Turn/River Capital explores $2.5 billion sale of Redwood Software, sources say

By Milana Vinn

(Reuters) - Investment firm Turn/River Capital is exploring a potential sale of Redwood Software that could value the maker of automation software at about $2.5 billion including debt, according to people familiar with the matter.

San Francisco-based Turn/River has tapped Goldman Sachs to launch a sale process for Redwood that is expected to attract interest from other private equity firms, the sources said, requesting anonymity as the discussions are confidential.

Redwood could command a valuation equivalent to roughly 25 times its earnings before interest, taxes, depreciation, and amortization of about $100 million, the sources said, adding the talks are at an early stage and no deal is guaranteed.

Goldman Sachs and Redwood Software declined to comment. Turn/River Capital did not respond to a request for comment.

Frisco, Texas-based Redwood is a provider of software that automates a wide range of routine and time-consuming tasks including customer relationship management, software testing, journal entries and the processing of invoices.

The company, which employs more than 550 people worldwide, focuses on large corporate clients that have complex operations, such as Apple, Hewlett Packard Enterprise, Texas Instruments, Coca-Cola, and General Motors.

Private equity firms have traditionally been active acquirers of software businesses that generate predictable cash flows. Reuters reported earlier in August that TA Associates and Silversmith Capital are exploring a stake sale in collaboration software maker Appfire.

(Reporting by Milana Vinn in New York; Editing by Chris Reese)