Thoma Bravo Nears $3.7 Billion Deal for Calypso Tech

Thoma Bravo is nearing a deal to buy Calypso Technology Inc. in a transaction valuing the financial software provider at as much as $3.7 billion, people familiar with the matter said.

The technology-focused private equity firm could announce an agreement as soon as next week to acquire Calypso from Bridgepoint and Summit Partners, the people said, asking not to be identified discussing confidential information. The sale price is much higher than initial expectations that Calypso would fetch around $2 billion, the people said.

Calypso provides trading and risk management software to more than 180 financial institutions, according to its website. The company employs over 800 staff globally. Bridgepoint and growth equity investor Summit paid about $800 million to acquire Calypso in 2016, one of the people said.

The owners brought in new management, invested in research and development and moved Calypso to a subscription-based business model. Such companies have been a favorite of Thoma Bravo as they provide a steady, recurring revenue source. Thoma Bravo typically makes light-touch operational tweaks to the companies it buys, keeping management in place as it focuses on growth over cost-cutting.

Representatives for Bridgepoint and Thoma Bravo declined to comment, while spokespeople for Calypso and Summit didn’t immediately respond to requests for comment.

A sale would add to what is already a bumper quarter for software transactions globally. Deals valued at more than $116 billion have been announced by companies in the sector this year, according to data compiled by Bloomberg. That’s up 60% on the same point in 2020, the data show.

Private equity firms have been heavily involved in the dealmaking. In January, Montagu Private Equity agreed to take over ITRS Group Ltd. from TA Associates in a deal valuing the British enterprise software developer at about $700 million, Bloomberg News reported at the time. TA Associates is itself now in advanced discussions to acquire Unit4 NV, the enterprise software company owned by Advent International, for more than $2 billion, people familiar with the matter said this week.

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