privateequity

Vista Equity Sells a Minority Stake in Itself

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July 16, 2015

 

The private equity firm, Vista Equity Partners, has announced it is selling a bit fewer than 20% of its own operations. The buyer is a consortium led by Neuberger Berman’s private-equity unit, Dyal Capital Partners. What’s next for the firm?

 

The Deal

 

According to the official press release, Dyal Capital Partners and the other investors are making the minority investment in the private equity firm to allow the firm to continue its expansion plans. The investment is going to be used “to deepen its network of global investors, to expand its product offerings and to scale its business”.

 

According to the Wall Street Journal, the private equity led consortium is buying a stake, which represents less than 20% of the company. The investment will see the private equity firm valued at $4.3 billion, according to the news agency’s sources.

 

Furthermore, the sources reported that Dyal together with the other investors would be able to share the private equity firm’s management and performance fees.

 

Part of Dyal’s Recent Strategy

 

The buyout fits well into Dyal’s recent strategy. Earlier last year, the company bought a 10% stake in Jonathan Nelson’s Providence Equity Partners. The financial details of the deal were undisclosed at the time. On top of that deal, the company recently acquired a 20% stake in Jana Partners, the hedge fund company. Furthermore, the company is currently investing in 12 minority partnerships similar to the one now with Vista Equity.

 

The head of Dyal Capital Partners, Michael Rees, commented on the Vista Equity deal in the official press release by stating, “Given the unique platform that Vista offers and the strength of the management team, we believe that the partnership between our businesses provides tremendous opportunities to both Dyal and Vista”.

 

Vista’s Future Vision

 

The private equity firm currently has around $14 billion worth of assets in its portfolio. It has been the most aggressive in the field of computer software development. In the past 24 months, it has made a number of high-profile buyouts. The most notable deal was the $4 billion purchase of Tibco Software.

 

Furthermore, last month the firm made its latest acquisitions of majority stakes in both Mediaocean, the software supplier to advertising agencies, and Pearson’s PowerSchool business, the student information provider.

 

The founder, chairman and CEO of the private equity firm, Robert F. Smith, said in the official press release, “Dyal and its parent, Neuberger Berman, will be great strategic partners for Vista, as we continue to take advantage of the growing investment opportunities in the software, data and technology-enabled services sectors.” Mr Smith went on to state, “Vista remains committed to the same proven investment and operational formula that has made us successful”.

 

It is likely the company will use much of the capital to invest in its existing funds, as well as to provide funding for future purchases. The firm is typically committed to finding long-term investments to provide value for its investors. As the firm has been so active in recent months, it is likely it’ll continue to look for new acquisitions, as the technology sector remains lucrative.

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