Private-equity firm Silver Lake has made a bold move in acquiring German business software developer Software AG. The deal is reported to be worth €2.2 billion ($2.42 billion). The offer from Silver Lake represents a premium of 53 percent to the XETRA closing price of Software AG shares on April 20, 2023.
Furthermore, it also includes a substantial premium of 48 percent to the three-month volume-weighted average share price. The acquisition is subject to an acceptance threshold of 50 percent plus one share and other customary conditions, including regulatory clearances.
A history of working together
The Software AG Foundation, Software AG’s largest investor, has supported the offer from Silver Lake. In addition, the Foundation has signed a share purchase agreement to sell 25.1 percent of all shares. As per an official statement, “The Software AG Foundation will continue to own 5 percent of shares. The retained 5 percent of shares are subject to a lock-up.”
In the past, Silver Lake has been a staunch supporter of Software AG, with an investment of €344 million to drive Software AG’s Helix transformation. This move resulted in Silver Lake representatives Christian Lucas and James Whitehurst joining Software AG’s Supervisory Board.
Opportunities to expand
Sanjay Brahmawar, CEO of Software AG, expressed his delight at the proposed acquisition. He states, “A successful transaction would enable us to accelerate the execution of our strategy, double down on innovation in integration for customers, and provide more excellent opportunities to attract and develop talent.”
He thanked the Foundation and Dr. Schnell for the many years of support in helping bring Software AG to the levels it has reached.
The acquisition of Software AG by Silver Lake would significantly boost the software company’s growth prospects. The deal would also allow Silver Lake to expand its portfolio and continue investing in promising technology companies.
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