Lenders & Private Credit
Debt funds a large share of every PE-backed cyber buyout. Private credit provides the leverage that makes take-privates and roll-ups possible, and the lending market determines how much sponsors can pay and how deals are structured.
The deep dives cover how the leverage gets structured — unitranche, ARR/recurring-revenue loans, and the leverage levels software supports, with a sources-and-uses capital-structure exhibit and how a new credit facility becomes a buy-side trigger (Private Credit & Direct Lending in Cyber Buyouts) — and the named lenders: the mega-platform direct lenders (Ares, Blue Owl, HPS, Blackstone, Apollo, Golub), the software-captive credit arms (Vista Credit, Thoma Bravo Credit), the BDC transparency layer, and the refinancing-as-trigger mechanic (The Lenders, by Name).
Market context (2025–2026)
- Record LBO financing: Direct-lending LBO financings rose to $81B in 2025 (from $73B in 2024) — the highest on record — even as deal count fell to 214 (from 248). Bigger deals, fewer of them.
- Average direct-lending LBO size: ~$380M in 2025 (+29% vs. ~$295M in 2024).
- Software concentration: Software/technology now represents >20% of BDC investments; direct lenders funded 40–70% of LBOs in 2022–23. Software often financed at ~20x EBITDA with high leverage.
- Structure of choice: Unitranche (blended senior/sub debt, single rate) dominates mid-market software/cyber buyouts for speed and certainty.
- 2026 dynamic: Banks are clawing back share in larger leveraged loans; private credit faces scrutiny on liquidity and AI-disruption risk (25–35% of private-credit portfolios carry some AI-disruption exposure).
Major private-credit lenders to software/cyber
| Lender | Type | Notes |
|---|---|---|
| Ares Management | Direct lending leader | Largest BDC (ARCC); heavy software exposure |
| Blackstone Credit (BXSL/BCRED) | Direct lending | Scaled software lender |
| Blue Owl Capital | Direct lending | Software-focused; tech lending franchise |
| Golub Capital | Mid-market direct lending | Sponsor-friendly unitranche |
| HPS Investment Partners | Direct lending | (Acquired by BlackRock, 2025) |
| Apollo (incl. MidCap) | Credit | Large-cap private credit |
| Sixth Street | Flexible/structured capital | Growth + credit |
| Owl Rock (Blue Owl) | Tech lending | |
| Vista Credit Partners | Software-specialist credit | Lends within software ecosystem |
| Thoma Bravo Credit | Software-specialist credit | Captive + third-party software lending |
| AB Private Credit, Antares, Benefit Street, KKR Credit, Carlyle (AlpInvest), TPG Angelo Gordon | Direct lending | Active in tech buyouts |
| Hercules / TriplePoint / SVB (now First Citizens) | Venture debt | Pre-buyout growth lending to startups |
Relevance to M&A
- Pricing power: A buyer's ability to pay is a function of available leverage. When credit is abundant (as in 2025), sponsors bid more aggressively — favorable for sell-side mandates.
- Capital-structure advisory: A buy-and-build platform financing tuck-ins draws on the same lender relationships; knowing the active lenders helps advise on deal financing.
- Distress signal: Software companies levered at ~20x EBITDA with decelerating growth are vulnerable — a source of carve-out and distressed-sale opportunities.
Updated 2026-08-16 18:13 UTC · © El Dorado Capital · el-doradocapital.com · Market intelligence for informational purposes only; not investment advice.