SmartBear Software, a Somerville, MA-based provider of tools for software developers and testers, has sold a majority stake in the company to private equity firm Francisco Partners.
The terms weren’t publicly disclosed, but a source with knowledge of the deal tells Xconomy the transaction has an enterprise value of $410 million.
SmartBear Software was formed a few years ago in a merger of three companies: Automated QA, Pragmatic Software, and SmartBear. The merger was a private equity roll-up led by Insight Venture Partners, SmartBear’s lead investor until the purchase by Francisco Partners.
The combined company was initially based in Beverly, MA, but later moved to the Assembly Row area in Somerville. SmartBear currently has 340 employees, including 175 in Somerville, with plans to hire more people around the world, a spokesperson says.
More than 5 million software professionals worldwide use SmartBear’s tools for tasks like software testing, reviewing code, and monitoring application performance. The company is profitable and has been growing annual revenues by double digits for more than five years, according to a press release.
SmartBear says its growth is being driven by the increasing importance of software in every type of business; the growing complexity of software, especially given expanding combinations of applications and devices; and the emphasis on connecting applications and software products through APIs (application programming interfaces). Those trends translate to growing demand for easy-to-use tools for building software applications and ensuring their quality, the company says.
SmartBear is at least the third nine-figure exit in the Boston-area tech sector this year. Others include SimpliVity, which was sold for $650 million to Hewlett Packard Enterprise, and Veracode, which was sold for $614 million to CA Technologies.
