Software AG Partners with Silver Lake to Further Accelerate Growth

Software AG is forming a strategic partnership with Silver Lake, a leading technology investment company, which is anchored by Silver Lake’s €344 million investment in Software AG.

After three years of successful transformation and leveraging Silver Lake’s unique expertise, moving forward, Software AG will look to accelerate growth, bolstered by its cloud-native product portfolio, strengthening and expanding its North American position, and implementing a value-creating M&A program strategy.

By leveraging Silver Lake’s deep knowledge, relationships and industry experience, Software AG believes it can access more than its €61 billion total addressable market (TAM), which is expected to grow at a compound annual growth rate (CAGR). by 16 percent between 2020 and 2026.

Software AG intends to double its key areas of its current strategy, which are enabled by its fully cloud-native business digital product suite and increasingly updated go-to-market and customer success drivers.

This activity will be supported by mergers and acquisitions to access new market segments within Software AG’s TAM, adding complementary technology and market entry capabilities and expanding cross-selling opportunities. It will also invest more in talent and develop Software AG’s culture to ensure its long-term sustainable growth.

“With Silver Lake as our partner, we welcome a leading global technology investor with a proven track record of creating value in software companies while driving growth,” said Sanjay Brahmawar, CEO, Software AG. “Combining Silver Lake’s experience and network with Helix’s transformation will help us further capitalize on our rapidly expanding market opportunities. Silver Lake’s investment represents a strong support for our strategy, team, and potential for future growth.”

Karl-Heinz Strebic, Chair of the Supervisory Board of Software AG, and Ralf Dieter, Chair of the Audit Committee, will effectively step down from January 31, 2022.

Christian Lucas, managing director at Silver Lake and co-chair of the company’s activities in Europe, and Jim Whitehurst, former CEO of Red Hat, will join the supervisory board as soon as possible thereafter. Based on discussions between Silver Lake, Software AG and current Supervisory Board members, Christian Lucas is expected to be elected Chairman of the Supervisory Board.

Under the terms of the agreement, Silver Lake will purchase €344 million in the total principal amount of a 2% convertible unsecured subordinated note due in early 2027 at an initial conversion price of €46.54 per share.

The conversion price represents a 20% conversion premium over the closing price of the company’s common stock selling price of €38.78 per share on the Frankfurt Stock Exchange as of December 10, 2021. Software AG intends to use the proceeds of the transaction to invest in growth, support the merger and acquisition program, and enable the stage The following is from Helix.

“We are delighted to invest in a leading German company. Software AG is a fantastic company, and we have been impressed by Helix’s transformation over the past three years, with Sanjay and his talented leadership team laying the foundation for growth by transforming the product portfolio, reigniting culture and transforming business into subscription,” said Christian. Lucas, Managing Director of Silver Lake and Co-Head of the company’s activities in Europe “SaaS.” “This success from Helix’s phase one makes us very excited to partner with Sanjay and his team as Software AG accelerates its growth journey. We look forward to contributing to the company’s future success.”

JPMorgan acted as a financial advisor to Software AG on the deal. Clifford Chance LLP has served as legal counsel for Software AG. Skadden, Arps, Slate, Meagher and Flom LLP have served as legal counsel for Silver Lake.

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