Silver Lake, а technology-focused private equity firm, has agreed to invest 344 million euros ($388 million) in Germany’s Software AG.
What Silver Lake will do is to buy convertible bonds that translate into about 10% of Software AG’s currently issued share capital, the company said in a statement Monday. The transaction will help the company strengthen its current position in North America and pursue acquisitions.
Software AG Chief Executive Officer Sanjay Brahmawar said in an interview the Darmstadt, Germany-based company is fully prepared to accelerate its dealmaking after getting organic growth on track. Brahmawar commented:
“There is no better partner than Silver Lake to do that. It is not about capital actually. This is so much more about the expertise, the network, the support, the relationships.”
Software AG is opting to remain public after exploring strategic options including a potential sale of the company. It attracted interest from a range of private equity firms including Silver Lake, CVC Capital Partners and Thoma Bravo.
In fact, Software AG shares fell as much as 12% on Tuesday. They were down 10% in Frankfurt, giving the company a market value of about 2.6 billion euros.
What is more, Software AG’s sales have been under pressure for almost a decade because of headwinds hampering its legacy database-management product, Adabas & Natural.
Karl-Heinz Streibich, a Supervisory Board Chairman, and fellow director Ralf Dieter have decided to step down as of Jan. 31, according to the statement. Silver Lake Managing Director Christian Lucas will join the board and is expected to be elected chairman, a rare position at a German listed company for a private equity executive.
Silver Lake is one of the few private equity firms dedicated to technology investments, with more than $90 billion of assets under management and committed capital.
Software AG is an enterprise software developer that helps companies manage processes and data. It serves more than 10,000 businesses.