DFW Capital puts SoftWriters on the block

DFW Capital Partners, which is currently out fundraising for its fourth fund, has put SoftWriters up for sale, banking and private equity sources said.

Teaneck, N.J.-based DFW, which invests in lower middle market companies, has tapped Baird to run the process, two persons said. Alison Park, Pa.-based SoftWriters provides software for the institutional pharmacy industry. It’s unclear how much DFW is seeking for SoftWriters.

However, the winner of the auction may be TA Associates. An FTC filing dated Aug. 23 reveals that the PE firm is investing in SoftWriters.

DFW acquired a controlling stake in SoftWriters when it recapitalized the company in April 2009. The investment came from its third fund, DFW Capital Partners III L.P., which closed in 2010 with $54.1 million in commitments. DFW, at the time, also received a significant amount in co-investments from LPs, a person with direct knowledge of the matter said.

The PE firm is currently out fundraising for its fourth pool, according to sources and SEC filings. DFW’s fourth fund has a $150 million target and a hard cap of $160 million, said one source. The firm has raised a little more than $100 million, SEC filings indicate, which means it is two-thirds of the way to its $150 million total. The fourth fund, including co-investments, has roughly the level of capital raised with Fund III, the source said.

DFW makes controlling investments in companies with EBITDA of less than $10 million. The firm focuses on sectors such as healthcare, business services and industrial services, according to the DFW website.

Dow Jones LBO Wire reported news of DFW’s fundraise in December.

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