Bain Buys Rocket for $2 Billion
October 10, 2018 Alex Woodie
Rocket Software announced yesterday that Bain Capital Private Equity has agreed to acquire a majority stake in the company for $2 billion. The company’s management team will remain intact following the transaction, which is expected to be completed this quarter.
Rumors have been swirling in recent months that Rocket had put itself on the market and was looking to sell itself or its products. The investment by Bain Capital should put an end to the speculation, as Rocket CEO and president Andy Youniss says the company is embarking upon its fourth decade of growth.
“This new relationship will allow us to devote significant resources to our new global R&D organization, while developing and delivering even more solutions that help our customers both optimize and modernize their applications, data, and security infrastructure on IBM Z, IBM i, and MultiValue application platforms,” Youniss says in a press release.
Rocket Software owns several IBM i product lines thanks to various acquisitions over the years, including Aldon, Seagull, BlueZone, and iCluster. Through those products, the company plays in a range of IBM i-related IT disciplines, including application lifecycle management, DevOps, application modernization, mobile development, terminal emulation, high availability, and disaster recovery.
The privately held, Waltham, Massachusetts-based company has traditionally also has a strong play in the System z mainframe, and is a player in the big data analytics space through the MultiValue database it acquired from IBM. The company also developed IBM’s Cloud Storage Solutions on behalf of Big Blue, which sells it as its own product to IBM i customers.
Bain Capital is one of the country’s storied private equity firms, but so far it hasn’t intersected much in the market for IBM i business software. The company, which was co-founded by former presidential candidate and Massachusetts governor Mitt Romney, reportedly made a $1.6-billion offer to buy Micro Focus back in 2011. But the activity in the IBM i portion of the enterprise IT market has been generated from other private equity firms, such as Apax Partners, H.I.G. Capital, Golden Gate, and others.
David Humphrey, a managing director at Bain Capital, says the company is looking forward to working with Rocket. “Rocket Software is resoundingly viewed as a trusted resource by customers and partners who depend upon its reliable technology and mission-critical product portfolio,” he stated in a press release. “The company has been enormously successful transforming and continually improving its innovative solutions as well as integrating acquisitions.”