Capelouto of Simpson Thacher & Bartlett was their attorney.

Carlyle declined comment. Officials for Hellman & Friedman couldn’t be reached for comment.