It will be the end of one of Silver Lake’s longest-held investments and the outfit bought IPC from Goldman Sachs Group private equity arm in 2006 for $800 million. Ironically it has hired Goldman and Evercore Partners to auction IPC off.
IPC makes about $160 million a year and could be valued at more than $1.4 billion in a sale, including debt. It makes specialised telephony systems for financial institutions ranging from investment banks to hedge funds. It is present in 5,000 customer sites in more than 60 countries.
IPC could be become a little more of a risky investment as the outfit seeks faster growth in sales of data and network services to financial services customers. These services are highly commoditized and IPC’s competitors in this area have more dosh to fight the upstart.
In August, IPC announced it had named Neil Barua, a Silver Lake operating partner and interim chief executive of IPC since February, as its permanent CEO.
Private equity funds typically hold companies three to seven years, making Silver Lake’s ownership of IPC for more than eight years unusual.
Silver Lake also wants to get rid of another financial technology company this year – the high-frequency trading outfit Virtu Financial.