(Bloomberg) -- Private equity firm Apax Partners is merging three software companies serving non-profit organizations in a deal worth about $2 billion, including debt.
Apax is buying EveryAction from Insight Partners and Social Solutions from Vista Equity Partners, according to a statement Tuesday. Apax will combine them with CyberGrants, a company it agreed to acquire in June from Waud Capital Partners. Vista will keep a minority stake in the combined company, which will go through a branding process to select a new name and will have annual revenue of over $200 million.
All three companies make software used by non-profit organizations, a corner of the technology market that’s fragmented with several small players. Blackbaud Inc. is the largest public company in the space with a market value of $3.4 billion.
Stu Trevelyan, chief executive officer of EveryAction, will lead the combined company, which will have a network of 650,000 non-profits, half the Fortune 500, and over 38 million donors and volunteers.
Trevelyan said that some non-profits focused on pandemic relief and racial justice have seen an increase in donations, while others were hurt by big fundraising events being canceled. EveryAction’s clients include the United Nations Foundation, which sponsored the official Covid-19 respond fund with the World Health Organization and the NAACP.
Each of the companies has a different specialty. EveryAction helps organizations raise money and keep track of donors, while Social Solutions makes case management software that helps non-profits measure the impact they’re having on people they’re serving. CyberGrants helps employers match worker donations to causes.
Apax Partner Jason Wright said in an interview that the investment fits in the trend of social impact and environmental, social and governance initiatives, which have become a priority for employees and companies.
While Apax isn’t disclosing how much each company is worth, Wright said that EveryAction is the largest investment, followed by Social Solutions and CyberGrants.
All three companies’ sales are growing in the high-teens percentages, he said, hinting that the merged company could go public one day.
“Right now, it’s premature to contemplate whether the company will one day be a public company. But, if it were to go down that path, it could be very attractive, given the market size and market opportunity,” Wright said.
Evercore Inc. advised Apax, William Blair & Co. advised EveryAction and Insight while Harris Williams advised Vista.
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