When news spread around that HGGC had recapitalized IDERA by signing a definitive agreement, a lot was expected from the deal. The company had been busy in the markets signing contracts with various companies. However, there was something unique about this particular agreement, and it is what caught the eye of most analysts. It should not be forgotten that IDERA is a leader when it comes to the provision of database lifecycle management solutions. Therefore, everyone wanted to know how the funders would benefit from the $1.25 billion that was set aside for the recapitalization.
The controlling investor
Before the signing of the deal, TA Associates were the owners of IDERA. This relationship was the position since 2014. However, details emerged that they will cease to hold that position because HGGC was to be the new controller of IDERA. However, the other company would retain an ownership stake that gives them a say in the management of the company. In the recapitalization agreement, there is a provision for funding for pending add-ons that provide the funders with a more dominant role. With this knowledge, we now know one of the ways that they will benefit.
An efficient research model
Another reason why HGGC funded the recapitalization of IDERA is to leverage on their already useful working model. The company boasts of one of the most efficient and flexible models in this industry. Their love for a culture of continuous change, which has seen them overcome many challenges, makes them even more appealing. Because of their nature, they can easily pivot when responding to customer demands. Therefore, they can bring new software products to the industry. This description fits in well with the easier by the funders to improve their services.
Now, we can tell for sure why HGGC was excited after signing of the recapitalization deal. Numerous tweets were showing the excitement to be part of a new company. In one of the tweets, HGGC described themselves as investors in one of the best companies. A few years after the recapitalization, there is no doubt that the deal paid off for both parties because they have enjoyed massive success on various fronts.