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Private Equity-Backed Buyout Deals in the I.T. Sector

by Kouji Sonobe

  • 09 Jun 2011
  • PE

Preqin’s Deal Analyst data shows that private equity-backed buyout deals within the Information Technology (I.T.) sector have reached their highest levels following the financial crisis towards the end of 2007. The second quarter to date has seen 70 deals announced, with an aggregate value of $7.7 billion. This represents a 22% and 28% increase in the number and aggregate value of deals announced in the second quarter of the previous year, respectively.

Examining private equity-backed buyout I.T. deals by region illustrates a growth in deal-making in recent times, with North America and Europe displaying an increase in both the number and aggregate value of deals announced. For the second quarter to date, North American I.T. buyouts have seen a 21% and 60% increase in the number and aggregate value of deals in comparison to the same quarter last year. Europe has also seen a significant uptick, with a 55% and 30% rise in the number and aggregate value of I.T. deals announced. Despite this, I.T. buyout deals announced in Asia and Rest of the World have seen a marked decrease, with both the number and aggregate value of deals announced falling by more than 70% in comparison to the previous year.

Notable I.T. private equity-backed buyout deals from the past few years include the $2bn add-on acquisition of Lawson Software by Infor Global Solutions, a portfolio company of Golden Gate Capital in April 2011. Infor Global Solutions was acquired by Golden Gate in a secondary buyout transaction back in June 2006. Other buyout deals include the $2.2bn add-on acquisition of Novell Inc. by AttachmateWRQ, a portfolio company of Francisco Partners, Golden Gate Capital and Thoma Bravo in November 2010 and the acquisition of a majority stake in Skype by an investor consortium led by Silver Lake for $1.9bn in September 2009. It was announced in May this year that Microsoft Corporation would acquire the firm for $8.56bn.

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