Sparta Systems Acquired by PE Firm New Mountain Capital

Sparta Systems (Hamilton), which was owned by private equity investment firm Thoma Bravo (Chicago and San Francisco), has been acquired by New Mountain Capital (New York), another private equity investor. The financial details were not disclosed.

Basically, this represents an infusion of cash for Sparta. Under the ownership of Thoma Bravo, which acquired the firm in 2014, the company more than doubled its revenue, according to Michael Bord, marketing director. The company believes that it caught the eye of New Mountain Capital because of its accelerated growth and its unique position in the marketplace as the leader in quality management-systems software.

Sparta develops software to help companies automate business processes tied to quality management and regulatory compliance. “The benefit for those companies is that they can make safer products and make sure they comply with regulatory agencies like the FDA,” Bord said.

Companies are able to increase their effectiveness regarding product compliance, Bord noted. A lot of the company’s clients had been using spreadsheets or even just pen and paper to keep track of their data related to quality and compliance. “According to a study we are going to release in a couple of months, most companies we have been working with can, on average, increase their productivity by about 59 percent by using our solution,” Bord said.

The company works primarily with life-science and medical-device firms, but “in the last couple of years we’ve expanded into consumer products and discrete manufacturing.” Founded in 1994, Sparta Systems now has close to a million clients in more than 30 countries. It maintains an extensive customer base in many highly regulated industries, including 45 of the top 50 pharmaceutical companies and 13 of the top 15 medical-device companies, in addition to leading consumer-product and discrete-manufacturing companies, according to a company statement.

Sparta will use the infusion of cash for organic and inorganic growth, and it will be hiring, Bord said. It will also be on the lookout for strategic acquisitions. While the company plans to continue its focus on life sciences, it may use some of the funds to expand in the consumer-product and discrete-manufacturing spaces where there is room for growth.

Thoma Bravo will maintain a minority stake in the firm. “We believe that New Mountain Capital is the ideal partner to support us in the next phase of our growth trajectory by investing in continuous product innovation and industry expansion,” said Eileen Martinson, CEO of Sparta Systems in a release.

 “I’m confident that this will enable us to advance our vision of a Quality Business Network through both organic and inorganic growth initiatives. Furthermore, I am proud of what we have achieved with Thoma Bravo over the past three years and am extremely pleased they will remain a partner on our new journey.”

The transaction is expected to close in the third quarter of this year, subject to the usual and customary closing conditions and regulatory approvals.