PI Global Investments

Silver Lake-backed Cegid to combine with Grupo Primavera in €6.8bn deal

France-based software group Cegid is acquiring Spanish rival Grupo Primavera in a €6.8bn deal that combines two private-equity backed companies that have each been formed through acquisition sprees.

The all-share deal is the latest example of how some of private equity’s most prominent firms are tapping European markets for software companies and rolling up smaller-sized companies, with the aim of creating regional champions with the scale to compete globally.

Cegid, which is backed by Silver Lake, KKR and AltaOne Capital, has grown by snapping up rivals since its investors took the business private in 2017. London-based Oakley Capital owns Grupo Primavera, which has customers in Spain, Portugal and Brazil, and has led a dozen acquisitions over the past three years.

Oakley, a buyout group specialising in midsize companies, will receive shares in the new business worth about €500mn, according to a person familiar with the situation, owning a stake of less than 10 per cent.

Silver Lake, one of the largest technology investors in the US, will own almost two-thirds of the combined company, while minority shareholders KKR and AltaOne Capital will own stakes of less than 10 per cent.

Silver Lake declined to comment.

The combined company will sell specialised software to digitise the finance, human resources and retail operations of small and medium-sized businesses and cater to customers in Spanish, French and Portuguese.

Silver Lake’s approach to European software takeovers is to combine smaller companies better able to compete with larger US rivals, according to people familiar with the strategy.

The group led the €580mn takeover of Cegid in 2016 alongside private equity AltaOne Capital, privatising the once Paris-listed software company created by Jean-Michel Aulas, owner of the Olympique Lyonnais football club.

KKR agreed to buy a minority stake in Cegid at a €5.5bn valuation in June 2021, two days after Silver Lake agreed to buy a minority stake in the KKR-owned Dutch software company Exact.

Since the privatisation, Cegid has struck four large acquisitions, more than doubling turnover to €632mn in 2021.

Oakley formed Grupo Primavera by combining Portugal’s Primavera with Spain’s Ekon in 2021. It bought Ekon in 2019, carving it out of Unit4, which was backed by the private equity group Advent International.

Under managing partner Peter Dubens, Oakley struck a dozen acquisitions, consolidating software companies across Iberia.

Pascal Houillon, chief executive of Cegid, will run the combined company. Santiago Solanas, head of Grupo Primavera, will report to Houillon.

“The market for digitisation solutions in the European mid-market, namely through financial management software, is large and growing meaningfully,” said Christian Lucas, co-head of Silver Lake’s private equity business in Europe.

The merger would reinforce “Cegid’s existing position on a broader global scale”, he added.

In 2020, Lucas led Silver Lake’s acquisition of French payroll software provider Silae at a more than €500mn valuation, people with knowledge of the matter said. A month later, Silver Lake struck a deal to acquire French financial services broker Meilleurtaux for €700mn.

Late last year, Silver Lake led a €344mn private placement into Software AG, a Frankfurt-listed group that is one of the pioneers of the European software industry. Amid the flurry of deals, Silver Lake and Oakley Capital are also crossing paths. Last month, Silver Lake acquired Facile.it, an Italian online price comparison platform majority owned by Oakley and Stockholm-based buyout firm EQT.

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