(Bloomberg) -- CVC Capital Partners Plc offered to take CompuGroup Medical SE & Co. KGaA private in a deal that values the German software provider at €1.18 billion ($1.2 billion).
CVC has offered €22 a share in cash for the German technology company, which makes software serving the health-care industry, it said in a statement on Monday, confirming an earlier Bloomberg News report. CVC agreed to a strategic partnership with CompuGroup’s majority shareholder around the founding Gotthardt family, who plans to retain its roughly 50.1% interest following the takeover.
Shares of CompuGroup on Monday jumped as much as 34% in Frankfurt, their biggest intraday advance since July 2008. CompuGroup had closed at €16.35 on Friday.
CVC has been ramping up deals after raising €26 billion last year for the world’s biggest-ever buyout fund — a sharp contrast to peers that had to delay fundraising or adjust expectations. The firm deployed €13.4 billion this year through June, it said in its first set of financial results since the initial public offering.
Frank Gotthardt created CompuGroup in 1987 as a computer science student and listed the company in 2007. He and his dentist wife, Brigitte Gotthardt, and their doctor son, Daniel Gotthardt, as well as a related shareholder, Reinhard Koop, own a majority.
Profit Warning
CompuGroup issued a profit warning and changed its chief executive officer in July, forecasting a drop in operating profit amid challenges for its units serving doctors and hospitals that sent shares tumbling. Daniel Gotthardt took over as CEO after the company mutually agreed to terminate Michael Rauch’s contract early. The stock had declined 57% this year through Friday.
While CompuGroup is operating in an attractive sector, its revenue and profit margins have fallen short of expectations over the past quarters, Daniel Pindur, a managing partner at CVC, said in an interview on Monday.
“We aim to work in partnership with the Gotthardt family on providing the firm with stability and financial flexibility to transform and return to a more profitable growth in the mid-term,” he said.
CVC owns insurance software developer RGI in Italy and also backs health care IT solutions provider System C in the UK. CompuGroup will stay as a standalone company, according to Can Toygar, a senior managing director at CVC.
CompuGroup provides Ambulatory Information Systems, or software for doctors’ offices, as well as IT for hospitals and pharmacies. CompuGroup had annual revenue of about €1.19 billion in 2023 with products in 60 countries and more than 8,700 employees in 19 countries, according to a fact sheet.
Analysts at Hauck & Aufhaeuser this month started coverage of CompuGroup with a sell rating, saying the software company is “structurally losing its edge” in its biggest division, AIS, which has been ceding market share in its core Germany market for more than 10 years.
(Updates with CVC comments from seventh paragraph.)
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