Software M&A: Blancco, Backed By Francisco Partners, Seeks Circular Economy, Sustainability and E-Waste Reduction Acquisitions

Private equity firm Francisco Partners, which recently acquired software provider Blancco Technology Group, is seeking tuck-in acquisitions to further accelerate Blancco's circular economy, sustainability and e-waste reduction software businesses.

In a prepared statement about the strategy, Francisco Partners VP Ravi Bhatt said: "Sustainability and e-waste reduction are increasing strategic priorities for customers of all sizes globally, and we see tremendous organic and inorganic growth opportunities for Blancco worldwide.” 

"Inorganic growth" is jargon for mergers and acquisitions. Bhatt did not mention a timeframe or budget figure for potential Blancco acquisitions.

Related: See all M&A deals involving sustainability, green IT & renewable energy listed here.

Why Francisco Partners Acquired Blancco: About the M&A Deal

Francisco Partners completed the Blancco acquisition for an equity valuation of approximately £175 million (roughly US$220.1 million) on December 5, 2023. Blancco, based in London (UK) and Austin, Texas (United States), develops circular economy software and technologies.

Blancco's software allows partners and customers -- including enterprises, IT asset disposition (ITAD) vendors and recyclers -- to operate more sustainability.

For instance, Blancco's software was used to erase 63.8 million devices during the company's fiscal year 2023 (July 2022 to June 2023), an increase of 11.2 million devices compared to the previous year. Those devices can now be reused, recycled, donated, or sold through the circular economy, the company said. The result: Blancco prevented roughly 107 million kilograms (236 million pounds) of IT devices -- about the weight of 583 jumbo jets -- from potentially entering landfills in fiscal year 2023, the company asserted.

About the buyer: Francisco Partners, founded in 1999, is a private equity firm based in San Francisco, California. The company has invested in more than 400 technology companies, and the firm has raised roughly $5 billion in capital to date.

Francisco Partners is well-known in and around the IT services and software sectors. Current portfolio companies include cloud communications service provider 8x8; remote IT support software firm GoTo; security technology provider SonicWall; and cloud analytics platform provider Sumo Logic.

Francisco Partners Acquires Blancco: Executive Perspectives

In a prepared statement about the Francisco Partners' deal, Blancco CEO Matt Jones said: “Since its founding 26 years ago, Blancco has created and delivered innovative solutions, with a focus on building a world class data eraser and diagnostic software platform. We are pleased to partner with Francisco Partners, who are committed to continuing to build upon the company’s strong foundation and achieve its full potential. I want to thank each employee for their dedication to Blancco and contributing to our continued success.”

Added Brian Decker, partner at Francisco Partners, and Karl Shum, principal at Francisco Partners: “We have been very impressed with the leading market position that Blancco has established through its best-in-class solutions and are thrilled to partner with Blancco’s management team to drive the next phase of expansion."

Multiple advisors assisted the M&A deal. For instance, Rothschild & Co served as financial adviser and Travers Smith LLP acted as legal adviser to Blancco. Also, Canaccord Genuity served as financial adviser and Ropes & Gray International LLP acted as legal adviser to Francisco Partners.

M&A Activity: Sustainability Software and E-Waste Reduction

Meanwhile, M&A activity involving sustainability and e-waste reduction companies remains steady. Example deals include:

• November 2023: Private equity and circular economy investment firm Closed Loop Partners acquired a majority stake in Sage Sustainable Electronics for IT asset disposition (ITAD) services.
• November 2023: Iron Mountain acquired Regency Technologies, a provider of ITAD services in the United States. The purchase price was $200 million, and the valuation was roughly 7.5 times annual EBITDA (earnings before interest, taxes, depreciation and amortization), Iron Mountain said.
• October 2023: Full Circle Electronics (FCE), backed by private equity firm Tide Rock, acquired an ITAD business from SIPI Asset Recovery.
• June 2023: Elemental Holding Group acquired Colt Recycling, an e-waste recycler and ITAD company.

E-Waste Reduction: Annual Spending and Market Forecast

What's driving the M&A activity? The short answer involves customer demand for e-waste and circular economy services. Indeed, the global e-waste management industry will reach $244.56 billion by 2032, up from $57.81 billion in 2022, according to Allied Market Research. That's a 15.7% compound annual growth rate (CAGR), the market research firm said.