Carlyle takes stake in Primatics

The Carlyle Group has taken a stake in Primatics Financial, the private equity firm’s second investment in a niche software-services company in the last six months.

The Carlyle Group recently took a stake in Mclean, Virginia-based Primatics Financial, a company that provides loan-accounting and risk-management software for the financial services industry.

Terms of the deal were not disclosed. Funding flowed from Carlyle Growth Partners III, a fund that closed with $605 million in 2007. Primatics provides integrated software and technology solutions to regional and national banks.

Cash raised from Carlyle provides growth capital for Primatics, which aims to compete directly with services offered by large accounting firms.The company’s current client base of banks and financial institutions manage aggregate loans of $200 billion. Changes in regulatory requirements for GAAP loan accounting have created growth opportunities for Primatics, according to company officials. The firm’s software uses complex accounting models are aimed at banks tapping the consumer and commercial loan market.

“We’ve been growing at what I would call a judicious, but quick pace. We were looking at potential partners who bring expertise, experience and financial capital, in particular with a focus in the technology area,” said Peter Fitzsimmons, CEO of Primatics. “It’s been something of a journey for us. We had been seeking a strategic partner since the end of 2009,” he said.

Carlyle was advised by and Ernst & Young and the law firm Latham & Watkins.

The Primatics investment marks the second allocation by Carlyle Growth Partners III to a niche software services company within the past six months. In July, the fund took a stake in Houston-based Quorum Business Solutions, which provides financial and business software targeted at the oil and gas industry.