Perforce leads a list of fast-growing, privately held Twin Cities software firms

Perforce Software, the Minneapolis-based software firm, is on a run of acquisition-fueled growth.

Perforce, owned since early 2018 by private-equity firm Clearlake Capital, recently acquired Colorado-based Rogue Wave Software in an unspecified-terms transaction that should help Perforce reach its sales goal of about $600 million by 2021.

"The secret sauce for us is we buy category-leading niche firms," on top of organic sales growth, said Perforce CEO Mark Ties, 54, a veteran financial and operations executive.

The Rogue Wave acquisition is the sixth by Perforce in the last three years. It's working an aggressive strategy under Clearlake, which acquired Perforce in early 2018 from another big private-equity outfit, Summit Partners.

Private-equity firms typically own portfolio companies for three to five years, attempting to build value through acquisitions and growth, before selling those acquisitions to another institutional buyer, or taking them public. The bet is that good performance and the strong economy will persist in creating a value-increasing environment for well-run software developers.

Minneapolis-based Perforce finished 2018 with revenue of $150 million and 450 employees around the globe, who serve customers in 80 countries, including more than half of the member companies of the Fortune 500.

The Rogue Wave acquisition brings employment to 900 and consolidated revenue to about $300 million.

The company plans to double revenue within 24 months through organic growth and acquisitions.

The consolidated Perforce is already larger than publicly held SPS Commerce, perhaps the Twin Cities' best-known software firm, which has revenue of about $250 million and a market value of more than $1.5 billion.

Perforce is building out its development-operations software portfolio used by client technology-development teams.

For example, Marriot Hotels uses Rogue Wave's API testing tool to secure the information in Marriott's online databases, Ties said. Perforce clients include Seagate, Toshiba, Mitsubishi and TRW.

"The momentum at both Perforce and Rogue Wave is impressive," Clearlake partner Prashant Mehrotra said last month. "We are excited to continue to support Mark and the [combined] management team as they drive consolidation in the industry and increase the breadth of their platform."

The Twin Cities, blessed with a diverse economy, is a secondary-sized market for software firms.

Ties noted that the Twin Cities has no huge software firms, such as found around Boston or the San Francisco Bay Area. However, it "has a lot of talent," thousands of software workers who labor in the IT operations of Cargill, Target, UnitedHealth and other information-driven companies. That means thousands of IT workers automate, run and analyze their operations.

Ties, a veteran public accountant, CFO and operations executive, joined Perforce Chairwoman Janet Dryer at HelpSystems, the Eden Prairie-based software growth firm. Dryer, 58, was the firm's third employee 35 years ago.

The sales and marketing professional ran HelpSystems for years under majority-owner Summit Partners before retiring in 2014. She came out of retirement in 2015 at the urging of a partner at Summit Partners, who wanted her to run then-small, San Francisco-based Perforce.

Dryer agreed, with the condition that the headquarters move to Minneapolis. Dryer was succeeded at HelpSystems by veteran software CEO Chris Heim, 56, who previously ran Amcom, HighJump and other software growers. He and his team have built HelpSystems, which last year had grown to more than $200 million in revenue and 600-plus employees.

Earlier this month, HelpSystems, no acquisition slouch, acquired Core Security, which HelpSystems described as "industry-leading solutions for identity governance and administration, penetration testing, threat detection, and vulnerability management."

HelpSystems Vice President Mike Devine said the Core Security acquisition will add 120 employees and $30 million in revenue.

The cyberthreat landscape is growing with new cyberattacks, malware and viruses targeting data and systems.

"We've learned that many companies simply lack the resources and solutions needed to safeguard their corporate assets properly at all times," Heim said. "We're now in a better position to fully support their initiatives across any platform with a multipronged approach to cybersecurity."

Meanwhile, Minneapolis software firm Jamf, which provides management tools for Apple products, also is growing fast.

It recently acquired ZuluDesk, a Dutch distributor of Apple gear to schools and universities, for an unspecified sum.

Jamf, started in 2002, is most recently owned by Vista Equity Partners, another private-equity outfit that invests in tech firms. Jamf said 2018 revenue grew 30 percent. While Jamf closely guards its numbers, revenue last year is estimated at $150 million based on previously published data for 2017.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.