EXCLUSIVE Buyout funds circle Germany's Transporeon ahead of $1.1 billion sale

LONDON, Feb 11 (Reuters) - Buyout funds, including KKR (KKR.N), Hellman & Friedman and Blackstone (BX.N), have expressed interest in German transport logistics software company Transporeon as private equity owner Hg reviews options to cash out, four sources familiar with the situation told Reuters.

Hg, which bought Transporeon in 2019 from rival buyout fund TPG, wants to capitalise on the boom in e-commerce demand during the pandemic where retailers have come to rely increasingly on freight software to handle record volumes of online orders, the sources said.

Transporeon specialises in cloud-based logistics technology and could be valued at about 1 billion euros ($1.14 billion) by prospective buyers, the sources said.

European private equity funds, including Permira, Cinven and Astorg are likely to take part in an auction process, one of the sources said.

Hg has yet to hire advisers and no final decision has been taken on selling the business, the sources said.

Hg, KKR, Hellman & Friedman, Blackstone, Permira and Cinven declined to comment. Astorg did not return requests for comment.

Germany has the largest logistics market in Europe - greater than France and Britain combined, with the industry in Germany expected to grow at a compound annual growth rate (CAGR) of more than 2% up to 2025, based on a MarketResearch.com study.

The country - which also ranks as the world's third largest exporter and importer of goods, based on data from Germany Trade & Invest (GTAI) - has seen a proliferation of freight software providers with investors vying to plough cash into local start-ups.

Last year, Softbank (9984.T) led a $240 million funding round for German freight technology startup Forto, valuing the business at $1.2 billion. read more

Berlin-based digital freight forwarder Sennder was valued at more than $1 billion in 2021 during a $240 million late-stage fundraising organised in two tranches worth $160 million and $80 million each, with Edinburgh-based investment management firm Baillie Gifford leading the second closing. read more

Transporeon generates around 120 million euros ($136.86 million) in sales and could be valued at roughly 1 billion euros, representing a multiple of around 20 times its core earnings of 35 million euros, two of the sources said.

The company, led by Chief Executive Stephan Sieber, expects its 2021 revenues to increase well beyond 12.7% which was the growth rate disclosed in public filings in 2020.

Under Hg's ownership, Transporeon has made a series of add-on acquisitions including the purchases of ControlPay, Sixfold and TNX Logistics.

Transporeon could favour a transaction with a U.S. buyout fund to help to drive growth in the United States, where it faces competition from supply chain management firm HighJump Software, one source said.

Transporeon has more than 1,000 employees and around 120,000 connected carriers, its website says.

($1 = 0.8778 euros)

Reporting by Emma-Victoria Farr and Pamela Barbaglia, editing by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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Reports on European M&A with previous experience at Mergermarket, Bloomberg The Daily Telegraph and Deutsche Presse Agentur.