Hellman, TPG, JMI ready 4x software exit

A group led by Hellman & Friedman, TPG and JMI Equity will sell Intergraph, a maker of engineering and geospatial software, for $2.1 billion to Swedish technology company Hexagon.

A source close to the deal said the return for the private equity firms as a whole would equate to a multiple of more than four times the investment. Hellman, TPG and JMI acquired Intergraph in 2006 in a transaction valued at roughly $1.3 billion.

Intergraph’s software is used by energy, chemical and shipbuilding companies, among others. The products convert spatial information into visual representations.

Intergraph will be acquired by Hexagon, a “measurement technologies company” based in Stockholm, Sweden. The acquisition is fully financed via bank facilities, and the transaction is expected to close in the third or fourth quarter of 2010. In a statement, Hexagon said it intends to pursue a rights issue corresponding to $850 million “as soon as practically possible following completion of the acquisition”.

Both TPG and Hellman & Friedman are based in San Francisco. The two firms have co-invested in the past, including on the Linsco/Private Ledger deal and on Texas Genco, which was purchased for approximately $1.9 billion in 2004 and sold the following year for roughly $5.9 billion.

TPG last month signed a memorandum of understanding (MoU) to invest an undisclosed amount in troubled Indian retailer Vishal Retail, the company said in a filing with the Bombay Stock Exchange. The firm has $48 billion of assets under management.

JMI Equity, a private equity firm focused on software, internet and business services deals, provides capital for growth, recapitalisations, acquisitions and buyouts, and has $1.3 billion of committed capital under management.