Software Turnaround/Distressed Buyout Strategy?
Curious if anybody is familiar with any funds which do distressed/turnaround software buyouts. I understand there likely isn't a big market for this, and players like Thoma Bravo already buy EBITDA neutral software to improve.
STG (Symphony Technology Group)
Francisco Partners (to some extent)
Believe Vector does mostly value oriented software / technology investing.
Diversis Capital in LA
Siris - Don’t know if it’s distressed as much as it is value/deep value oriented
That's one of the hardest strategies to get right. I call it "shit growth". Basically it's where a lower mid market business is only growing 5-10% each year but is also burning cash. Very hard to re-accelerate growth while also managing burn. You often buy these companies for sub 1x LTM revenue and it involves a shit ton of work and restructuring the capital structure, inserting liq prefs, draining the esop and firing management, and trying to convert the dev/product to much more efficient code. Not worth it IMHO given rate of failure.
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