Private equity boosts tech investment

Number of private equity purchases in technology sector rises

The love affair blossoming between the IT channel and private equity hit a new high in 2006, according to new figures.

Data from market-watcher ComputerWire’s Tech Finance team suggest there were 87 private equity purchases in the technology sector in 2006. This compares to 64 in 2005, 78 in 2004 and 75 in 2003.

The value of private equity-backed deals also sky-rocketed to $62.5bn, up from $11.8bn in 2003, $28.7bn in 2004 and $56.6bn in 2005.

The enterprise software sector continues to hold the most appeal for private equity houses, according to the research.

But ComputerWire also noted increased interest in IT services outfits due to their predictable revenue streams. In total, 20 services firms fell to private equity firms last year.

The news will come as little surprise to the UK channel, which has witnessed a rash of private equity-backed deals in recent months.

Oracle managed services specialist Quantix performed an MBO with the backing of private equity firms ISIS Equity Partners and Invex Capital Partners last month (CRN Online, 22 March).

Management at Dublin-based VAR Calyx are also thought to be gearing up for a private equity-backed roll-up, mirroring the recent strategies of Azzurri and 2e2 (CRN, 19 March).