EXCLUSIVE-Dutch software firm Exact in $1.2 bln buyout talks

Fri Jul 11, 2014 10:12am EDT

(Adds company, analyst comment, share price)

By Pamela Barbaglia and Freya Berry

LONDON, July 11 (Reuters) - Dutch software firm Exact Holding said it had been approached by parties about a possible takeover, after Reuters reported that private equity funds including Apax and KKR were eyeing a buyout of the firm.

Exact said on Friday it had received interest in a possible buyout of all outstanding shares, at indicative prices of 30-35 euros per share. A price of 35 euros would value the firm at 854 million euros ($1.2 billion).

Two sources said Rothschild has been mandated to sell the company, which is listed on Euronext Amsterdam with a market capitalisation of 617 million euros.

"Exact is engaged in preliminary discussions," the company said in a statement, adding that there was no certainty of an offer being made.

"The Managing Board and the Supervisory Board of Exact will be carefully evaluating these expressions of interest and will take the interests of all stakeholders, including the shareholders, into full consideration in their decision making."

Exact's shares were up 26 percent at 31.8 euros a share at 1331 GMT. At one point, shares hit a high of 36 euros, their highest level since 2001 and on track for their biggest-ever daily gain since the firm's listing in 1999.

"Private equity interest around Exact has been mounting since UNIT4 was snapped up by Advent," said a source, who declined to be named because the talks are private.

Apax, which was previously bidding for software firm UNIT4, has now directed its attention towards Exact. The list of bidders also includes global investment firm KKR, while EQT and Hellman & Friedman initially explored a potential acquisition but are no longer in the process, the sources said.

"Especially after the takeover of UNIT4, we believed Exact could be next, because it has net cash, lots of recurring revenues and there's a very fast-growing cloud software business which is now being internationalised," said Hans Slob, analyst at Rabobank.

"Everything above 30 is a good price," he added.

PRIVATISATION DEAL

Public-to-private or P2P deals have been scarce in recent years as record highs in stock markets have pushed up prices for public assets.

A deal would mark the second take-private transaction among technology stocks listed on Euronext since Advent International offered 1.2 billion euros to acquire UNIT4, a multiple of around 12 times the firm's 2013 core earnings (EBITDA) of 97.6 million euros. The deal closed in March this year.

Media reports said in 2008 that Exact, which provides IT and software solutions to small and medium-sized businesses, was in take-private talks with several private equity firms including Hg Capital, Hellman & Friedman and Providence.

The company, which is moving to a cloud-based business model from a licensing software-based model, could command multiples of at least 12 times its core earnings (EBITDA) and a premium of around 30-40 percent, one of the sources said, potentially valuing the firm at around one billion euros.

Exact generated 47.4 million euros of core earnings in 2013, on revenue of 213.2 million euros. In the fourth quarter of 2013 revenue from cloud solutions increased 42.4 percent to 5.8 million euros compared to the same period last year.

Exact Holding, KKR, Apax, Hellman & Friedman and EQT were not immediately available to comment. Rothschild declined to comment.

($1 = 0.7331 euros) (Additional reporting by Clare Hutchison, and Thomas Escritt in Amsterdam; Editing by Elaine Hardcastle and David Evans)

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