U.S. private equity giant Thoma Bravo LLC has bought majority control of one of Toronto’s oldest and steadiest enterprise software providers, Cority Software Inc. Terms were not disclosed, but industry sources believe the deal values the 350-person company at between $500-million and $750-million.
“We’re delighted to partner with Thoma Bravo,” said Cority chief executive officer Mark Wallace. “They’re an 'A' player in the software investment world.”
Cority, which changed its name from Medgate two years ago, is a provider of cloud-based subscription software used by companies to perform environmental, health, safety and quality audits. It is also one of two leading players in the business globally that is based in Toronto, along with Intelex Technologies Inc. Its previous majority owner, Norwest Venture Partners, and minority shareholder, Canadian venture fund Georgian Partners, will retain some of their stake in the company, which has annual revenue in the high tens of millions of dollars and has been profitable for 15 years, generating operating margins in excess of 20 per cent.
Private-equity money has flooded into the fragmented industry in recent years as players have switched to a cloud-based subscription service model. Growth has come from increasing compliance requirements for big companies, which have increasingly turned to software providers. Norwest and Georgian invested in Cority in 2016.
Cority chair Shanti Atkins said Thoma Bravo brings “deep expertise and knowledge in this domain” as it has backed several other companies in the governance, risk and compliance sector. She said under its ownership Cority will likely emerge as the leading consolidator in its highly fragmented space – though its steady 30-per-cent rise in revenue in recent years means “it doesn’t need to” acquire others to maintain a fast pace of growth.
Thoma Bravo partner Hudson Smith said in a statement that Cority is unique in the governance, risk and compliance market in that "it offers enterprise clients a single platform to manage their health, safety, environmental, sustainability, operational risk and quality needs.”
Cority has more than 800 customers worldwide in heavy industries such as aircraft manufacturing, mining and oil and gas.