Francisco Partners has launched a debt practice by bring on an industry veteran with experience in restructuring and guiding technology companies, the San Francisco-based private equity firm’s specialty.
Scott Eisenberg of GSO Capital Partners has joined Francisco Partners to start a credit group, according to a source familiar with the situation. Eisenberg spent a decade at Blackstone Group’s credit arm, where he was a managing director, according to his LinkedIn profile.
Before GSO, he spent time at JPMorgan, where he researched technology and data networking sectors, and at Lehman Brothers, where worked in the media and communication fund of the now-defunct investment bank’s private equity group, according to a Bloomberg biography.
Eisenberg did not respond to request for comment, while GSO declined to comment.
Francisco Partners, which has offices in San Francisco and London, puts money into tech companies via buyouts and strategic investments. The firm specifically focuses on software and service; security systems; internet, healthcare information technology; financial technology and payments; and communications companies.
While at New York-based GSO, Eisenberg participated in deals involving working out distressed tech companies, including digital marketing company Local Insight Media Holdings, which emerged from its US Chapter 11 bankruptcy case in August 2011 as The Berry Company but is now known as Vivial. Eisenberg held a seat on their board, the company announced at the time. It was not clear if he still held that position.
In addition, Eisenberg was involved in the restructuring of Velti, a mobile marketing and advertising company, through which GSO scooped up the San Francisco-based business’ secured debt from HSBC. The deal was agreed to before Velti’s November 2013 bankruptcy filing, meaning it sought court protection with an offer in hand for parts of its business.
“We look forward to working with [Velti] to execute on the growth potential of the mobile marketing industry,” he said in a statement announcing the transaction. “The increasingly important need for businesses to have effective and reliable mobile communication with their customers requires a sophisticated and scalable technology.”
GSO ended up buying assets that included Velti’s operations in India, The Netherlands, the UK and the US. The deal was for at least $48.12 million, consisting of debt forgiveness along with cash and debt settlements, according to the sale documents.
Eisenberg joined multiple boards of directors for technology businesses in addition to The Berry Company. He joined the board of Axonix, a mobile advertising exchange platform operator that was a partnership between Telefónica and GSO, which both provided financial backing for the company. He also joined the board of LocalVox Media, a New York-based social media marketer for small and mid-sized businesses, after Talus Holdings, a GSO-owned entity, led a $7.4 million financing round.
Francisco Partners most recently raised a $600 million Agility Fund, which targets smaller technology deals, it said in an October announcement. Its most recent buyout fund, Francisco Partners IV, closed in February 2015 raised $2.88 billion to invest in mid-market tech companies. In its most recent deal, announced Tuesday, Francisco Partners bought Vendavo, an analytics firm that advises businesses on how to improve profitability.
The newly launched credit arm puts Francisco Partners alongside other tech-focused private equity firms that have credit investing platforms, including Vista Equity Partners and Silver Lake Partners.
Vista is nearing its $1 billion target for its second software debt fund, which would invest in both primary loans issue and purchase loans on the secondaries market. Silver Lake is currently investing a $75 million venture debt fund, according to PDI data. Sources have also told Private Debt Investor that Thoma Bravo, another tech private equity powerhouse, is looking to start a credit arm.