TA to make 3X its money on sale of Flexera to Thoma Bravo

Flexera’s EBITDA has about doubled to around $200m since TA invested in the IT infrastructure software business in 2017, sources said.

TA Associates is set to make three times its initial investment on the sale of Flexera Software after a three-year hold, sources familiar with the deal told PE Hub.

Thoma Bravo, once an owner of Flexera, has acquired a majority stake in the software company for the second time at a nearly $2.9 billion value, the people said. Ontario Teachers’ Pension Fund is also a selling investor in the transaction alongside TA.

As part of the deal, announced on December 3, TA and Ontario Teachers will retain a significant minority stake.

Flexera, based in Itasca, Illinois, provides IT infrastructure software, including technology insights, spend optimization and agility, to IT business executives. The company’s Revenera division provides solutions that help technology companies build better products, accelerate time to value and monetize what matters.

The exit provides a significant return to both TA, and presumably, Ontario Teachers. Sources told PE Hub that TA is set to make 3x its money on its stake sale; and while Ontario’s return is unclear, its investment dates back further by about six years.

In December 2017, TA acquired a stake in Flexera from Ontario Teachers, becoming an equal shareholder in the company. At that time, Ontario Teachers’ had already been backing Flexera for six years. Ontario Teachers’ investment in the IT management company dates back to 2011, when it acquired a majority interest in Flexera from Thoma Bravo.

Over the past three years, TA, along with Ontario Teachers, have nearly doubled Flexera’s EBITDA, sources told PE Hub. Flexera’s EBITDA grew from nearly $100 million at the time of TA’s investment in 2017, to around $200 million at the time of Flexera’s sale to Thoma Bravo earlier this month, they said.

Financial terms weren’t disclosed in the recent announcement, but the sale valued Flexera between $2.8 billion and $2.9 billion, the people said.

Even though the firm is purchasing Flexera for a much higher price than it once sold it for, the opportunity to own the business again is attractive, nevertheless. The second time around, Thoma Bravo plans to grow Flexera through significant M&A, the sources said.

TA Associates and Thoma Bravo did not return PE Hub‘s requests for comment.