GTCR has made a $1.3 billion minority investment in Tricentis, a software developer specializing in enterprise application testing, valuing the company at $4.5 billion, including debt.
The deal comes after majority owner Insight Partners explored a variety of options including a sale of Tricentis, a process Reuters reported on in September. Insight Partners first invested in the company during a Series B funding round in 2017 that raised $165 million.
The deal comes on the heels of a robust Q3 for software investments.
PitchBook’s Q3 2024 US PE Breakdown highlights software as a key driver of the tech sector’s rebound, with $90.4 billion in deal value recorded in the first three quarters of the year—representing a 33% YoY increase. The sector’s strong volume growth signals a promising finish for Q4.
Chicago-based GTCR, which predominantly focuses on buyouts, noted that it also has the flexibility to invest through different structures and at different sizes, depending on the opportunity.
“We have invested in similar co-control situations before, so this was a natural extension of our capability to provide constructive capital and also bring to bear our value-add approach and deep technology expertise,” Nelson Iginla, principal at GTCR, shared in a statement.
Founded in 2007 and headquartered in Austin, Texas, Tricentis provides an AI-powered platform for software testing, enabling enterprises such as Dell, Guardian and Kimberly-Clark to improve software efficiency.
By year-end, Tricentis expects over $425 million in annual recurring revenue, reflecting approximately 27% YoY growth.
Evercore acted as the lead financial advisor to Tricentis, alongside JPMorgan and Bank of America. Legal advisors included Willkie Farr & Gallagher for Insight Partners and Tricentis, and Kirkland & Ellis for GTCR.
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