Software AG Explores Sale of $3 Billion Tech Company

(Bloomberg) -- Software AG is exploring strategic options, including a potential sale, in one of the busiest-ever years of dealmaking for Germany’s listed companies, according to people familiar with the matter. 

The Darmstadt, Germany-based software company is working with advisers to gauge interest from potential buyers, including private equity firms, the people said. 

Software’s shares rose as much as 9.5% on Friday. They were trading up 7.8% at 9:32 a.m. in Frankfurt, giving the company a market value of 2.7 billion euros ($3 billion).

Deliberations are in the early stages and there’s no certainty that it will decide to sell, the people said, asking not to be identified discussing confidential information.

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

A representative for Software declined to comment.

Germany has proved to be one Europe’s hottest regions for private equity dealmaking amid 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, Bloomberg data show. 

High-profile takeovers of public German companies this year include EQT AB and Hellman & Friedman’s joint purchase of online pet supplies group Zooplus AG, Brookfield Asset Management Inc.’s acquisition of real estate firm Alstria Office REIT-AG, and Carlyle Group Inc.’s bid to take rail infrastructure tech provider Schaltbau Holding AG private.

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

Such business have proved to be popular with private equity firms, which are drawn to the stable revenue streams their subscription models can generate. 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 now also reviewing a potential rival bid from SS&C Technologies Holdings Inc.

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