Venture Firm To Acquire Serena Software For $1.2 BillionVenture Firm To Acquire Serena Software For $1.2 Billion

Serena Software Inc., a 25-year old software configuration and management tool company, is being acquired by a prominent Silicon Valley venture capital firm. The move by Silver Lake Partners is valued at $1.2 billion and is expected to close in Serena's first quarter of 2006. It remains subject to regulatory and shareholder approval.

Silver Lake will keep Serena's current management team in place and managers will hold a minority stake in the company. They include Mark Woodward, president of Serena since 2000; Robert Pender Jr., chief financial officer; Evan Ellis, chief operating officer; and chairman Douglas Troxel, who founded the company in 1980 to do consulting work at the Bank of America, then headquartered in San Francisco.

Silver Lake is different from other venture capital firms in that it buys out established companies with the goal of reorienting them around a core business and then rapidly growing them. Silver Lake, along with Texas Pacific Group, acquired a 65% stake in Seagate Technologies in 2000 for $2 billion. In March, it acquired disaster recovery firm SunGard Data Systems Inc. for $11.3 billion. Silver Lake also has investments in Nasdaq, Gartner, and Ameritrade.

The acquisition of Serena is an indicator that the need to control and manage software infrastructure is an area with improving revenue prospects. Serena produces TeamTrack for change requests on production applications and for issue and bug tracking. It also produces ChangeMan for automatically managing changes to an application throughout its lifecycle. Serena customers include Check Free Corp., the Robert Mondavi Winery, and online human resource provider Employease.com.