Tennessee-based growth equity firm SSM Partners has sold software company Third Coast Holdings for $290 million, according to a statement.
SSM declined to comment, but a source familiar with the matter said the exit generates a 7x return multiple for SSM. Third Coast Holdings is the parent company of Datacert and provides enterprise legal management software and services for general counsel offices and law firms in the US and internationally. The company will be combined with new owner Wolters Kluwer Corporate Legal Services' enterprise legal management business, TyMetrix.
Datacert had revenues of $57 million in 2013, of which over 80 percent is subscription-based. Including integration benefits, Datacert is expected to deliver a return on total investment above Wolters Kluwer's after tax cost of capital of 8 percent within three to five years. The transaction is expected to be slightly earnings enhancing in the first full year.
SSM Partners led a $10 million financing round for Third Coast in 2007, and was the only institutional investor.
SSM Partners is currently in market with its fifth fund which has an undisclosed target, according to Private Equity International’s Research and Analytics division. The firm’s Fund III, a 2003 vintage, closed on $57 million, according to PEI data.
SSM focuses on companies in the software and technology, Internet and consumer, and healthcare sectors, according to its website.