Intel's decision to sell Wind River to TPG Capital has been welcomed by Jim Douglas, the CEO of software company

2 min read

Wind River is once again a standalone business after Intel concluded its sale of the vendor of embedded operating systems to TPG Capital (TPG), the global private equity platform of alternative asset firm TPG.

The sale of Wind River had been announced earlier this year.

According to Intel’s top IoT executive, Tom Lantzsch, the sale of Wind River was intended as a move “to sharpen our focus on growth opportunities that align to Intel’s data-centric strategy,” despite industrial IoT remaining a part of that strategy.

While Wind River had been part of Intel’s IoT Group, it accounted for only a small percentage of that business.

Wind River, which has been in business for 40 years, supplies the software that runs the computing systems that support modern infrastructure, and operates across a diverse range of verticals in both the commercial and military space.

The company will be led by Wind River President and now Chief Executive Officer Jim Douglas, while Nehal Raj, Partner and Head of Technology investing at TPG, will serve as Chairman of the company’s Board of Directors.

Speaking to New Electronics, Douglas said that he welcomed the move suggesting that the partnership with TPG would open up a host of new opportunities to innovate and would help the company to “evolve our industry-leading software portfolio.”

For TPG the purchase of Wind River has bought several attractive opportunities going forward, according to Douglas.

"We struggled under Intel to make any deals as it didn't fit with their financial logic."
Jim Douglas

“It’s kind of two-fold, sector specific from an investment perspective,” he explained. “Firstly, looking at IoT in general but also at the rejuvenation of industrial infrastructure – much of which needs updating. It provides a great growth opportunity for the business.”

With Intel’s decision to divest itself of Wind River both companies worked closely in the process to identify a suitable buyer.

According to Douglas, ”We were looking for a future partner in growth and saw the value of a different structure i.e. outside Intel, and the opportunities that would bring, in terms of faster growth.

“We were in the fortunate position of engaging with TPG. They saw us as an asset they wanted to grow, rather than as something they could strip. There is certainly an alignment between the two businesses as to how we want to execute and accelerate the growth curve that we are on. And TPG’s vast portfolio of investments and contacts provides us with another major advantage.”

When it was decided to sell Wind River, things moved quickly but in an orderly way, according to Douglas.

“We had our own separate networks and enterprise resource planning and customer relationship management systems while we were a subsidiary under Intel, so it proved to be a very simple divestiture. We came to TPG with a full management team, so there’s been the added benefit of continuity both within the business a well as how we interact with our customers.”

Douglas said that he was looking to ‘fill-out’ the board and further announcements would be made in ‘due course’.

He accepted that there had been ‘certain limitations’ under Intel’s ownership because of the company’s focus on silicon.

“Under Intel’s ownership, and this isn’t a criticism, it was just frustrating, the focus, quite naturally, was on silicon. That made far more sense financially for them, while we wanted to invest in software necessary for the IoT domain. That hamstrung us as a standalone entity and one that had its own growth objectives,” Douglas said.

As an Intel subsidiary, Wind River also “lost the right to have strategic relationships with a lot of the other silicon suppliers,” Douglas said.

“Our newfound independence will allow us to grow a lot faster and be more focused. More importantly, we can now turn our attention to mergers and acquisitions as part of a combined organic and non-organic growth strategy.

“We struggled under Intel to make any deals as it didn’t fit with their financial logic.”