Exclusive: Hellman & Friedman weighs options for Italy's TeamSystem -sources

FRANKFURT, Jan 18 (Reuters) - Hellman & Friedman (H&F) is weighing options for its Italian cloud software maker TeamSystem, a business which could be valued at several billion euros, two people familiar with the matter told Reuters.

Evercore is advising California-based financial investor H&F on a possible transaction and in recent weeks has been sounding out potential investors for a minority stake, the sources said.

Private equity investors are showing interest in TeamSystem, which may also attract sovereign wealth funds, they said. Hellman & Friedman is likely to begin a formal sales process next month, they added.

Hellman & Friedman acquired TeamSystem in 2016 and in 2021 moved the company from one of its funds to another. TeamSystem's management reinvested in the company as part of the 2021 transaction, and private-equity firm Hg held a minority stake.

Hellman & Friedman declined to comment. Hg, Evercore and TeamSystem did not immediately return requests for comment.

TeamSystem, which was founded in 1979, generated revenue of 545 million euros in 2021, while posting adjusted core earnings of around 235 million euros, according to company results on its website. The business provides accounting, payroll, and business management software for small and medium-sized enterprises.

Enterprise resource planning (ERP) software providers benefitted during the pandemic when businesses were forced to bolster their technology, while Italy's electronic invoice legislation also spurred TeamSystem's revenue growth.

Based on a valuation similar to A2Mac1, which Providence Equity Partners acquired last year, TeamSystem could be worth more than 20 times its expected core earnings of 300 million euros for 2023, one of the people said. While a decision on its valuation is still in flux, that could mean more than 6 billion euros including debt, the person said.

Wider peers including London-listed Sage (SGE.L) and Germany's SAP (SAPG.DE) would be comparable in terms of core earnings multiples in a sale, an industry banker said. Sage is trading at 15.93x EV/EBITDA over the next 12 months, while SAP is trading at 14.27x EV/EBITDA over the same period.

H&F, which manages $85 billion of assets, closed its tenth fund in 2021 with $24.4 billion of committed capital. German car marketplace AutoScout24 and payments firm Nexi are among its other investments in Europe.

A minority sale of TeamSystem would help H&F show investors its track record should it seek to raise a new fund, one of the people said.

($1 = 0.9194 euros)

Reporting by Emma-Victoria Farr in Frankfurt, Amy-Jo Crowley in London, Elisa Anzolin in Milan and Chiara Elisei in London, editing by Elisa Martinuzzi, Kirsten Donovan

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Emma-Victoria reports on mergers and acquisitions across Europe, with previous experience at Mergermarket, Bloomberg, The Daily Telegraph and Deutsche Presse Agentur.