Software AG explores sale of $ 3 billion tech company

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(Bloomberg) – Software AG is exploring strategic options, including a potential sale, in one of the busiest trading years for German listed companies, according to people familiar with the matter.

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The Darmstadt, Germany-based software company, which has a market value of 2.6 billion euros ($ 3 billion), works with advisors to gauge the interest of potential buyers, including companies from private equity, the people said.

Discussions are still in their early stages and there is no certainty that he will decide to sell, the people said, asking not to be identified to discuss confidential information.

Any deal would likely require support from the Software AG Foundation, which owns over 30% of the company. The charitable foundation was established by founder Peter Schnell in the 1990s.

A representative for Software declined to comment.

Germany has proven to be one of the hottest regions in Europe for private equity transactions amid the global M&A boom. Private equity firms have spent more than $ 100 billion on deals involving a German company since the start of 2019 and hit a record value last year, according to Bloomberg data.

High-profile takeovers of German state-owned companies this year include the joint purchase by EQT AB and Hellman & Friedman of the online pet supplies group Zooplus AG, the acquisition by Brookfield Asset Management Inc. of the company real estate Alstria Office REIT-AG and Carlyle Group Inc. the takeover offer of railway infrastructure technology provider Schaltbau Holding AG.

Founded in 1969, Software is an enterprise software developer serving more than 10,000 companies. Its clients include 50% of Fortune 500 companies, according to its website. The company achieved a turnover of 599 million euros in the first nine months of the year, broadly stable compared to the same period in 2020, according to the accounts for the period.

These activities have proven popular with private equity firms, who are drawn to the stable income streams their subscription models can generate. In September, UK software group Blue Prism Group Plc recommended a £ 1.1 billion ($ 1.5 billion) takeover of Vista Equity Partners and is currently examining a potential competing offer from SS&C Technologies Holdings Inc.

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