Agiloft, a Redwood City, California-based contract lifecycle management (CLM) company, could be positioned for an eventual IPO, said Jimmy Miele, a director at KKR, which acquired a majority stake in the company this month.

“We see a really strong growth path for the business – we think it could ultimately IPO,” Miele said. “But our goal is to work with the management team and leverage KKR’s resources and the value add of the other investors around the table to build the category-leading company.” As part of the deal, FTV Capital and JMI Equity made additional investments in Agiloft.

Asked about timing, Miele said KKR has “no preset plan or number of years” for an exit. “It is a relatively scaled business going after a big market.” Agiloft’s CLM software enables legal, procurement, sales and other departments to streamline and leverage their contracting efforts, according to a company press release.

The company doesn’t plan to make acquisitions but wouldn’t rule them out, Miele said. Instead, it plans to continue expanding internationally and build out its sales team. Miele said “the product is applicable to a truly global audience.”

Competitors include DocuSign [NASDAQ:DOCU], iCertis and Ironclad. There are also some 20 vendors of point solutions that are competitive in some respects, he said.

Although Agiloft worked with Moelis as its advisor on the KKR transaction, the sale did not come through a full auction process, according to Miele. KKR has been closely watching the CLM sector for years – going back as far as 2016. The PE firm began following Agiloft around 2020, when the company raised its previous funding round of USD 45m from FTV. KKR was drawn to the strong product-market fit and customer feedback on the business and “really liked its capital efficient growth,” Miele said. Agiloft was founded in 1991.

There has been a lot of M&A activity in the space including the recent acquisition of Lexion by Docusign [Nasdaq:DOCU] for USD 165m. “The space is starting to mature and we’re beginning to see the real winners break out,” Miele said. “I would put Agiloft in that category.” 

On the recent deal, Baker McKenzie served as legal advisor to Agiloft. Gibson, Dunn & Crutcher  served as legal advisor to KKR.