ADVERTISEMENT

Investing

Warburg Said to Weigh Buyout of German IT Firm Nagarro

Servers and data banks at the new Sberbank data processing center at Skolkovo innovation center in Skolkovo near Moscow, Russia, December 26, 2017. (Andrey Rudakov/Bloomberg)

(Bloomberg) -- Warburg Pincus is weighing a possible buyout of German IT services company Nagarro SE, people familiar with the matter said, potentially adding to the strong momentum of dealmaking in the country.

The US-based firm is working with advisers on a proposal to take Nagarro private, according to the people, asking not to be identified discussing confidential information. Deliberations are ongoing and Warburg could decide against making an offer, the people said. Other buyout firms have also previously looked at Nagarro, they said.

Nagarro is in talks with certain interested parties regarding a potential take-private including a public tender offer, the company said in a statement on Wednesday, without identifying the potential suitors. A representative for Warburg declined to comment.

Shares of Nagarro surged as much as 22% following the Bloomberg News report and the company’s statement. The Munich-based firm has a market value of €1.3 billion ($1.4 billion). The stock plunged on Tuesday after the company cut its revenue guidance.

Nagarro was spun off from consultancy and service company Allgeier SE late 2020. The company provides digital engineering services for industries including automotive, banking and financial services, energy and utilities, gaming and entertainment, its website shows. The firm has roughly 18,300 employees in 37 countries.

Warburg has invested more than $14 billion in over 125 companies across Europe. In 2024, it’s invested in UK insurance company Specialist Risk Group and exited investments including Aion Bank and Vodeno to UniCredit SpA.

Germany has seen a flurry of big-ticket acquisitions recently that have taken deal volumes to more than $100 billion this year. State-owned Adnoc this month said it’s buying chemical producer Covestro AG for €11.7 billion in the largest-ever Middle Eastern acquisition in Germany. Meanwhile, buyout firm TPG Inc. clinched a €6.7 billion deal for metering company Techem GmbH.

--With assistance from Dinesh Nair and Kiel Porter.

(Updates with Nagarro’s exchange filing in third paragraph.)

©2024 Bloomberg L.P.