Ex Libris purchased by another equity firm

http://www.thedigitalshift.com/2012/11/ils/ex-libris-group-acquired-by-golden-gate-capital/

This is the third equity firm to own Ex Libris since 2006. Francisco Partners in 2006, Leeds Equity in 2009, now Golden Gate. Looks like 3 years is about how long an equity firm wants to hold onto a company, eh? Private equity firms are generally in the business of  buying companies, increasing their value, and then reselling them to someone else at a higher value.

(That is, when they don’t ‘maximize shareholder value’ in some other way, such as liquidation.  Recently, the reason you may have heard of ‘private equity firms’ is by hearing about example Bain Capital, where Mitt Romney was a co-founder, accused of making decisions with their companies that were good for their profits, but not good for the underlying  businesses, employees, or customers). 

Over the past few years, as the digitalshift article linked above notes, private equity firms have been getting into library vendors.

I’m not sure if in other sectors (not library vendors) its’ common for a chain of equity partners to keep selling to another private equity firm down the line! (Anyone know?) It does seem like a path that eventually needs to have a different exit point, there aren’t an infinite number of equity firms willing to pay more than the last one, right?

The digitalshift article above notes that Golden Gate focuses on software firms, which I think is a good sign — you’d want the owners of a library vendor to be familiar with software companies, as a library vendor is a software company.  Hopefully they will continue to treat Ex Libris in a way good for customers and existing employees.  One way to increase value is investment in R&D, Ex Libris has been heavily investing in R&D with Alma, so apparently past owners took that approach (succesfully since they got out?) — but really I’m just guessing here at all of this, I am not familiar with private equity firms strategies and decision-making processes.

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