Sema Blog

Case Notes: Private Equity

Posted by Matt Van Itallie on May 25, 2019 5:36:29 PM
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Bain’s 10th-anniversary Global Private Equity Report once again takes in the entire industry, highlighting specific strengths and flagging challenges and opportunities.

In last year’s report, Bain urged PE firms to increase a 10 percent share of the 40,000-plus M&A deals done globally each year. That is a tall order. And Hugh MacArthur, Bain’s Boston-based Head of Global Private Equity, says this year’s report focuses on “exciting topics such as advanced analytics, which speeds insight in both diligence and post-close value addition”.

Actionable analytics are going to change the world of private equity, say experts. And we couldn’t agree more.

Our solutions have now been called upon by some of the world’s leading software-focused private equity firms--including over half of the Pitchbook Top Nine, for M&A and for ongoing portfolio improvements.

Here are just a few of the remarkable results our team has logged recently. A PE client asked Sema to help a portfolio company assess developers working with an offshore development partner. Not only did our data match their own in areas they had been tracking limited metrics, the metrics are getting rolled out across the portfolio given the accuracy and depth, tunability and non-intrusiveness of our solution.

In another recent example, the PE firm and “platform” acquirer used Sema to assess a potential tuck-in’s codebase, despite some initial reluctance. The persistence paid off--Sema not only presented a clear and comprehensive overview of the technical debt, and identified fundamental process and productivity improvements, it also uncovered a data security flaw.

Finally a third private equity firm called on Sema to help make sense of code created by contributions from multiple development partners, as well as that contributed via a new acquisition. The codebase review helped the company identify a key member of the diverse development team and highlighted weaknesses introduced by the previous partner development process.

Clients have told us there are several reasons they have taken to Sema so quickly—these include:

  • Total transparency: Sema’s solutions match the levels of transparency that PE firms insist upon throughout their business, including finance, sales and customer support. The same insight and scrutiny can be brought to bear on software quality and development.
  • Pain-free onboarding: Taking just an hour, Sema’s non-intrusive onboarding matches the increased pace of the PE industry, both in terms of ongoing improvements and general M&A strategies. We know the pace of change never lets up.
  • ROI sooner, rather than later: Sema works with time horizons measured in months and years; CEO, CTOs and—just as importantly—CFOs don’t have to wait decades before they see profitable results.
  • The “Edge”: The stakes are high. Private equity firms seek out every “edge” they can leverage so they can minimize risk and maximize the value of transactions. This is true both when they are buying (to understand the size of potential technical debt, for example) and selling (to demonstrate—with objectivity—which improvements the portfolio companies have made since the previous acquisition).

 

Are you also looking for an edge? Find out how Sema can help transform software maintenance and allow your organization to stay focused on a successful and profitable future. Book a free demonstration, email us at info@semasoftware.com or call us now on 1-202-309-8703.

 

Topics: equity, hedge fund, angel investors, venture capital, venture capitalist, private equity firms, leveraged buyout, investing, equity trust