Here Are All the Tech Stock Acquisitions Thoma Bravo Has Made in 2022

It's often said that time in the market is far more important than timing the market. Real money is made by patiently sitting on quality investments for the long term. However, that doesn't mean it hurts to go shopping when the opportunity to find bargains and position oneself for big investment gains is highest. 

The bear market of 2022 has created plenty of such opportunities for investors with a long-term focus, especially within the world of tech. The U.S. Federal Reserve's record interest rate hikes have humbled the valuations of high-growth software stocks, even though business growth continues. One big institutional investor, Thoma Bravo, has gone shopping this year amid the bloodbath. There are lessons to be learned here.

Thoma Bravo's tech acquisitions and investments in 2022

Thoma Bravo is a private equity investor specializing in software technology. The firm adopts what it calls a "buy and build" strategy, taking a long-term view as it helps its portfolio of companies grow and increase profitability. The companies it invests in tend to be solid but not yet category leaders, or businesses that are otherwise deficient in some area of their financial performance.

2022 was a terrible year for companies that meet these criteria. With interest rates on the rise, tech businesses lacking in profitability or exhibiting sluggish growth have been punished. Thoma Bravo was ready to pounce, and it has had an especially busy year making acquisitions.

Data source: Thoma Bravo.

In addition to these acquisitions, Thoma Bravo announced in December it had raised a record additional $32.4 billion from investors to be used for other software acquisitions. And besides outright acquisitions, Thoma Bravo also made numerous investments in other start-ups this year. 

Data source: Thoma Bravo.

Two notable themes emerge

Looking through Thoma Bravo's investment moves in 2022, two themes have clearly been the focus of the investment company's cash: cybersecurity and financial technology (fintech). Both are secular growth trends with many years of industry innovation and development ahead of them. 

Many businesses were left unprepared for remote work and cloud-based access to digital systems. Identity and access management, led by category leader Okta, has been a top growth trend the last couple years as a result. Clearly, Thoma Bravo wants in on the action with its acquisition of ForgeRock, Ping Identity, and SailPoint. 

As for the financial services and banking industries, digital experiences have also been taken more seriously the last few years. But there's a lot of work left to be done getting financial services up to speed with the times as younger generations demand a digital-first experience. Thus, the acquisition of Anaplan, Bottomline, Coupa, and Mercell. It also invested in numerous other fintech start-ups, although the bets on blockchain and crypto (including an investment in now-bankrupt FTX in 2021) don't look all that timely at the moment. 

Nevertheless, investors can learn from Thoma Bravo. First, focusing on industries experiencing lots of growth from digitization and then planning to hold those investments for the long-term can really pay off. The managing partners at Thoma Bravo have been investing in software for decades and manage over $120 billion in assets. 

And second, as the bear market has put downward pressure on stocks and private company valuations, Thoma Bravo has upped its activity and is raising more cash to make purchases. When the market is under duress, it's time to start buying stocks in earnest. Making opportunistic purchases when other investors are selling can be one of the best ways to profit over the long term.

With the market still down in the dumps in the final days of 2022, now still looks like a fantastic time to buy. Thoma Bravo's recent record fund raise seems to indicate it thinks so too.