SoftwareOne shuts down £2.5bn takeover offer from Bain Capital

The cloud solutions provider has refused the £2.5bn deal as it believes the offer does not the company’s actual value

Cloud solution provider SoftwareOne confirmed it has received and rejected an acquisition offer from private equity firm Bain Capital, stating "the proposal materially undervalues the company and is not sufficiently substantiated."

Bain offered to buy 100 per cent of the company for £2.5bn, at CHF 18.50 (£16) per share, subject to various conditions.

When the news broke on Wednesday 14 June, SoftwareOne's share price immediately jumped from about 15.00 CHF (£13.6), to 18.23 CHF (£16), and is currently hovering around 18.00 CHF, or £15.79.

SoftwareOne explained in a public announcement that the board unanimously voted to appoint Brian Duffy as CEO earlier this year, alongside electing Adam Warby as chairman, to transition the company into a new phase of growth and operational excellence and drive future value creation.

"The board is confident in the progress made to date and is convinced this further underpins the board's view that the offer significantly undervalues the current and future valuation of the company," SoftwareOne said in a statement.

The Swiss group started off 2023 with strong results, reporting an 8.7 per cent revenue increase to CHF 239.4m (£213.3m) in Q1 driven by growth across main business lines.

Private equity takeovers are a growing trend in the channel.

Most recently San Francisco-based, WAN and unified observability technology developer Riverbed, that announced it was being acquired at the beginning of June by Vector Capital.

"The delisting ambition is not at all surprising as SoftwareOne has always traded at a much lower EV/NTM EBITDA multiple than others in their cohort such as Bytes, Softcat and Softchoice," QBS Software CEO Dave Stevinson told CRN.

"My feeling is that the main shareholders - feel that a 'take private' move with Bain Capital will deliver both the liquidity and enhanced valuation as SoftwareOne has been an undervalued asset in the capital markets for too long.

"The level of interest in software-focused channel partners from private equity is very high and this deal might make sense - although I strongly agree with the management of SoftwareOne that the initial offer is less than the company is actually worth.

"My feeling is that Bain Capital will come back with an improved offer that a company of this calibre merits."