Private Equity Returns to Take-Private Software Deals

Cheaper debt and depressed mid-cap multiples have reopened a market that stalled in 2023.

David Canel spent the past week talking with founders, investors and operators close to private equity, most of whom asked not to be named because the conversations were private.

What separates this from previous cycles is the composition of the capital. Crossover funds that retreated in 2023 are back, but they write structured checks with preferences and ratchets that never appear in a headline valuation.

The interesting number is not the total but the concentration. A handful of buyers and a handful of funds account for most of the movement, which makes the market look healthier in aggregate than it feels from inside a cap table.

Competitors are watching closely. At least three companies in acquisitions have adjusted pricing in response, and more announcements are expected before the quarter closes.

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