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Software AG can connect with buyout boom


(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON (Reuters Breakingviews) – The software industry is set for a trading boom. German Software AG is considering a sale, Bloomberg reported https://www.bloomberg.com/news/articles/2021-11-25/software-ag-is-said-to-explore-sale-of-3- billion- tech-company? sref = yYqHJdKG Thursday, citing people familiar with the matter. Uneven performance and aging founder Peter Schnell, whose charitable foundation is a major shareholder, could influence the decision. The $ 3 billion enterprise software maker has fallen behind its biggest rival SAP, which trades at 19 times EBITDA according to Refinitiv data. Software AG is valued 13 times.

Fortunately for Schnell, software companies are in high demand by buyers, including private equity groups like KKR, Warburg Pincus https://www.bloomberg.com/news/articles/2021-11-25/software- ag-is-said-to -explore-sale-of-3-billion-tech-company? sref = yYqHJdKG and TPG. British robotics software maker Blue Prism on Thursday accepted a £ 1.2bn offer from buyout firm Vista Equity. Enterprise software is a fragmented business and Schnell’s group could offer its competitors a wider range of products to sell to their customers. Alternatively, Software AG could try to scale up while it is still in public hands. (By Dasha Afanasieva)

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(Edited by Peter Thal Larsen and Karen Kwok)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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