Bain Capital recently raised a fresh $7.3 billion fund for buyouts, but the second deal in that fund departs from the buyout playbook.
Bain, the big private equity firm, is expected to announce on Tuesday that it has agreed to invest in Viewpoint Construction Software, a company that makes software for the construction industry. The deal, for a majority stake, is worth about $230 million, according to people briefed on the matter who were not authorized to publicly discuss the terms.
The investment shows Bain’s willingness to make investments that are smaller than the leveraged buyouts for which it is better known. Other big private equity firms are also increasingly taking smaller stakes in companies, as megadeals fall from favor.
Viewpoint, which is based in Portland, Ore., and is more than 35 years old, has previously taken institutional capital. Through the new deal, Bain is buying stakes from two investment firms, Updata Partners and TA Associates.
The chairman and chief executive of Viewpoint, Jay Haladay, along with his family, will remain shareholders, rolling equity into the deal.
“We think Viewpoint has emerged as the real leader and best-in-class company within software and technology solutions for contractors,” David Humphrey, a managing director at Bain Capital, said in an interview. “We think there is a lot of room to go for growth and ways in which Viewpoint can continue to support its customers and enhance its offerings.”
Last week, Bain finished raising its new private equity fund with $6.5 billion in outside commitments and $800 million from its employees. The fund’s first deal was the acquisition of a Brazilian health and dental insurance company, Grupo NotreDame Intermédica.
Viewpoint had been in discussions with Bain for more than six months, Mr. Haladay said. There was no auction process before the deal.
Bain, which is based in Boston, has shown a fondness for technology companies. Last May, the firm and other investors agreed to buy BMC Software for about $6.9 billion. And in November, Bain agreed to sell Applied Systems, a software company that focuses on the insurance industry, to another private equity firm.
Viewpoint has grown rapidly as construction has picked up after the recession. The company says more than 8,000 contractors use its software, which helps construction companies manage projects with the aim of improving efficiency and safety.
Its revenue since 2009 has grown an average of more than 40 percent a year, according to the company. This year, it expects to have revenue of about $140 million, Mr. Haladay said.
“Contractors are starting to realize how important good information is to the many components that make up a project,” Mr. Haladay said.
Viewpoint was advised in the transaction by Credit Suisse and Canaccord Genuity, along with the law firm Goodwin Procter. Bain Capital was advised by Wells Fargo and Kirkland & Ellis.