UPDATED 14:07 EST / JUNE 30 2023


Silver Lake to take Software AG private after acquiring 63%+ stake

Silver Lake plans to take Software AG private after acquiring a more than 63% stake in the Germany-based business software maker.

The private equity firm disclosed its majority stake on Thursday. Additionally, Silver Lake detailed that it has bought a significant number of convertible Software AG notes. Those notes can be turned into stock corresponding to 10% of the company’s share capital. 

Founded in 1969, Software AG offers a large portfolio of software products used by more than 10,000 organizations worldwide. Most of its products focus on helping enterprises manage and analyze their business data.

One of Software AG’s flagship offerings is webMethods, a platform that can integrate a company’s applications with another to let them exchange data. A retailer, for example, could create an integration that streams new transaction logs from a sales database to a revenue forecasting application.

Software AG also sells a tool called StreamSets that companies can use to move information into analytics environments such as cloud-based data warehouses. The company obtained the tool after buying a startup of the same name last February. It competes in several other parts of the software market as well, including the connected device management and robotic process automation segments.

In April, Silver Lake announced plans to buy the company for €30 per share or €2.2 billion. It increased its offer to €32 per share in May and launched a tender offer to buy Software AG stock from existing investors. The same month, Silver Lake disclosed it had amassed a 30.1% stake in the company. 

Following Silver Lake’s takeover bid, Rocket Software submitted a competing offer for Software AG. Massachusetts-based Rocket Software develops mainframe applications that help enterprises manage their business data, automate repetitive business chores and perform other tasks. It’s owned by Bain Capital, a private equity firm that similarly to Silver Lake makes investments in the enterprise technology market.

Rocket Software offered €36 per Software AG share, more than the €32 proposed by Silver Lake. Nevertheless, the Software AG board and leadership team threw its support behind the latter firm’s offer in May. The following month, Bain Capital and Rocket Software sold their Software AG shares to Silver Lake.

That deal helped increase Silver Lake’s stake in the company from 30.1% to about 41%. Now that it has a more than 63% stake, the private equity firm hopes to buy additional shares by launching an extension of the tender offer it launched in May. The extension will enable existing investors to sell their shares through July 17.

Silver Lake said that it plans to take Software AG private “as soon as practically possible” after the tender offer closes.

Image: Software AG


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