GI Partners bets on public sector’s digital transformation; off-duty with Grafine’s Elizabeth Weymouth

GI agrees to take GTY private.

Happy Friday, Hubsters. MK Flynn here with the Wire.

Let’s kick things off with a software deal.

Digital transformation. GI Partners just announced a take-private deal for GTY Technology Holdings, which provides cloud-based software for state and local governments.

The move comes as the public sector begins the early stages of digital transformation.
“We at GI believe GTY has developed outstanding products across its segments and a well-earned reputation for quality and innovation,” said Travis Pearson, managing director and co-head of private equity for GI, in today’s deal press release. “We are impressed by the team’s commitment to solve some of governments’ most pressing problems.”

“While the pandemic isn’t quite over, our team has been executing very well in this environment,” said TJ Parass, the CEO of GTY when the company released Q1 results in February. “The public sector market is improving, driven by accelerating digital transformation, improved budgets, and stimulus money all resulting in increases to our pipelines. In addition, organizations that have adopted best of breed cloud technologies like ours are successfully managing through the transition to hybrid work environments.”
GTY shareholders will receive $6.30 per share in cash upon the closing. The purchase price provides represents a 123 percent premium over the closing share price on April 28, 2022, the last full trading day prior to the transaction announcement.

Hot iron. “Private equity funds are seeking almost $1.2 trillion as investors strain to keep pace with fundraising activity,” writes Adam Le in Private Equity International‘s Q1 fundraising report. There were 3,801 funds in market seeking this combined total as of April. This compares with just $690 billion across 3,114 funds at the same point last year.

“Private equity performance has been strong in the last few years, especially in the VC and tech space – hence, GPs are looking to strike while the iron is hot,” Niklas Amundsson, a partner at Monument Group, told PEI. “Fundraising cycles have shortened, with managers coming back to the market sooner, even if they have not fully invested their previous funds. GPs [would] rather secure commitments and not start drawing fees until they start investing the money.”

Read the full report here.

Higher education. Frank Baker, founder and managing partner of Siris, and his wife, Laura Day Baker, an interior designer and philanthropist, are giving $1.2 million toward the establishment of the Frank and Laura Baker Graduation Fund for Florida A&M University students. The gift will provide funding for students who are qualified to graduate in four years but have an outstanding account balance to the university. The donation aims to support high achieving students with limited financial resources. The donation to FAMU follows the Bakers’ $1 million gift in 2020 for a scholarship for Spelman College graduates.
Other private equity firm founders who have donated millions of dollars to colleges and universities in recent years include Vista Equity Partners’ Robert F. Smith and Clearlake Capital Group’s José E. Feliciano.

Weekend reading. Buyouts’ “Off-duty” column provides a snapshot of top investors, including a few details about what they do when not chasing deals. Check out the latest installment by Kirk Falconer, featuring Elizabeth Weymouth, who launched Grafine Partners in 2019 and previously served as a partner at Riverstone Holdings.

Here’s a snippet from Kirk’s interview:

Professionally, what was your toughest moment?
In 2008, in the midst of the global financial crisis, managing the conflict between investors who did not want to receive capital calls due to portfolio liquidity issues when it was precisely the right time to invest in new opportunities created by the market dislocation.

What was your most rewarding moment?
When I decided to go out and build my own firm. It was extremely rewarding to get widespread support and advice from mentors and friends in the industry.

Read the full story.

On that note, I’ll sign off.

Wishing you a good weekend,