Blackstone to Acquire Majority Stake in Priority Software

Rhea-AI Summary

Blackstone announced a definitive agreement to acquire a majority stake in Priority Software, a leading provider of ERP and business software solutions. Existing investors TA Associates and Fortissimo Capital will retain their stakes. Priority Software serves over 17,000 customers with more than 300,000 end users across various industries, supported by a global network of 100+ partners. The acquisition aims to bolster Priority Software’s growth and market position, leveraging Blackstone's experience and portfolio of over 230 companies. The transaction terms were not disclosed.

Positive

• Blackstone's investment aims to accelerate Priority Software's growth trajectory and market penetration.
• Priority Software serves over 17,000 customers and 300,000 end users, indicating a strong market presence.
• Supported by a network of 100+ partners, enhancing its global reach.
• Blackstone's portfolio of over 230 companies provides valuable insights for growth.
• Priority Software's comprehensive product suite caters to diverse industries, enhancing its market adaptability.
• Retention of existing investors TA Associates and Fortissimo Capital signifies confidence in the company's growth potential.
• The acquisition aims to solidify Priority Software's leadership position in the ERP market.

Negative

• Terms of the transaction were not disclosed, creating uncertainty about the financial specifics.
• Involvement of multiple parties may lead to potential conflicts in decision-making processes.

Insights

Financial Analyst

Blackstone's acquisition of a majority stake in Priority Software signifies a strong confidence in the latter's growth potential within the ERP software market. Priority Software, with over 17,000 customers and 300,000 end users, already has a significant presence, which Blackstone aims to bolster. This move could indicate a potential for substantial financial growth for Priority Software, as Blackstone's investment will likely be used to expand market reach and enhance product offerings.

From an investor's perspective, this acquisition could lead to increased valuations for Priority Software and potentially higher returns for stakeholders. Given Blackstone's extensive portfolio and experience in the software sector, the synergies created through this partnership could accelerate Priority Software's growth trajectory. In the short term, investors might see increased spending on R&D and market expansion, potentially impacting immediate profitability but setting up stronger long-term growth.

Additionally, the continued involvement of TA Associates and Fortissimo Capital, who are rolling their stakes, implies a vote of confidence from existing investors. This can be reassuring for retail investors, suggesting that the growth trajectory seen so far is expected to continue.

Tech Expert

Priority Software's comprehensive ERP offerings and its focus on cloud-based applications make it well-positioned in the evolving business software landscape. The transition to cloud-based solutions is a significant trend, with businesses increasingly seeking scalable and flexible software solutions. By acquiring Priority Software, Blackstone is investing in a company that not only addresses current business needs but is also primed for future technological advancements.

The cloud-based ERP market is expected to grow significantly, driven by digital transformation initiatives across industries. Priority Software's suite of products spans multiple verticals, including retail, hospitality and education, which means they have solutions tailored to specific industry needs, making their offerings particularly valuable. This positions Priority Software to capitalize on the ongoing shift towards digital and cloud-based business management solutions, potentially leading to robust growth in the coming years.

Moreover, Blackstone's global reach and expertise can help Priority Software scale its operations and enter new markets more effectively, further enhancing its competitive edge. This strategic investment aligns well with industry trends and positions Priority Software for continued innovation and market leadership.

Market Research Analyst

The acquisition underscores the strategic importance of ERP software in today's business environment. The ERP market is expected to witness substantial growth, driven by the need for businesses to integrate and streamline their operations. Priority Software's robust product suite and extensive partner network provide a solid foundation for capitalizing on this trend.

Blackstone's investment can be seen as a strategic move to leverage Priority's established market presence and technological capabilities. The involvement of seasoned investors like TA Associates and Fortissimo Capital adds another layer of credibility, suggesting that Priority Software is well-regarded within the investment community. This partnership could lead to enhanced market penetration and diversification of Priority’s customer base.

For retail investors, this acquisition could signal a promising opportunity. However, it's important to monitor how Blackstone's involvement translates into tangible growth and financial performance. The ability to scale operations and innovate rapidly will be key factors in determining the long-term success of this partnership.

Existing investors TA Associates (“TA”) and Fortissimo Capital to roll their stakes.

TEL AVIV, Israel--(BUSINESS WIRE)-- Blackstone today announced that Blackstone Growth and affiliated funds (collectively “Blackstone”) have entered into a definitive agreement to acquire a majority stake in Priority Software, a leading provider of mission-critical business software. Blackstone’s investment will help build on the company’s position at the forefront of the ERP software market and support its further growth across industries and markets.

Priority Software offers robust mission-critical business applications and ERP solutions across various industries, enhancing business management through innovative, cloud-based applications. The company’s comprehensive product suite, which includes solutions for retail management, hospitality and education, is supported by a network of 100+ partners worldwide. Its solutions play a critical role in automating complex processes and centralizing data management, helping businesses drive growth, optimize operations and, ultimately, enhance profitability while ensuring they are well-equipped to meet future challenges and capitalize on new opportunities in their respective markets. The company has more than 17,000 customers and over 300,000 end users across multiple end markets. Priority has 500+ employees located across five offices in Israel, the US, and Belgium.

