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Hg Mulls Stake Sale in Septeo, Valuing the French Software Firm at €4 Billion
Private equity firm Hg is exploring various options for French software company Septeo, including a potential sale of a minority stake, which could value the enterprise at up to €4 billion ($4.3 billion). According to sources privy to the discussions, Hg has initiated conversations with possible advisers ahead of evaluating interest from potential investors. While these sources prefer to remain anonymous due to the confidentiality of the information, they suggest that Septeo may attract bids from other private equity funds and expect a formal sale process to potentially start later this year.
However, it's important to note that these deliberations are still in the early stages, and Hg might ultimately decide not to proceed with any deal. A representative for Hg declined to comment on the matter. Septeo, headquartered in Montpellier, France, specializes in legal software designed for use by law firms and human resources departments. The company boasts a workforce of over 3,000 employees spread across France, Spain, Belgium, Switzerland, Tunisia, and North America. Hg became an investor in Septeo in 2020.
This consideration of exits comes amidst an environment where buyout funds are increasingly looking to divest their portfolio companies as dealmaking conditions show signs of improvement following a prolonged slump. Adding pressure is the heightened demand from investors who are eager for returns on their capital. In a similar vein, TA Associates is reportedly aiming to sell French software enterprise Orisha, with indicative bids expected in the near future. Moreover, Aareal Bank AG along with its majority owner Advent International recently agreed to dispose of the bank’s software unit, valuing the transaction at an enterprise value of €3.9 billion.
The potential sale of a minority stake in Septeo underscores a broader trend in the industry, reflecting both the improving market conditions for deals and the necessity for private equity firms to satisfy investor expectations concerning capital returns.
