Software investment firm Turn/River Capital is reportedly considering a sale of full-stack automation fabric solutions provider Redwood Software in a deal that would value the latter at approximately $2.5bn.
Turn/River Capital has selected Goldman Sachs to launch the sale process for the automation software company, reported Reuters, citing undisclosed sources with knowledge of the matter.
The news agency claimed that the potential divestiture of Redwood Software is expected to attract interest from other private equity firms.
Redwood Software 101
Based in the US, Redwood Software offers full-stack automation for mission-critical business processes, including reconciliation, financial close, forecasting, replenishment, order to cash, billing, reporting, and others.
The firm aims to augment automation processes with its software as a solution (SaaS)-based composable automation platform specifically built for enterprise resource planning (ERP). According to Redwood Software, its solutions empower clients to orchestrate, manage and monitor their workflows across any application, service or server in the cloud or on-premise.
Redwood Software could demand a valuation of around 25 times its earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is estimated to be around $100m, reported Reuters. However, the publication said that discussions are still in the early stages, and there is no guarantee that a deal will be finalised.
Turn/River Capital made a strategic investment of €315m in Redwood Software in 2021. The investment was aimed at helping the automation software company to accelerate new feature development for its IT and business process automation platform.
Expansion plans
In January of the following year, Redwood Software acquired Tidal Software, a provider of enterprise workload automation.
This acquisition was followed by the purchase of Cerberus in February, a secure file transfer provider that enhanced Redwood Software’s existing portfolio, which includes automation solutions like RunMyJobs, ActiveBatch, and JSCAPE.
Based in San Francisco, Turn/River Capital has made several significant investments in the software sector, focusing on companies that provide critical technological solutions.
In May 2024, the private equity firm invested in Paessler, a company that specialises in network management software, enabling businesses to effectively monitor their IT, OT, and IoT infrastructures.
Earlier, in March 2024, Turn/River Capital also backed APRO Software Solutions, an IT consulting and outsourcing company known for its expertise in providing strategic technological support to businesses.
Additionally, in February 2024, Turn/River Capital made a notable investment in AKIPS, another key player in the network management software industry, further solidifying its presence in this vital sector.
Read more: AMD to acquire hyperscale server solutions provider ZT Systems in $4.9bn deal
