ARTICLE
27 December 2024

ServiceTitan's Successful IPO Stirs Middle-Market Private Equity

R
Riveron

Contributor

Founded in 2006, Riveron professionals simplify and solve complex business problems. We partner with CFOs, private equity firms, and other stakeholders to maximize outcomes.

Riveron teams bring industry perspective and a full suite of solutions focused on the office of the CFO, M&A, and distress.

In 2023, the company was acquired by affiliates of Kohlberg & Company from H.I.G. Capital – which is continuing its partnership with Riveron through a minority investment. Riveron has 18 global offices.

In recent years, many middle-market private equity funds have (rightfully) viewed IPOs as a refinancing mechanism for performing portfolio companies, instead of an avenue for exit.
United States Corporate/Commercial Law

In recent years, many middle-market private equity funds have (rightfully) viewed IPOs as a refinancing mechanism for performing portfolio companies, instead of an avenue for exit.

With the smashing success of ServiceTitan's IPO in the post-ZIRP era, the case is being made for middle-market PE funds and management teams who would normally not find an IPO path appealing to reconsider their options, especially as market demand is signaling a significant appetite for new publicly-traded companies.

With this change in public market sentiment, the "dual-track" process may roar back as leaders evaluate testing the IPO waters while simultaneously marketing the business to other PE funds or strategic buyers. Regardless of whether PE sponsors are deciding between an IPO journey versus a strategic sale of a company, the processes can be complex. While the IPO process will typically continue to be a bigger lift for middle-market companies, a portfolio company still needs to ensure sell-side readiness in order to pass the diligence required by a PE or strategic buyer and culminate in a successful transaction close. The similar efforts required for either route will certainly narrow the decision gap.

A headline from Bloomberg indicated the success of the IPO: "ServiceTitan (TTAN) Shares Open 42% Above IPO Price, Raising $624.8 Million." The outlet also reported that "the first-day increase is the largest for a US IPO raising more than $400 million since Reddit Inc.'s debut in March ..."

www.bloomberg.com/...

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