Huntsman Gay in $208m software recap

Huntsman Gay has deployed more than 50% of the capital in its debut fund, which closed on $1.2bn in 2009, says firm co-founder Richard Lawson.

A consortium of investors led by Huntsman Gay Global Capital has completed a recapitalisation of medical laboratory software company Sunquest Information Systems.

Financial details were not disclosed, but a source close to the deal valued the transaction at $208 million, with the consortium acquiring a 51 percent stake in the company.

Sunquest, which provides management systems for hospitals and commercial laboratories, is also taking on new debt as part of the recapitalisation. The company is securing $655 million in bank debt and will use $630 million of debt and $38 million of cash on hand to fund dividends for shareholders, refinance $115 million of existing debt and pay related fees, according to Moody's Investors Service. A person with knowledge of the transaction confirmed the Moody's figures.


The recapitalisation will give existing owners Vista Equity Partners a partial exit with an implied 10.3x return, a source said. Vista bought Sunquest for $387 million in 2007.

The investment is Huntsman Gay’s seventh this year, and came from the firm’s debut fund, which closed on $1.2 billion in May of 2009. “With Sunquest, we are over 50 percent invested, so we’re well along the way to deploying this fund,” Huntsman Gay managing director and co-founder Richard Lawson told PEO.

The firm is industry agnostic, but has invested in a number of technology-related companies in recent months.

“We’re finding ourselves in the technology space, but in a way in which technology is influencing very different sectors in how they’re more competitive, whether it be healthcare, whether it be e-commerce, whether it be business process outsourcing,” Lawson said.

In November, Huntsman Gay made a growth equity investment in e-business systems and software developer iCongo, and purchased utility distribution and construction company E&R, an add-on acquisition to powerline maintenance and construction company T&D Solutions. The firm also acquired a majority interest in iQuor, a provider of business process outsourcing services, in September.

Given the number of acquisitions Huntsman has made in this year, the firm will be focused on tending to its portfolio companies in 2011, Lawson said.

Huntsman Gay was formed by former Utah industrialist Jon Huntsman and former Bain Capital director Robert Gay. Among the managing directors are Steve Young, formerly the quarterback for the San Francisco 49ers, a US professional football team. The firm focuses on mid-market leveraged buyouts, growth equity investments and strategic investments in mid-cap public companies.