Software PE specialists lead tech M&A in 2019

Vista Equity and Insight Partners struck 22 tech deals each through December.

Private equity posted another strong year in tech M&A, led by software-focused investors Vista Equity and Insight Partners.

In sponsor-to-sponsor activity, $591.3 billion was exchanged across 2,601 technology transactions in 2019, PitchBook data shows.

Vista and Insight outpaced other tech-focused PE shops with 26 sponsor-to-sponsor transactions each, according to PitchBook. Runners-up included TA Associates, Thoma Bravo and Providence Equity, wrapping up the year with 22 transactions each.

Other active tech investors in 2019 were GI Partners, Carlyle Group, Accel-KKR, LLR Partners and Genstar Capital.

The industry’s largest transactions included several take-privates, with the software and healthcare tech and payments segments particularly active.

2019’s largest PE-sponsored tech deals included:

  • Hellman & Friedman’s $11 billion take-private of Ultimate Software, a human capital management software company
  • The $5.38 billion take-private of data and analytics company Dun & Bradstreet by CC Capital, Cannae Holdings and Thomas Lee Partners
  • Veritas Capital’s $5.9 billion take-private of healthcare technology company Athenahealth
  • Bain Capital’s investment in Parthenon Capital Partners’ $5.7 billion merger of healthcare fintech companies, Zelis Healthcare and RedCard
  • Thoma Bravo’s $3.7 billion take-private of Ellie Mae, a software company that processes mortgage applications
  • Apollo Global Management’s $2.7 billion take-private of Shutterfly, a photography and image sharing company
  • EQT’s and Canada Pension Plan Investment Board’s $2.7 billion acquisition of healthcare payments company Waystar Health
  • Vista Equity’s $1.94 billion acquisition of Apptio, a business management software company

While the artificial intelligence, robotics and payments verticals continued gaining traction among PE investors as businesses mature, those within TMT, Software-as-a-Service and HealthTech proved most popular in 2019.

Top 10 PE tech verticals in the US by deal value
Verticals Deal value ($bln) # of deals
TMT 81.4 715
SaaS 46.6 305
HealthTech 13.4 61
HR Tech 11.1 30
FinTech 9.1 77
Mobile 8.1 92
Digital Health 6.5 17
AIML 4.9 33
B2B Payments 4.6 7
Robotics and Drones 4.5 7
*As of 11/25/2019

 

William Blair won more sponsor mandates than any other investment bank in 2019, advising on 22 sponsor transactions in the tech industry this year. Raymond James and Houlihan Lokey followed with 21 and 18 advisory roles, respectively.

Top 10 advisors on PE-sponsored tech deals in the US by deal count 
Advisor # of deals
William Blair & Company 22
Raymond James Financial 21
Houlihan Lokey 18
KPMG 16
Canaccord Genuity 14
Harris Williams 14
Evercore Group 12
Lazard 12
The Goldman Sachs Group 12
Robert W. Baird & Co. 12
*As of 11/25/2019

 

Action Item: Check out Vista Equity’s recent form ADV