Silver Lake’s perpetual merger machine
The California-based private equity firm Silver Lake has for years been combining European software companies with the aim of creating regional competitors to larger global rivals.
It’s not been an easy task, with global European software champions few and far between while US groups overshadow them in size.
In 2022 Cegid, a French software group backed by Silver Lake, KKR and AltaOne Capital, acquired Grupo Primavera in a €6.8bn deal. Both Cegid and its Spanish rival had grown in the preceding years by buying up their competitors.
Now the project is entering its next phase.
Silver Lake is merging Cegid with Silae, another French software company backed by the buyout group, DD’s Alexandra Heal and Arash Massoudi scooped on Tuesday.
About 10 years after first backing Cegid and more tie-ups later than DD can count, Silver Lake has found itself with a combined group worth more than €10bn that will sell accounting, HR and other enterprise services.
The transaction will leave Silver Lake owning between 66 and 75 per cent of the combined company, according to people with knowledge of the matter. Part of the rationale for the combination was that a bigger group would eventually be easier to list in Europe, one of the people said.
The merger will also enable the groups to combine crucial data and integrate software, according to the people, enabling bigger investment in AI solutions as investors grapple with the impact of AI advances on software groups.
But the slow pace of growth shows just how difficult it is to build European competitors to US software giants.