Warburg Pincus to Invest in Cloud-Based Facilities Manager

Despite the torrent of money flowing into the technology sector, software to manage building maintenance services seems like an unlikely target for investors.

But Warburg Pincus thinks the field could yield healthy returns.

The investment firm plans to announce on Monday that it will invest up to $100 million in Dude Solutions, a provider of cloud-based software aimed at helping schools, hospitals and government agencies manage building maintenance.

According to Alex Berzofsky, a managing director at Warburg Pincus, the private equity firm has long been interested in investing in the field. The thesis: the sector is a fast-growing one, as institutions look to cut costs by more efficiently managing their janitorial and custodial services.

Cloud-based service providers of all stripes have become popular targets for private equity firms and venture capital funds, as investors zero in on both the fast growth of the industry and the steady payments such companies collect.

Mr. Berzofsky said his firm had known Dude Solutions’s chief executive, Kent Hudson, for years. But Mr. Hudson turned down Warburg Pincus’s approaches for years, believing the time was not right.

He changed his mind within the last few months, as Dude Solutions came around to the idea that additional capital could help it continue to grow. What became the $100 million investment closed last week.

“They thought we could add a lot of value,” Mr. Berzofsky said by phone. “We have a lot of other investments in companies in and around this space.”

Dude Solutions, based in Cary, N.C., is nearly 15 years old and has more than 8,000 clients, the company said in a statement. Mr. Berzofsky says he believes additional growth will come as Dude Solutions continues to push into hospital and government work, which it first began in 2008 with the creation of FacilityDude.

Gov. Pat McCrory of North Carolina, who is expected to participate in the official announcement of the Warburg Pincus investment, said in a statement: “The company’s success not only means new jobs, but the services they offer help taxpayers get the maximum benefit out of their investment in schools and other public facilities.”