What's at Intersection of Tech and Private Equity?

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Dec. 3 (Bloomberg) -- Francisco Partners Managing Partner Dipanjan "DJ" Deb discusses private equity and his investment ideas with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

What are you seeing right now in the intersection between tech and pe?

Thank you for having me on.

People today talk about linkedin, facebook, twitter, we are spending all of our time in the orphan companies.

We focus on the vast middle market, which has 6000 public tech companies, less than $1 billion in market cap on research analysts.

If you add to that all the divisions of public companies and private companies, there are thousands that are not covered and that is where we see opportunity.

Go ahead.

I did not mean to cut you off.

We try to buy confusion at a discount and sell clarity of premium.

Which industries are you serving most?

By definition, which need the most hat -- which meet -- which need the most help and where can you exploit the most profits?

We invest in software, profits, security, communications, semi conductors, and we are seeing opportunities today with companies more in the social consumer space.

It is kind of old world companies.

Anything that is under $1 billion in market cap has pretty interesting values.

I know that some of your transactions are being brought up like, portfolio companies, some that you have invested in in different ways, what kinds of exits do you prefer?

It is a great market for exits today.

The top technology companies have over one dollar trillion in cash and most are not growing very fast.

In organic acquisitions m&a waits for them to justify, so that is a great exit source for us.

One month ago we had barracuda network, a company that when it was originally invested in did 40 million in billions -- 40 million in bit -- $40 million in billings.

I know you have had one portfolio company recently acquired as well.

Next track?

We made that investment a few years ago, they are in the telematics space.

Think of you as the owner of a space where you have drivers where you monitor what they are doing, you do not want them taking lunch breaks or filling up on extra gas.

We bought the company and three years later by transitioning to salesforce from interactive direct, we were able to exploit the growth rate to over 30% per year.

We just sold the business for a very attractive profit to their distribution channels.

I know that what you wound up buying was mckesson automation.

What do you see in this?

This is where our firm started, our raison d'e™tre from the very beginning.

It is addition by subtraction.

By jettisoning your division that is not growing at a corporate growth rate, it can be a win-win.

It was a $170 million revenue business.

They do robots that allow you to serve pharmaceuticals and hospitals.

Press the button and the drug comes directly to the patient.

It eliminates human error, saves a lot of money.

We bought the business for $60 million and it was a win-win for them and ourselves.

Thank you for the time.

Glad to hear what you are doing.

This text has been automatically generated. It may not be 100% accurate.


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