Leverage Software CEO Mike Walsh says his company is in discussions with private equity investors with the goal of raising money to buy smaller rivals.

"We're hearing from private equity companies every day," Walsh told me when I tracked him down on the floor of the Web 2.0 show.

Leverage, which provides white-label social networking platforms to enterprise customers, is profitable, according to Walsh. While he wouldn't provide an exact annual revenue figure, he described it as "under $20 million."

When I asked if he was thinking about selling out, he shook his head and said he's looking instead to buy other companies in the crowded market, which he says is due for consolidation.

The company signed up 200 customers, including big names like Microsoft, Hewlett-Packard and salesforce.com.