American private equity can't wait to gobble up Euro stalwart Software AG

Silver Lake set to grab control of firm with legacy from Moon landing era

Private equity investor Silver Lake has tabled a bid to take over Software AG, a longstanding stalwart of the European software industry, for an implied value of around €2.2 billion.

Founded in 1969, Software AG made inroads in the global software markets building database management systems and integration software for mainframes. The company then branched out into modern software management and integration through the decades with a series of acquisitions.

It was launched and is still based in Germany and trades on the Frankfurt Stock Exchange. Notable customers include leading UK retailer Tesco, European aerospace manufacturer Airbus, the United States Army, Australia Post, and German industrial giant Siemens.

SoftwareAG's management board and the takeover committee said they support the takeover, and are likely to recommend it to shareholders subject to a “careful review” of the details.

In a pre-canned statement Sanjay Brahmawar, Software AG CEO, said: “Silver Lake has already demonstrated strong support for our strategic vision and values. With deep expertise in the integration market, experience in transitioning businesses to SaaS-first models and extensive M&A capabilities, Silver Lake is a valuable long term partner for Software AG and our customers.” CFO Daniela Bünger said the €30 per share offer represented “an attractive premium for our shareholders.”

Silver Lake is a $92 billion private equity firm involved with deals spanning the software industry. It recently bought out user experience and survey platform Qualtrics from enterprise application company SAP for $12.5 billion. It was also involved with Skype before the online calls pioneer was sold to Microsoft.

Software AG was founded by six German consultants in 1969, and in its early days mathematician Peter Schnell, a co-founder, developed a transactional database management system called ADABAS (which runs on the UK's Police National Computer, among other things), launched for mainframes in 1971.

It floated on Frankfurt Stock Exchange in 1999, and in 2007, bought WebMethods, a popular application and process integration platform, at a value of $546 million.

In May 2020, webMethods.io was offered to customers as an Integration Platform-as-a-Service (iPaaS) on Microsoft's Azure cloud environment. Later that year, SoftwareAG launched AppMesh, an API-integration layer designed to help companies organise and manage APIs along the lines of business semantics, the transactions they're used for, rather than their technical characteristics. ®