Vector acquires Symantec unit

The San Francisco-based private equity firm has spun off a software vendor into a stand-alone business for the first time since 2000, and has tapped a Benchmark GP to run the company.

Vector Capital has acquired Symantec’s Application Performance Management business with additional investment from Greylock Partners. The Symantec unit will now operate as a stand-alone company called Precise Software Solutions.

Purchase price was not disclosed, however, Vector and Greylock, both based in San Francisco, have committed a combined $50 million (€32.5 million) in growth capital aside from the purchase price.

Rob Amen

The application performance management industry helps large companies get the most out of their existing IT infrastructure, and is fast-growing due to the increasing dependence of large companies on IT, Vector principal Rob Amen told PEO.

Precise was originally an independent company that went public in 2000. In 2003, the company was purchased by software company Veritas, which then merged with Symantec in 2004.

“Precise got lost in Symantec,” Amen said. The unit was no longer a priority as the two multi-billion dollar companies turned their attention to integration issues, he said.

“We are primarily looking to grow the company organically,” said Amen. Vector plans to double Precise’s sales and marketing within 18 months, invest in technology, build a back office and establish a headquarters in the Bay Area. The company currently has a staff of 200 and roughly 1800 customers.

Precise’s top competitors were acquired in 2006: Wily Technology by Computer Associates and Mercury Interactive by HP. “Precise is now one of the few stand-alone [application performance management] vendors of significance,” said Amen. The niche market is growing at 20 percent to 30 percent per year and Precise is entering a period of growth while its competitors are in integration processes, he added. 

Precise got lost in Symantec

Rob Amen

A merger and an initial public offering are both viable exit options, said Amen.

Mark Kremer, previously a partner at Silicon-Valley venture firm Benchmark Capital, has joined Precise as chief executive. Prior to Benchmark, Kremer was chief executive of e-business application company Broadbase Software. Kremer founded Broadbase in 1995 and led the company to an initial public offering in 1999.

Technology-focussed Vector has a history of investing in non-core divisions of large technology companies. The firm previously spun out LANDesk Software from Intel and Savi Technology from Raytheon.

In August 2007, Vector closed its fourth fund on $1.2 billion, more than three times the size of its previous fund.

Greylock has more than $2 billion in committed capital; previous investments include online advertising company DoubleClick, which was sold to Google last year for $3.1 billion, and open-source software company Red Hat.