Private equity firms Clearlake Capital Group LP and TA Associates have agreed to acquire software company Kofax Inc. from PE company Thoma Bravo, the latest in a string of ownership changes for the Irvine-based firm.
Financial terms were undisclosed, though November news reports indicated a potential deal would be worth $3 billion, including debt.
Kofax software handles masses of written information digitally, such as letting firms automate their invoice processing and accounts payable processes, aiding companies in their shift from the paper era to the digital one.
With the sale, the company “will be fully empowered and enabled to continue to pursue the strategy that we have been executing on,” said Kofax CEO Reynolds Bish.
Bish said 2021 revenue showed a “slight decline” to around $550 million, with a “very strong” EBITDA—a measure of profitability—of about 44% of revenue.
Revenue this year will probably be closer to $600 million, with the same level of profitability, according to the CEO.
Bish told the Business Journal on April 27 that he and the rest of the management team will be staying on in their current posts.
“We’ve signed up for at least the next three to five years,” he said.
Santa Monica-based Clearlake and TA of Boston will become majority shareholders in Kofax upon the closing, which is expected sometime between July and September, subject to customary conditions.
25,000 Companies
Kofax now services more than 25,000 companies and agencies worldwide, including Aetna, American Express, BNP Paribas and Goldman Sachs, according to its website.
Kofax was the 34th largest privately held company in OC last year by revenue, according to Business Journal rankings. It now counts more than 1,900 employees in 31 countries.
Kofax is one of several local software companies—such as Irvine-based Ephesoft—that help speed up the handling of documents and invoices.
Change Frequent
A deal had been expected.
Bloomberg News reported in November that Thoma Bravo, with offices in Chicago and San Francisco, was looking for a buyer for Kofax.
It’s far from the first time the company’s seen an ownership change.
Kofax was founded in Irvine in 1985. It went public and started trading on the Nasdaq in 1997.
In July 1999, the software firm was purchased by a Switzerland-based holding company called DICOM Group in a reported $75 million cash deal.
DICOM was listed on the London Stock Exchange, and Kofax itself a DICOM subsidiary was delisted from the Nasdaq.
Kofax moved its operational base from London back to Irvine in 2007, changing its name from DICOM to Kofax. It began trading on the tech-heavy Nasdaq Global Select market in December 2013.
In May 2015, the company was sold for a little over a $1 billion to Lexmark International Inc. in Lexington, Ky.
Thoma Bravo purchased Kofax in 2017 for an undisclosed amount.
“That’s a lot of changes,” Bish said.
Automation Focus
Kofax says it is one of the largest suppliers in the process automation market.
The company’s offerings help organizations digitally transform information-intensive business processes, reducing manual labor, errors and costs and improving customer engagement. Kofax says its products also mitigate compliance risk and increase competitiveness.
Over the course of Thoma Bravo’s five-year stint as owner, Kofax introduced several new software innovations, closed multiple acquisitions and improved backend operations.
Bish said Kofax is now focused on “developing and expanding our product portfolio.”
Bish boasts a long career in the software business, including co-founding and serving as CEO of Captiva Software Corp.; CEO of Unibase Systems Inc.; and co-founder and CFO of Covalent Systems Corp.
