Tech charge as Verdane buys stakes in Meltwater, Jobylon

Silver Lake’s Software AG sells unit to IBM.

Tech has been one of the busier sectors this year and there’s no sign of that changing as we get into the tail-end of 2023.

First up, we reveal that Verdane is acquiring stakes in software companies Meltwater and Jobylon. The companies have some big-name clients, such as Google, Kellogg’s, PwC and McDonald’s.

Next, we look at Silver Lake-backed Software AG selling one of its business units to IBM for a hefty €2.13 billion.

We then speak to Astorg about the private equity firm’s investment in Sofico, a provider of software and services to the automotive leasing industry.

We then move away from tech to another busy sector this year, healthcare, where Eurazeo is in talks to sell ophthalmic surgery platform DORC.

Finishing up, we look at a potential tie-up between Tikehau Capital and Nikko Asset Management.

Double investment

Verdane is investing in Fountain Venture’s portfolio to acquire stakes in software companies Meltwater and Jobylon, PE Hub Europe’s Nina Lindholm revealed this morning.

Meltwater offers software products across the media, social, consumer and sales intelligence segments. Brands such as Google, Kellogg’s and AstraZeneca use Meltwater’s services. The company’s total annual recurring revenue in 2022 was $478 million and adjusted EBIDTA was $36 million. It has 2,300 employees, 27,000 corporate customers worldwide and 50 offices globally.

Jobylon is a recruiting software provider. Its customers include PwC, Santander and McDonald’s.

“We have a super flexible mandate that allows us to cater for different deals,” Joakim Kjemperud, principal at Verdane, told Nina. “That can be minority or majority positions, single investments or portfolio investments. This deal with Fountain Venture is really leveraging that flexibility.”

Read more about Verdane’s plans for the companies here.

Split

Sticking with software, and Silver Lake-backed tech company Software AG has agreed to sell its integration platform as a service business, comprising webMethods and StreamSets, to IBM for €2.13 billion.

The news came as Silver Lake launched a delisting offer for Software AG to buy the roughly 7 percent of the company it doesn’t yet own. The offer of €32 per share, in line with the earlier stages, gives a total market cap of about €2.4 billion.

Silver Lake won a race for the German software provider between it and Bain Capital portfolio company Rocket Software in June when the latter agreed to sell its stake to the private equity firm.

Double digits

The global roll-out of software products, geographical expansion and M&A are among the plans that will drive Sofico’s growth in the coming years, Lionel de Posson, managing partner, and Charles-Hubert Le Baron, partner, at private equity firm Astorg, told PE Hub Europe’s Irien Joseph. “We are aiming for continued double-digit growth in revenue in Sofico,” said de Posson.

Astorg agreed to acquire a 51 percent stake in Sofico, a European software products and service provider to the automotive leasing and mobility industry, in late November.

The global roll-out of software services to existing customers will be key to growth, said Le Baron.

Sofico recently won several contracts, notably in Europe, with companies such as Volkswagen, Daimler and Renault, he said. This means that the “solution is going to be rolled out across multiple countries, fuelling the growth over the next five years”.

Sofico is expected to generate more than €80 million in revenues in 2023, according to a release. The company has grown at around 15 percent per year over the last 15 years, and its growth rate has been above 20 percent in the last three years, Le Baron said.

Read more about Astorg’s plans for Sofico here.

Exits

Eurazeo is in exclusive discussions to sell DORC to Carl Zeiss Meditec for an enterprise value of approximately €1bn.

The sale would see Eurazeo yield over 2.6x cash-on-cash and 24 percent gross IRR on its original investment, including proceeds of a refinancing in 2021. The private equity firm bought the ophthalmic surgery platform in 2019 via its mid-large buyout team.

After closing, around €385 million of gross proceeds will go back to Eurazeo.

Teaming up

Tikehau Capital and Nikko Asset Management are in “advanced discussion” to create a business and capital alliance, the companies said this morning.

It would involve the firm’s entering distribution agreements in Japan and elsewhere in Asia, and also creating a joint venture focused on Asian private markets investment strategies.

Nikko would take an equity stake in Tikehau under the proposal.

This of course reminds me of the deal between EQT and Baring Private Equity Asia last year to create BPEA EQT. You can learn more behind the thinking in these mergers in our interview with EQT CEO Christian Sinding at the time.