Francisco Partners, KKR to buy minority stakes in Italy's TeamSystem, sources say

The deal comes after a steep selloff in software stocks this year, partly driven by concerns about AI's impact on the sector. Those fears have weighed heavily on valuations and threatened to derail transactions across the industry.

Against that backdrop, the transaction is an encouraging sign for private equity firms with significant exposure to software assets in their portfolios.

The transaction allows H&F to cash in part of its investment while transferring its remaining stake to another fund managed by the private equity firm, two people and another separate source said. All the people spoke on condition of anonymity because the terms are private.

Francisco Partners, KKR and TeamSystem all declined to comment.

It also demonstrates the ability of H&F to reduce its stake in a major holding through a so-called private IPO process, enabling it to return capital to investors at a time when sponsors have struggled to bring their largest portfolio companies to the public markets.