EQT Explored Sale of Software Developer SUSE After Takeover Interest

27 Apr 2022, 10:50 AM IST

(Bloomberg) -- Private equity firm EQT AB recently explored a sale of SUSE SA after receiving takeover interest in the listed German enterprise software developer, people familiar with the matter said.

EQT entered advanced negotiations with tech-focused buyout firm Thoma Bravo after fielding inbound approaches from a number of potential buyers, said the people, who asked not to be identified because the information is private. Thoma Bravo, which pre-empted other bidders, couldn’t reach an agreement on the terms of a transaction and EQT has decided to keep its SUSE stake for now, according to the people.

Shares of SUSE have fallen 29% this year, giving the company a market value of about 4.8 billion euros ($5.1 billion). EQT owns a 76% stake in SUSE, which listed in Germany in May 2021, according to data compiled by Bloomberg.

Cash-rich investment funds have been eyeing high-growth tech plays that have fallen out of favor with stock investors. Thoma Bravo has been scouting for deals in Europe, where it was among suitors evaluating Germany’s Software AG in recent months.

The private equity firm and EQT were also exploring separate bids for Swiss banking software specialist Temenos AG, Bloomberg News has reported. Thoma Bravo has been sealing major purchases in the U.S., agreeing in March to acquire U.S. enterprise software company Anaplan Inc. in a deal valued at $10.7 billion.

Representatives for EQT, Thoma Bravo and SUSE declined to comment.

SUSE, founded in 1992, built a version of the Linux operating system that large companies use to run their servers. It also sells tools for automating cloud software deployment and hosting SAP SE applications. SUSE has over 2,000 employees and counts more than 60% of the Fortune 500 as customers, according to its website.

EQT has been expanding SUSE through acquisitions since first investing in 2019. The company agreed in 2020 to buy Rancher Labs Inc. to gain tools used for managing cloud infrastructure. In October, SUSE reached a deal to buy NeuVector Inc., a container security firm serving financial services and government clients.