Yifat Oron, Senior Managing Director at Blackstone and head of its Israel office, said, “Priority Software has grown into a leader within the ERP market by developing business application software – both horizontal and vertical – that caters to the holistic needs of companies across sectors from their early days, through every stage of growth and, ultimately, at scale. Given our extensive experience in the software space – as well as the significant insight we glean from our global reach and more than 230 portfolio companies, including in hospitality, industrials, life sciences, energy and beyond – we believe Blackstone is well-positioned as a growth partner for this exceptional business.”

Sagive Greenspan, CEO of Priority Software, said, "The decision by Blackstone to partner with Priority Software is a testament to the strength of our business and the tremendous market opportunity that lies ahead. With Blackstone's support, we are well-positioned to accelerate our growth trajectory, deepen our market penetration, and solidify our position as a leader in the industry. We are excited about the possibilities this partnership brings and remain steadfast in our commitment to driving unparalleled value for our customers and stakeholders."

Yuval Cohen, Manager Partner at Fortissimo Capital, said, "Fortissimo Capital is proud to have partnered with the Priority Software team and to have played a role in the company’s rapid growth for over a decade. We remain confident in Priority Software’s potential in Israel due to its leadership position, loyal customer base, superior technology, and the prospect of continued global expansion. We are excited to welcome Blackstone as a new partner to further accelerate Priority Software’s growth."

Stefan Dandl, Director at TA Associates, said, “Working in partnership with Sagive, the Priority management team and Fortissimo, we are proud to have delivered significant organic and inorganic growth for the company over the last three years. Blackstone’s new investment underscores the strength of Priority’s strategy and the continued opportunity that lies ahead. We look forward to deepening our partnership with Priority and harnessing the collective expertise of TA, Blackstone and Fortissimo to further accelerate the company’s growth journey.”

Evercore acted as exclusive financial advisor to Priority, Fortissimo and TA, and Goodwin and Gornitzky provided legal counsel. Kirkland & Ellis and Meitar provided legal counsel to Blackstone. Terms of the transaction were not disclosed.

Priority has four main offerings: 1) Priority Business Applications (ERP solutions), 2) Priority Retail, a complete omnichannel, all-in-one retail management solution, 3) Priority Hospitality, a next-gen property management software and 4) Priority Education, pedagogical management software serving schools. Its wide range of offerings across horizontal and vertical markets allows for companies to optimize their business management with a comprehensive platform.

About Blackstone

Blackstone is the world’s largest alternative asset manager. We seek to deliver compelling returns for institutional and individual investors by strengthening the companies in which we invest. Our more than $1 trillion in assets under management include global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram.

About Priority Software

Priority is a leading provider of scalable and agile cloud business management solutions for various industries and organizations of all sizes, from global enterprises to small and growing businesses. Recognized by top industry experts and analysts for its product innovation, Priority provides real-time access to business data and insights from any desktop or mobile device, enabling organizations to increase operational efficiency, improve the customer experience, identify new opportunities, and outpace the competition.

About TA

TA is a leading global private equity firm focused on scaling growth in profitable companies. Since 1968, TA has invested in more than 560 companies across its five target industries – technology, healthcare, financial services, consumer and business services. Leveraging its deep industry expertise and strategic resources, TA collaborates with management teams worldwide to help high-quality companies deliver lasting value. The firm has raised $65 billion in capital to date and has over 150 investment professionals across offices in Boston, Menlo Park, Austin, London, Mumbai and Hong Kong. More information about TA can be found at www.ta.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516033664/en/

Oriane Morley (Israel)

(+972-54-261-4671)

Oriane@morleycomms.com

Mariel Seidman-Gati (U.S.)

(646) 482-3712

Mariel.Seidmangati@blackstone.com

Source: Blackstone

FAQ

What is the recent development with Priority Software and Blackstone?

Blackstone has announced a definitive agreement to acquire a majority stake in Priority Software.

How many customers does Priority Software serve?

Priority Software serves over 17,000 customers and more than 300,000 end users.

What industries does Priority Software cater to?

Priority Software offers ERP and business solutions across various industries, including retail, hospitality, and education.

What will Blackstone's investment in Priority Software achieve?

Blackstone's investment aims to accelerate Priority Software's growth, deepen market penetration, and solidify its market position.

Who are the existing investors in Priority Software?

The existing investors are TA Associates and Fortissimo Capital, who will retain their stakes.

How extensive is Blackstone's experience in the software space?

Blackstone has a global reach and manages more than 230 portfolio companies across various sectors.

What is the role of Priority Software's network of partners?

Priority Software is supported by a network of over 100 partners worldwide, enhancing its market reach and support.

Who provided legal counsel for the Blackstone acquisition of Priority Software?

Kirkland & Ellis and Meitar provided legal counsel to Blackstone, while Goodwin and Gornitzky advised Priority, Fortissimo, and TA.