Francisco Partners acquires majority stake in Command Alkon from Thoma Bravo

Francisco Partners has agreed to acquire a majority stake in construction software provider Command Alkon from Thoma Bravo, marking the latest PE transaction involving vertical software assets despite a more selective market for technology exits.

Under the terms of the deal, Francisco Partners will acquire Thoma Bravo’s 55% holding in the business, while Heidelberg Materials, Command Alkon’s largest customer and strategic investor, will retain its significant minority stake.

Financial terms were not disclosed, although reports have valued the transaction at up to $1.3bn.

The deal represents another successful software exit for Thoma Bravo, which acquired Command Alkon in 2020 before selling a 45% interest to Heidelberg Materials a year later. The transaction follows the firm’s sale of Heavy Construction Systems Specialists to Nemetschek earlier this year in a deal valued at more than €2bn.

Command Alkon develops software used across the construction materials supply chain, providing digital solutions for producers and suppliers of cement, aggregates, asphalt, ready-mix concrete and related building materials.

Thoma Bravo said its partnership with Heidelberg Materials helped shape the company’s development during its ownership period, combining the operational expertise of a strategic industry participant with the value creation approach of a private equity sponsor.

For Francisco Partners, the acquisition expands its portfolio of enterprise software businesses serving specialised industrial end markets. The firm said continued investment in infrastructure, together with advances in artificial intelligence, is expected to create further opportunities to enhance Command Alkon’s technology platform and deliver greater value to customers.

The transaction comes at a time when software-focused private equity firms continue to face a more demanding exit environment, with investors placing greater emphasis on recurring revenues, profitability and the resilience of business models amid rapid advances in AI.

Nevertheless, the Command Alkon sale suggests high-quality vertical software assets with strong market positions continue to attract sponsor interest, particularly where they serve essential industries with long-term digitalisation opportunities.

Deutsche Bank and Paul Hastings advised Francisco Partners on the transaction. Evercore and Kirkland & Ellis acted for Thoma Bravo and Command Alkon, while Skadden, Arps, Slate, Meagher & Flom advised Heidelberg Materials.