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Capstone Partners Advises Vector Software on its Acquisition by Vector Informatik

February 2017

San Diego, CA – Capstone Partners LLC, an award-winning investment banking firm, announced that it has successfully advised Vector Software, Inc. on its acquisition by Vector Informatik GmbH.  Capstone Partners acted as exclusive financial advisor to Vector Software on this transaction, the terms of which were not disclosed.

Vector Software, founded in 1990 by John Paliotta and Bill McCaffrey, is the leading provider of dynamic automated test tools for embedded software applications in industries with safety and validation requirements such as automotive, aerospace, industrial IoT, medical devices and railway.  The VectorCAST environment enables software development teams to easily automate complex testing tasks to improve software quality and reliability and accelerate time-to-market release cycles.  Vector Software has more than 300 customers, approximately 125 of which have annual revenues exceeding $1.0 billion.  Gartner, a global technology research company, named Vector Software a “Cool Vendor” in embedded software and systems in 2016.

John Paliotta, Co-Founder and CTO of Vector Software commented, “Capstone did a great job guiding us through the acquisition process, not only producing the mountain of data that was needed, but most importantly providing calm counsel during the inevitable ups and downs of the process”

David Michaels, Managing Director of Capstone, commented “John Paliotta and Bill McCaffrey have built a great automated testing business with marquee customers and a highly-differentiated product offering.  The fact that they have accomplished this without outside capital is a testament to their talent and perseverance.  The strategic and cultural fit with Vector Informatik is very compelling and we are delighted to have played a role in helping Vector Software consummate a transaction that will pave the way for the next chapter of the company’s success.”

Vector Informatik, a German-based specialist for the development and testing of automotive electronics, has extensive experience in providing system and functional testing solutions for automotive ECUs and distributed embedded systems.  This acquisition grows that testing portfolio by adding VectorCAST, a code-centric software testing solution that is used extensively in the verification of software with high quality and safety requirements.  In addition, the merger will extend Vector Informatik’s engagement with industries beyond the automotive market.

“Over the last 25 years, the Vector Software team has built a great product and a great brand,” stated Paliotta.  “We could not be more pleased to be joining Vector Informatik, a company that has complimentary products, but also a similar engineering-driven and customer-focused culture.”

Thomas Riegraf, Managing Director of Vector Informatik, added, “This acquisition is a major building block of Vector’s strategy to offer a comprehensive solution for the automated testing of embedded and connected systems.  We already have started working to link and integrate the products of both companies.  Our joint teams are highly motivated to add tangible functionality across all Vector testing products over the next years.”