Minneapolis-based Datasite, the provider of virtual data room software services to principals involved in mergers and acquisitions, has been acquired by the private-equity firm CapVest Partners LP.

"CapVest has a history of transforming the size and scale of its portfolio companies so these companies can realize their full potential," said Datasite CEO Rusty Wiley in a news release. "With their backing we're ready for our next phase of growth, which will include the introduction of new and innovative technologies to make transactions faster, simpler and more secure, enabling our customers to achieve better deal outcomes."

Terms were not disclosed for the deal.

CapVest is a London-based private-equity firm with about $5 billion in commitments and has completed over 150 transactions principally in Europe, Scandinavia, Ireland and North America across a variety of industries.

Datasite, formerly known as Merrill Corp., has transformed its business over the past six years by divesting historical printing businesses to concentrate on its software-as-a-service model centered on its Datasite product for merger-and-acquisition deal professionals. The company currently has 750 employees in 25 locations in 13 countries.

"It's a natural next step for the company," Wiley said in an interview.

Wiley said the company's previous owners were distressed debt investors who were likely to launch a sales process next year. Wiley noted that CapVest principals reached out to initiate deal discussions.

"It was time for our investors to rotate out," Wiley said.

The new investors are maintaining Datasite's management team, including Wiley, and bring with them a growth investment focus.

"They buy companies to do substantial transformations of companies," Wiley said of CapVest's investment focus. "They are more about transformational growth."

Wiley would not disclose financials but did say Datasite has been profitable and growing at double-digit growth rates that last few years and plans to increase employment at the company by 20% in 2021.

The investment from CapVest will help Datasite's continued evolution from a single product company to a company offering a platform of services for deal professionals throughout the M&A deal life cycle.

"The thing that will be different with CapVest is that we won't solely be focused on organic growth," Wiley said. "We will do more acquisitions to grow more rapidly."

Recent company performance at Datasite has given both sides more confidence in the merits of the deal. After deal activity nearly dried up in April and May it has been increasing since.

"We've had a super resilient business this year," Wiley said. "We've had four of our biggest months ever in the last five months."

And Wiley is forecasting 2021 deal activity to continue improve.

"You have $3 trillion on the sidelines right now and the credit markets are super attractive right now," Wiley noted. "We think next year is going to be a very good year."

Patrick Kennedy • 612-673-7926