(Bloomberg) -- Private equity company Battery Ventures is reinvesting in a software company it exited just five months ago.
Boston, MA-based Battery will buy a 10% stake in Forterro, a European business software provider that it sold to Partners Group Holding AG in March at a 1 billion-euro ($1 billion) valuation. Forterro’s value will be unchanged by the new investment, Battery said in a statement.
While private equity firms do sometimes reinvest in the same companies, Battery’s rapid recommitment is due to one of its funds nearing the end of its life. The firm originally owned Forterro through a 12-year-old vehicle that now needs to return money to investors, said Dave Tabors, private equity partner at Battery.
“That fund can’t support another 5- to 7-year timeline to create the next step in the value journey,” he said in an interview. Battery is reinvesting via a recently-raised $530 million fund. Forterro is aggressively shifting to a subscription model for its software, which will drive recurring revenues, and will also have more capacity for acquisitions with two private equity backers, Tabors added.
Battery decided not to use a continuation vehicle to extend the holding in Forterro. Last year there were $62 billion-worth of such deals, where managers brought in new investors while offering exits for early backers, according to data from Greenhill & Co. That’s more than double the amount seen in either 2019 or 2020.
That option was quickly discarded as it would not have given Forterro access to fresh capital, said Tabors.
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