February 20, 2015 / 5:28 PM / 3 years ago

Exclusive: Thoma Bravo seeks top-up fund amid tech LBO bonanza

(Reuters) - Thoma Bravo LLC, the private equity firm behind some of the technology sector’s largest leveraged buyouts, is seeking more money from investors for deals, less than a year after it raised a $3.65 billion fund, people familiar with the matter said.

The new fundraising illustrates Thoma Bravo’s insatiable appetite for software makers and other technology companies, even as frothy valuations dampen other buyout firms’ enthusiasm.

Thoma Bravo is seeking $1 billion for Thoma Bravo Special Opportunities Fund II, a fund that will invest in deals alongside its main buyout vehicle, Thoma Bravo Fund XI, which completed fundraising last May, the people said this week.

The sources asked not to be identified because the fundraising process is confidential. A Thoma Bravo spokesman declined to comment.

Thoma Bravo has been one of the most prolific acquirers of technology companies in the United States, including publicly listed ones, at a time when rivals are shying away from such ‘take-private’ leveraged buyouts.

In December, it joined the Ontario Teachers’ Pension Plan in purchasing network equipment maker Riverbed Technology Inc for $3.6 billion, and completed a $2.4 billion acquisition of software maker Compuware Corp.

More such publicly listed technology companies are up for sale. Enterprise software maker Informatica Corp is preparing to relaunch a sale process, sources told Reuters last week. Legal software vendor Epiq Systems Inc said in October it would explore going private.

Thoma Bravo also raised a top-up fund after it amassed $1.25 billion in 2012 for its previous flagship fund, Thoma Bravo Fund X. That top-up fund, Thoma Bravo Special Opportunities Fund I, amassed $500 million.

Thoma Bravo Fund X had an internal rate of return (IRR) of 32 percent as of the end of June 2014, according to the Florida State Board of Administration (SBA), an investor. Thoma Bravo Fund IX, a predecessor fund, had a 41.5 percent IRR. That compares to an overall 8.4 percent IRR for SBA’s private equity portfolio.

Based in Chicago and San Francisco, Thoma Bravo originated from Thoma & Co, which was founded in 1980 by Stanley Golder and Carl Thoma. The original firm became GTCR LLC, and in 1998 split into two firms, one of which was Thoma Cressey Equity Partners, formed by Thoma, Bryan Cressey and Lee Mitchell. It was renamed Thoma Bravo following Orlando Bravo’s promotion and Cressey’s departure.

Reporting by Greg Roumeliotis in New York; Editing by Christian Plumb

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