TPG kicks off $500m DevOps acquisition spree by snapping up CollabNet Version One

CollabNet Version One has been snapped up by a private equity group which will make the value-stream specialist the centrepiece of a dedicated DevOps portfolio.

TPG has taken over CollabNet from previous owners Vector Capital, subject to closing conditions. The price tag was not disclosed, but TPG said the buy was “the first step in a broader strategy in which TPG Capital will commit up to $500 million of equity capital to build a leading, integrated, enterprise-focused DevOps platform company.”

The new owner and Collabnet’s management will “will work together to accelerate the growth of the company’s existing portfolio, as well as aggressively pursue acquisitions in strategic adjacencies that complement Agile planning and delivery, as well as testing, release management, and the emerging market for VSM.”

“We have studied the software delivery and DevOps space for several years. The space is highly fragmented with several smaller vendors addressing the low end of the market,” said TPG’s  Nehal Raj and Art Heidrich in a statement.

At the same time, they said, major enterprises were prioritizing inhouse development and digital transformation, meaning they “see a compelling opportunity to build an integrated DevOps company focused on larger enterprises.”

That insight is not unique to TPG – but that $500m war chest could fund quite a few acquisitions. Companies that a few years ago were scrappy startups in the cloud native or DevOps worlds, often with an open source project attached, are finding that enthusiasm isn’t quite enough when it comes to scaling up in the enterprise. And that it turns out that the big IT checks are often still written by people in suits who like to deal with other suits.

Established software players like Microsoft, Google, Atlassian, and Cloudbees have all made one or more buys so far this year. On the private equity side, TravisCI was swallowed by Idera, while private equity-backed Perforce snapped up Rogue Wave.

The trick – for investors and aquirees – will be avoiding the charge that such buys aren’t simply a case of the money men simply looking for a legacy revenue stream from a software museum.