Idera Inc.: a 10-bagger for TA Associates

Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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Why is this important?

Since 2022, we have witnessed a substantial influx of capital into the rollup space, with strong support from venture capital (e.g., Threecolts, Shop Circle, Unaric) as well as private equity firms and their “alumni” (Everfield, Tiugo, Big Band, Relay Commerce). Sometimes both (Abingdon Software). Considering that the US software rollup industry is well established – to the point where it boasts multiple $1B+ exits – it’s valuable to explore lessons learnt. 

After profiling Therapy Brands (Hell of a therapy session! Why did KKR pay $1.25B for Therapy Brands?), we turn our attention to Idera – a Houston, Texas-headquartered federation of solutions that help database and system administrators, as well as software developers, improve the overall availability, performance and efficiency of their IT systems. 

Idera’s cap table has evolved significantly over the last decade – and so have its financials. Based on publicly disclosed information, its TTM Dec 2021 revenue was $345M with an EBITDA margin of ~50%. On this basis, Idera is one of the largest privately held software rollups:

Idera’s origins

Idera traces its beginnings to 2000, when Tien Gah “Alan” Lee created developer tools under the original JSync product. Around the same time, Rick Pleczko founded BBS Technologies, which produced a line of server backup software products later under the name Idera. In 2003, Rick acquired Tien’s business. Rick’s buy vs. build decision matrix is nearly captured in this 2005 interview:

In 2013, Rick was succeeded by Randy Jacops, Idera’s former COO, who continues to run the business to this day. 

A three-legged giant

Idera’s portfolio spans three divisions: Data Tools, Developer Tools, and DevOps Tools:

• Data Tools include data and database management tools for monitoring, securing, migrating, and improving data systems on-premise, in the cloud, and in hybrid environments.

• Developer Tools include high productivity tools to develop applications using powerful and scalable technology stacks, ranging from C++, Delphi, JavaScript, and Java to Low Code Visual Development platforms.

• DevOps Tools include solutions that help almost 1M users through every step of building, testing, and deploying applications as quickly and efficiently as possible.

Back in 2021, Moody’s predicted that the DevOps segment would drive most of the organic momentum, growing in the low to mid-teens percent range. This compares to an overall revenue growth rate in the mid-single digit range. Not stellar, but not too bad either compared to Constellation’s near-zero organic growth rate! 

Since 2014, Idera has completed over 20 acquisitions across its three divisions. There are two main reasons why brands choose to join Idera:

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