Vista Equity Partners went aggressive to win the auction of Black Mountain Systems, sources said.
Stone Point Capital put Black Mountain up for sale around March, a person said. Jefferies advised on the process, Buyouts reported in April.
The Black Mountain auction was not a broad process but was targeted to select sponsors and strategics, the person said. The auction featured details of an M&A process in a highly competitive market: fireside chats with bidders, where potential buyers hold informal discussions with companies, before books were sent out in the spring.
Vista then opted to preempt the auction, sources said. The Austin buyout shop presented a proposal where it was prepared to sign a definitive agreement for Black Mountain three to four weeks ahead of final bids, the source said.
This tactic aimed to give Vista the upper hand, even though Stone Point held discussions with other bidders, sources said. In fact, Fidelity Information Services was still conducting due diligence when Vista announced its buy of Black Mountain on May 29, a different source said.
Vista ended up paying about $440 million for Black Mountain, three people said.
Black Mountain develops data and process management software for asset managers and financial institutions including banks, hedge funds, private equity and investment managers. Customers include Bain Capital, Barrings, Carlyle Group and KKR, the firm’s website shows.
Stone Point acquired the company in 2015. With the sale, the New York buyout shop exited its investment.
The private equity firm founded by Robert Smith isn’t a stranger to using aggressive tactics. Vista launched a preemptive bid for eFront, the source said.
Bridgepoint, the U.K. private equity firm, put eFront up for sale earlier this year, hiring Credit Suisse and Morgan Stanley to run the process, Buyouts reported in March. Efront provides software for the alternative-investments industry, specifically PE firms and limited partners. Bridgepoint is the parent of PEI Media, which acquired Buyouts Insider in April. BI’s brands include Buyouts and VCJ magazines and PEHub.com.
Vista, despite its preemptive offer, didn’t win eFront. BlackRock, the world’s biggest asset manager, ended up buying eFront for about $1.5 billion. Vista “is sometimes successful” when it preempts, the source said.
Jefferies declined comment. Executives for Vista, Bridgepoint, Stone Point and Black Mountain couldn’t be reached for comment.
Thomas Wilson, Michael Long and Patrick Bailey of Jefferies provided financial to Black Mountain, while Kramer Levin Naftalis & Frankel was the company’s legal adviser.
SunTrust Robinson Humphrey was financial adviser to Vista, while Stuart Casillas and Abtin Jalali of Kirkland & Ellis served as Vista’s attorneys.
Action Item: For more on Black Mountain, call CEO Andy Horwitz at +1 858-866-8989