SoftwareOne Holdings AG, a Swiss provider of business software and related professional services, has rejected a $3.5 billion acquisition offer from Bain Capital.

The company announced the decision today. Its board unanimously determined that Bain Capital’s offer “neither provides sufficient certainty nor adequately reflects the fundamental value of SoftwareOne.” The company’s shares dropped more than 8% on the news.

SoftwareOne posted sales of 233.4 million Swiss francs last quarter, 8.4% more than the same time a year earlier. The company generated most of its revenue, 121 million Swiss francs, from its Software & Cloud Marketplace business. This business operates a cloud platform through which enterprises can find technology products, buy them and manage their spending.

SoftwareOne provides the platform alongside a set of complementary professional services. The company advises enterprises on what types of technology products they should buy and from which suppliers. Additionally, SoftwareOne can negotiate the terms of a technology purchase on an organization’s behalf to help it secure a lower price.

The company’s other major source of revenue is its Software & Cloud Services business. The unit provides a wide range of professional services spanning areas such as artificial intelligence, data analytics and cloud application development. SoftwareOne built up its capabilities in those segments partly through a series of acquisitions made over the past few years.

Last May, Bain Capital submitted a $3.2 billion bid for the company. SoftwareOne’s board launched a strategic review a few weeks later to evaluate the possibility of a sale. In the subsequent months, the company reportedly received takeover interest from several additional would-be acquirers including private equity firm Apax Partners.

By December, Bain Capital was the sole remaining bidder. The investment firm revised its original $3.2 billion offer at least twice following fluctuations in SoftwareOne’s stock price. Bain Capital first raised the bid to $3.7 billion last July, then lowered the price to $3.5 billion after SoftwareOne scaled back its revenue growth guidance for its 2023 fiscal year.

That the latest $3.5 billion bid was rejected today is not entirely unexpected. Earlier this month, Bloomberg reported that the offer had received a “lukewarm response” from SoftwareOne’s board. The company reportedly indicated to Bain Capital that the bid is too low to win its directors’ support.

In conjunction with the announcement of the takeover offer’s rejection, SoftwareOne today reaffirmed its guidance for its 2023 fiscal year. The company is projecting high single-digit revenue growth and an adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, margin of 24% to 25%.

SoftwareOne is reportedly not the only major tech firm that has received takeover interest from Bain in recent months. Last Thursday, sources told Reuters that the investment firm is participating in a bidding contest for DocuSign Inc., which has a market capitalization of about $13 billion. DocuSign provides a popular electronic signature service of the same name and also provides applications for related tasks such as contract template management. 

Image: SoftwareOne