6 December, 2016 /Woori BMO Group/ Woori BMO Group’s wealth management executives have reported that Kohlberg Kravis Roberts was among the first in an increasingly competitive world of investors throwing capital into the technology industry. And with an almost $2 billion deal, from the past year, the acquisition giant will expand its multibillion-dollar flurry of activity.
“On Tuesday, KKR announced its acquisition of Optiv Security, a cybersecurity services provider, adding the purchase of the cloud-based software company Epicor and the call-centre software maker Calabrio to a list of deals over the last five months,” reported Christian Harper, Director of EMEA Wealth Management at Woori BMO Group.
Although the American private equity firm has had a technology investment practice for decades — George R. Roberts, a co-founder, has long been headquartered in Menlo Park, California, in the heart of Silicon Valley — in recent years the company has built up its footprint in that market.
Having previously excluded these transactions from its balance sheet, it is in the process of closing its first fund devoted to so-called growth investments — in big and more mature tech start-ups. (These contributions included the Sonos speakers and the daily FanDuel gaming site.)
“CKR. The leveraged buyouts for the likes of Epicor have started to hit. And it is increasingly investing in publicly traded companies, acting as a manager-friendly lender.
“We’re trying to be on the attack” Herald Chen, a co-head of tech practice at KKR, said in a phone interview.
Chen said that KKR is looking, above all, for companies seeking international growth, so that it can help them find and finance their acquisitions.
Even as the field of investors in tech firms has grown more crowded — from traditional venture capital firms and leveraged-buyout specialists to more unusual entrants, such as the Japanese tech giant SoftBank — Mr Chen said his company had no trouble finding new investments.
Following a series of high-profile security breaches at corporations and government agencies, KKR’s deal for Optiv would see it take over a company that operates in a sector of enormous growth.
Optiv was formed in 2015, with the merger of two providers of cybersecurity, Accuvant and FishNet Security. The resulting company originally sold cybersecurity tools, but since then it has extended its offerings to provide consulting services for defence.
“Optiv, which had sales of $947.3 million in 2015, filed confidentially last year for an initial public offering and announced the plans last month. Yet Mr Chen said that Optiv’s bankers had contacted KKR early last month about the prospect of purchasing the firm,” said Andrew Williams, Director of Institutional Equity at Woori BMO Group.
The company is owned by a group of investors, including the Blackstone Group that would retain a minority stake in the company.
“We came away saying this forum was very, very cool,” Mr Chen said. “We were marketing cybersecurity tools and equipment and applications, so they’re seeing all the possible risks as they’re in the process of delivering one of those devices.”
The deal should be closed in the first quarter of next year.