SoftwareOne confirms that it is in talks to acquire Crayon Group. This is a potential deal that would significantly expand the reach of both software companies in Europe.
Although talks are at an advanced stage, there is no guarantee they will lead to a transaction. SoftwareOne explains that, according to a Bloomberg report.
Switzerland-based SoftwareOne, based in Stans, has been exploring strategic acquisition opportunities for more than a year. The company was previously in talks to sell itself and go public. But a 2.98 billion Swiss franc bid by Bain Capital ran aground in January. The then board of directors rejected it.
This led to dissatisfaction among the founding shareholders. The latter therefore replaced the leadership. Since then, the company has been in talks with several parties, including private equity firm Apax Partners. The latter is considering merging SoftwareOne and Crayon. And then delisting the whole company.
Crayon Group Holding, based in Oslo, Norway, operates mainly in Scandinavia and distributes licenses for Amazon Web Services, Microsoft Corp. and Google Cloud, among others. SoftwareOne, one of the largest resellers of Microsoft licenses, has annual sales of about 1 billion Swiss francs. This while Crayon is expected to achieve sales of 7.2 billion Norwegian kroner ($648 million) this year.
Crayon off the stock market?
According to insiders, SoftwareOne is preparing to delist Crayon and announce a combination of the two companies. This could possibly be announced this month.
SoftwareOne plans to pay primarily or entirely in shares. Crayon shares rose 8.4% in Oslo, reaching the highest level since August 2022, valuing the company at about $1.1 billion. At the same time, SoftwareOne’s shares fell 17% in Zurich, bringing its market value down to 970 million Swiss francs ($1.1 billion).
Stronger market position
The merged company would strengthen the position of both players in Europe and could eventually possibly be delisted by a private equity firm. In October, however, Raphael Erb, SoftwareOne’s new CEO, warned of challenges from changes at Microsoft, including a reduction in certain vendor incentives.
Although talks are at an advanced stage, the possibility remains that they could be delayed or not proceed.