Software AG mulls sale, market value of $3 billion

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Software AG mulls sale, market value of $3 billion

In one of the busiest years of dealmaking for Germany's listed companies, Software AG is exploring strategic options, including a potential sale, according to people familiar with the matter.

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The people said that the software company, which has a market value of 2.6 billion euros $3 billion, is working with advisers to gauge interest from potential buyers, including private equity firms.

There is no certainty that it will decide to sell, the people said, asking not to be identified talking about confidential information.

Any deal would require the support of the Software AG Foundation, which holds more than 30% of the company. The charitable foundation was created in the 1990s by founder Peter Schnell.

Germany is one of the hottest regions of Europe for private equity dealmaking due to the global boom in mergers and acquisitions. Private equity firms have spent more than $100 billion on deals involving a German company since the start of 2019 and hit a value record last year, according to Bloomberg data.

The acquisition of German public companies this year includes EQT AB and Hellman Friedman's joint purchase of online pet supplies company Zooplus AG, Brookfield Asset Management Inc., and Carlyle Group Inc.'s bid to take rail infrastructure tech provider Schaltbau Holding AG private.

Software is an enterprise software developer that serves more than 10,000 businesses, founded in 1969. According to its website, its customers include 50% of Fortune 500 companies. The company had revenue of 599 million euros in the first nine months of the year, which was flat on the same period in 2020, accounts for the period show.

Private equity firms are drawn to the stable revenue streams that their subscription models can generate, and have proved to be popular with such business. In September, U.K. software group Blue Prism Group Plc recommended a 1.1 billion-pound $1.5 billion takeover from Vista Equity Partners and is reviewing a potential rival bid from SS&C Technologies Holdings Inc.

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