Hg agrees Rightsline buyout as software dealmaking shows signs of recovery

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Hg acquires Rightsline

Highlights

Hg agrees to acquire Rightsline for about $500 million including debt, marking its first major buyout since February's AI-driven software sell-off.
The S&P North American technology software index has rebounded 25% from its April low, signaling tentative improvement in sector sentiment.
Hg postponed the London listing of Visma (valued at 19 billion euros) following sector turbulence, as investors become more selective amid AI disruption concerns.

Rightsline acquisition signals return to market

As first reported by Financial Times, Hg has agreed to buy Rightsline in a deal valued at about $500 million including debt, according to people familiar with the matter. The California company provides software for managing rights and royalties, and its clients include Disney, the BBC and Warner Bros Discovery.

The transaction marks the first new buyout that the $110 billion asset manager has agreed since AI advances hit software valuations in February. Hg is closely watched across the European software market because of its scale and influence, particularly after raising almost $30 billion across three funds last year.

Rightsline's platform helps large companies manage complex intellectual property licensing across countries and languages. One person familiar with the deal says the business is seen as harder for AI to replicate because its software is built around customer data and can map billions of rights combinations tied to characters, plot lines and other intellectual property.

AI pressure reshapes software investment outlook

Software-as-a-service has been a core target for private equity and credit investors over the past decade because recurring revenues and sticky customer bases support higher debt loads. That model comes under pressure earlier this year after new tools from Anthropic trigger a sell-off in listed software companies, an episode investors dub the SaaSpocalypse.

Advisers say uncertainty over how AI affects long-term software values has made it harder for private equity firms to win backing for new deals. Even so, investors now say the market is becoming more selective and is drawing clearer distinctions between software companies when assessing disruption risk.

There are tentative signs of improvement, with the S&P North American technology software index up by a quarter from its April low. Hg itself was forced to delay the planned London listing of Visma, the accounting software company valued at 19 billion euros, after the sector sell-off; Hg declines to comment, while Rightsline does not respond to a request for comment.

In our earlier report on AI-driven labor-market risks, we covered how prediction-market pricing was pointing to elevated odds of a sharp rise in U.S. unemployment before 2030 alongside expectations of AI-linked layoffs. The piece also highlighted policy concerns raised by Pope Leo and noted that job weakness can be concentrated in specific regions even when the national picture looks relatively stable.

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