Buyout duo to sell Dutch payroll firm Raet: sources

LONDON Mon Feb 14, 2011 7:58am EST

LONDON (Reuters) - The private equity owners of Raet, the biggest Dutch provider of payroll and human resources software, are planning a 400 million euro-plus ($542 million) sale, people familiar with the matter said.

Raet's owners, Dutch buyout firm Taros Capital and global private equity firm Advent International, have interviewed banks recently in preparation for a sale, the people said on Monday. An auction could begin as soon as April, one said.

The firm could be worth about 400 million euros, or roughly 8 times earnings before interest, tax, depreciation and amortization (EBITDA), two of the people said -- although any buyer would have to overcome concerns about the growth profile of a company that already enjoys 35 percent market share.

Advent and Raet referred requests for comment to Taros. A Taros official declined to comment.

Private equity has struck a series of sizeable deals involving payroll services, including Thomas H. Lee Partners's THL.UL $5.3 billion purchase of Ceridian in 2007 and Kohlberg Kravis Roberts and Co LP's KKR.UL $1.2 billion takeover of Britain's Northgate Information Solutions the following year.

U.S.-based Ceridian, Northgate and listed U.S. rival Automatic Data Processing (ADP.O), the world's largest payroll processing company, could be among bidders for Raet, the people said. So too could rival private equity firms such as HgCapital.

Taros was spun out of AlpInvest, Europe's largest investor in private equity firms, five years ago.

Taros's predecessor led a 315 million euro deal to buy Raet in 2003 from Getronics, the information technology firm that is now a unit of telephone company Koninklijke KPN NV (KPN.AS).

Last month, Raet expanded by buying Quinto Groep BV, a smaller Dutch rival.

(Reporting by Quentin Webb and Simon Meads; editing by Douwe Miedema and Jane Merriman)

($1 = 0.7381 euro)

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