US private equity firm Silver Lake has secured over 85 percent of the share capital and voting rights of Software AG, the second biggest Germany-based provider of business software after SAP. A press note from Software AG put its total share in the firm at 85.1 percent; an equivalent note from Silver Lake put it at 87 percent.
The deal values Software AG at €2.6bn. The transaction has gone via a holding company called Mosel Bidco, which is “controlled by funds managed or advised” by Silver Lake, said a statement. Software AG shareholders will now receive €32 in return for each tendered share in the company.
The takeover has frustrated London-based Schroders, which owns eight percent of the company, and had bid €38 per share. Schroders complained at the “unwillingness” of Software AG’s board in Darmstadt to engage with other potential bidders, and to accept an undervalued bid, according to The Financial Times.
Software AG, a perennial in Gartner’s latest ‘magic quadrant’ for industrial IoT and also for enterprise architecture tools, entered into a “strategic partnership” with Silver Lake in late 2021, with Silver Lake pumping €344 million into the firm. It was the first time a US firm had completed a private investment in public equity (PIPE) deal in Germany.
The German firm said at the time it was in position to access a bigger share of its total addressable market (TAM) for business intelligence tools, worth around €61 billion and forecast to grow at 16 percent per year through 2026. It said it would “double down” on its strategy, and drive “value-creating” acquisitions in new segments.
It remains focused on expansion in North America, in particular. Software AG has around 5,000 employees in around 70 countries; its annual revenue is around €950 million. The deal will enable Software AG to “implement its deepened strategic partnership with Silver Lake to accelerate the execution of the company’s strategy”, it stated.
Christian Lucas, co-head at Silver Lake in the Europe, Middle East, and Africa region, commented: “We are pleased to have successfully closed our takeover offer for Software AG and we now look forward to working with the management team to execute the company’s multi-year transformation plan.”
