Software AG Announces Partnership with Silver Lake, a Company focused on Technology Investing

Software AG (Frankfurt MDAX®: SOW) has announced that it has entered into a partnership with Silver Lake, a company focused on technology investing, “anchored by a Silver Lake investment of €344 million in Software AG.”

Following several years of transformation and with the benefit of Silver Lake’s expertise, Software AG will look to “accelerate growth, supported by its Cloud-native product set, further strengthening and extending its position in North America, and executing a strategic program of value-creating M&A.”

Sanjay Brahmawar, Software AG CEO, stated:

“With Silver Lake as our partner, we welcome a world-leading technology investor that has a proven track record of creating value in software companies as they drive growth. The combination of Silver Lake’s expertise and network and our Helix transformation will help us further capitalize on our rapidly expanding market opportunity. Silver Lake’s investment represents a strong endorsement of our strategy, our team and our future growth potential.”

Karl-Heinz Streibich, the Chairperson of Software AG’s Supervisory Board, and Ralf Dieter, Chairman of the Audit Committee, have reportedly decided to step down from office “with effect as of January 31, 2022.”

Christian Lucas, MD at Silver Lake and co-head of the company’s activities in Europe, and Jim Whitehurst, former CEO of Red Hat, will be joining the Supervisory Board “as soon as possible thereafter.”

Based on discussions between Silver Lake, Software AG and the current Supervisory Board members, it is “expected that Christian Lucas will be elected as Chairman of the Supervisory Board.”

Sanjay Brahmawar remarked:

“The addition of Christian and Jim will provide our Supervisory Board with valuable insight and expertise as we grow through new partnerships, investments and acquisitions. Christian, Jim and Silver Lake have a history of working closely with management teams to create value by identifying and delivering on unique business opportunities in the software industry. It is a pleasure for me to express my personal thanks to Karl-Heinz Streibich for his significant contribution, both as the CEO of Software AG between 2003 and 2018, and for his great leadership both as Chairman of the Supervisory Board and as a strong supporter of our Helix strategy.”

He added:

“I’d also like to extend my thanks to Ralf Dieter. In his role as a member of the Supervisory Board and Chairman of the Audit Committee he has contributed greatly with his leadership and vast business experience to our success.”

Under the terms of the agreement, Silver Lake is “purchasing €344 million aggregate principal amount of 2 percent convertible subordinated unsecured notes due in early 2027 with an initial conversion price of €46.54 per share.”

The conversion price represents “a conversion premium of 20 percent over the closing price of the company’s common stock sale price of €38.78 per share on the Frankfurt Stock Exchange as of December 10, 2021,” the update noted.

Software AG intends to use the proceeds of the transaction “to invest in growth, support its M&A program, and enable the next phase of Helix.”

Christian Lucas, Silver Lake MD and co-head of the firm’s activities in Europe, said:

“We are thrilled to be investing in one of Germany’s leading companies. Software AG is a great business, and we have been admiring the Helix transformation over the last three years, as Sanjay and his talented leadership team have laid the foundation for growth through transforming the product portfolio, reigniting the culture and shifting the business to subscription and SaaS. This success from the first phase of Helix leaves us extremely 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.”

Dr. Peter Schnell, Founder of the Software AG Foundation, noted:

“We are delighted to welcome Silver Lake to the Software AG family. We look forward to seeing its impact as the Group continues its transformation towards sustainable, profitable growth. We have supported Helix since its inception, and we remain fully committed to the management team’s strategy and vision for Software AG.”

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