Buyout Firm Bridge Growth Partners Acquires Solace Systems

  • Deal returns cash to Canadian firm's venture capital backers
  • Solace provides messaging technology to banks, exchanges

Solace Systems Inc., a company that develops and sells technology that makes it easier for companies to send big batches of data over the Internet, has sold a majority stake to Bridge Growth Partners, a three-year-old New York buyout firm.

Terms of the deal weren’t disclosed in a press release Wednesday.

The deal enables Solace’s venture capital backers to book a return on the roughly $80 million they have invested in the Ottawa, Canada-based company since it was founded in 2001, Solace Chief Executive Officer Craig Betts said in an interview. Those five key investors -- including Canadian entrepreneur Sir Terence Matthews and the Ontario Teachers’ Pension Plan -- still hold stakes in the company, he said.

Solace will use Bridge Growth’s backing to expand internationally and to go after new customers in the transportation, aviation and gaming industries, among others, Betts said.

Its core customers since it started have primarily been financial services providers such as Barclays Plc, London Stock Exchange Group Plc and Royal Bank of Canada.

“We’re pretty deep in finance,” Betts said, adding that the company is aiming to go “deeper, faster” in other areas of business.

Middleware Technology

Solace competes against TIBCO Software Inc. and International Business Machines Corp. in providing message-oriented middleware, which is a various kinds of technology that sends data between computer networks. While middleware has usually been provided through software, Solace’s innovation was developing hardware companies could use for sending messages safer, faster and cheaper, Betts said.

“In this business a message is essentially a unit of information that needs to get to point A from point B across the Internet,” he said. “We have essentially turned that enterprise software business into a networking business.”

Bridge Growth was co-founded in 2013 by Sander Levy, a veteran of Vestar Capital Partners, and Alok Singh, who was with New Mountain Capital. The firm targets financial technology companies, as well as companies in other areas of technology. It closed its first acquisition last year of CRGT Inc., which develops software for government agencies.

Singh and Bridge Growth Senior Principal Tom Manley are joining Solace’s board, the press release said.

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