New Mountain unloads Sparta Systems in $1.3bn deal, GTCR’s Cedar Gate Technologies remains hungry for more growth

New Mountain is selling Sparta Systems to Honeywell for $1.3 billion.

Morning!

I didn’t think the day would come, but alas, it feels pretty quiet out there on the deal front!

I, Sarah, am off the rest of the year, so I wish you a safe and relaxing holiday in this most challenging of years – even if that means spending your staycation on the couch with some eggnog or Dos Equis. I hope to see at least one or two of you beyond the Zoom screen in the New Year!

Now, on to the news. New Mountain Capital is ending 2020 with not one roughly $1 billion dollar exit, but two. On the heels of its agreement to sell Cytel to Nordic Capital and Astorg, the New York firm is selling another portfolio company that sits within the crosshairs of life sciences and technology.

NMC is selling Sparta Systems for $1.3 billion in cash to Honeywell. Sparta is a provider of enterprise quality management software for pharmaceutical, medical device, and consumer products industries. It’s flagship product, TrackWise, is used by 35 of the top 40 pharma companies and 13 of the top 15 medical device manufacturers, NMC states on its website.
Sparta since NMC’s 2017 investment has increased its SaaS customer base by two-and-a-half times, the news release said. Read PE Hub’s brief on the deal.

Growth mode: I recently got the chance to chance to catch up with Sean Cunningham at GTCR on the heels of Cedar Gate Technologies’ acquisition of Deerwalk – its second of the year.

Although the firm teamed up with former Medco chief David Snow in 2014 to form the healthcare data and analytics platform, examining what a potential exit path looks like is not top of mind.

Part of the reasoning: strong end-market tailwinds persist, including the continued transition to value-based care, which Cedar Gate helps facilitate for payers through its various tools and technology. At the same time, the platform launched its own internally-developed SaaS analytics tool in 2016 – two years before clinching an acquisition.

Providers with VBC-models have thrived and proven more sustainable through the pandemic, adding fuel to a trend already in flight. “More and more healthcare spend is adjudicated under value-based care. That didn’t really exist, or was nascent [at the time of our initial investment],” Cunningham said. Read my full story here.

That’s it for me today. If you’ve got any juicy tips or news to share before you call it quits for 2020, write to me at springle@buyoutsinsider.com or find me on LinkedIn. Otherwise, I’ll see you in the New Year!

Note to Readers: It’s that time of year … for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.

Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.

If you have additional questions, email Private Equity Editor Chris Witkowsky at cwitkowsky@buyoutsinsider.com.