A strategy focused on creating strategic assets
Since its inception, Thoma Bravo has built its strategy around a focused approach: acquire B2B software leaders in various segments, improve their operational performance and turn them into first-class assets. This philosophy is based on a fundamental principle: "If you buy companies proactively, improve them significantly, you end up with assets of great value to strategic acquirers. That's our model," explains Orlando Bravo.
Thoma Bravo's model is distinguished by its willingness to speak directly to potential acquirers, right from the early stages of transformation of the companies it owns. "You simply have to call them and be proactive," he stresses. This approach enables the firm to ensure that the companies in which it invests meet relevant buyers capable of seizing their potential.
Large software companies attract strategic buyers
The market for strategic buyers in the software sector is particularly dynamic. However, as Orlando Bravo points out, these buyers are looking for very specific company profiles, combining significant scale, strong profitability and sustained growth. These criteria are far from being met by the majority of companies in the sector, which explains why the assets transformed by Thoma Bravo are so sought-after.
"There are very few software companies that meet the requirements of large strategic groups in terms of scale, profitability and growth. But those that do are becoming prime targets," explains Bravo.
Another key factor in the interest of strategic acquirers is available cash. Today, major software companies have some $1.4 trillion in cash on their balance sheets. These colossal sums enable them to make large-scale acquisitions, in particular to strengthen their position in strategic markets.
Acquirers beyond the software sector
Contrary to popular belief, the buyers of large software companies are not just technology companies. Many manufacturers from a wide range of sectors are looking to strengthen their digital capabilities by acquiring off-the-shelf software solutions.
Orlando Bravo cites an emblematic example: "In France, Thales, the major French conglomerate, recently bought Imperva, one of our companies specializing in cybersecurity." This acquisition illustrates the current trend: players from sectors as diverse as aerospace, defense and financial services are investing heavily in software technologies to boost their competitiveness.
A unique opportunity for private equity
This dynamic opens up unique prospects for private equity managers like Thoma Bravo. The ability to improve the performance of software companies, coupled with a rapidly expanding market of strategic acquirers, creates strong added value.
In short, Thoma Bravo proves that major acquisitions in the software sector can not only generate attractive returns, but also offer strategic exit opportunities far beyond traditional IPOs. "That's the beauty of private equity: buying, transforming and selling. That's what we do, and we do it with first-class assets," concludes Orlando Bravo.
