Francisco Partners wants to be the patron saint of companies at a crossroads. The company invests in public and private technology companies that are past their start-up stage, but are at a transition point such as a management change or a merger. It works closely with venture capital firm Sequoia Capital to identify possible investment targets. Founded in 1999, Francisco Partners has raised some $7 billion in committed capital; typical investments range from $50 million to $2 billion per transaction. Its portfolio includes stakes in some 50 companies such as Blue Coat, GXS, QuadraMed, and WebTrends. Founder David Stanton previously led tech investing for Texas Pacific Group from 1994 to 1999.
Francisco Partners operates from offices in San Francisco and London.
Francisco Partners focuses on the hardware systems, semiconductors, components, software, and services sectors. It specializes in growth equity investments, divisional buyouts, and going-private transactions. An active investor, it provides strategic and financial counsel to its portfolio companies, with the goal of helping them rejuvenate or reposition for growth. It closed its third middle-market technology fund in 2011 with some $2 billion of committed capital.
Going hand-in-hand with buying is divesting mature investments. For instance, in 2012 it sold the Quantim division of the QuadraMed investment to Nuance Communications, and in 2013 it sold fleet management firm NexTraq to FleetCor Technologies.
Mergers and Acquisitions
Acquisitions in 2013 largely focused on health care, including buys of electronic health record (EHR) firm NextTech and pharmacy software provider McKesson Automation. In 2012 it purchased care management firm Therapeutic Research Center.
Also in 2012 Francisco Partners bought Ichor Systems, a maker of process tools, gas delivery modules, and chemical delivery modules. The previous year, the company acquired control of business software firm eFront and teamed with Golden Gate Capital and Thoma Bravo (through their Attachmate venture) to acquire network systems firm Novell.
Acquisitions in 2010 included EF Johnson Technologies, a maker of radio-security systems, and Source Photonics, which makes optical communication components. Also that year, portfolio company Specific Media made a splash when it acquired social media website Myspace from News Corp.
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