BY Richard Summerfield
Private equity firm Silver Lake has agreed to acquire German software developer Software AG in a deal worth $2.42bn.
Under the terms of the deal, Silver Lake will pay €30 per share in cash to acquire the company, an offer which represents a premium of 53 percent to Software AG’s closing price of €19.59 on Thursday, the last day of trading before rumours of a deal emerged, and a premium of 48 percent to the company’s three-month volume-weighted average share price.
The deal is subject to an acceptance threshold of 50 percent plus one share and further customary conditions, including regulatory clearances. The transaction is fully funded with equity and debt financing in place.
“The Management Board welcomes the opportunity of a deepened strategic partnership with Silver Lake, following a thorough analysis of the Offer,” said Sanjay Brahmawar, chief executive of Software AG. “Silver Lake has already demonstrated strong support for our strategic vision and values.
“With deep expertise in the integration market, experience in transitioning businesses to SaaS-first models and extensive M&A capabilities, Silver Lake is a valuable long-term partner for Software AG and our customers,” he continued. “A successful transaction would enable us to accelerate the execution of our strategy, double down on innovation in integration for customers, and provide greater opportunities to attract and develop talent.”
In February 2022, Silver Lake invested €344m in Software AG’s convertible bond, which upon conversion would represent nearly 9 percent of issued Software AG shares, the company said in a statement.
“The offer of €30.00 per share represents an attractive premium for our shareholders,” said Daniela Bünger, chief financial officer of Software AG. “The commitment of the Software AG Foundation as the company’s largest investor to sell 25.1 percent is testament to the attractiveness of the cash offer. Ahead of our full financial results announcement next Thursday, I can confirm that all guidance metrics in the first quarter are in line with market expectations and reconfirm our full year guidance for 2023.”
“We welcome the proposed acquisition of Software AG by Silver Lake,” said Peter Schnell, chief executive of the Software AG Foundation, the company’s largest investor, and co-founder and former chief executive of Software AG. “Silver Lake have been great partners to Software AG and to us since their initial investment, and through working together on the future of the company we have developed a deep and trusted relationship.”
The Software AG Foundation will continue to hold a 5 percent stake in the company, post-close, according to Silver Lake.
News: Silver Lake to buy Germany's Software AG in $2.42 billion deal