Aurelius scores 25.7x on Swiss IT business

The sale comes after Aurelius netted a 24.5x return on the sale of Hungarian-based Framochem last week

The Aurelius Group, a German-listed private equity firm, has agreed to sell Switzerland-based IT service provider connectis, as well as its small sister company SOFTIX to SPIE Group, European service provider of electronics and information technology.

The group will sell the business for CHF 48 million (€39 million, $53 million) according to a statement. Aurelius will net a 25.7x return on the sale, according to a source familiar with the matter.

The group acquired connectis in 2008 in an all-equity deal, investing €1.7 million from Aurelius’ balance sheet, the source added. The firm achieved the return by expanding the business through organic growth and a buy-and build strategy. It hasn’t used leverage or refinancings to boost returns, according to the source.

Aurelius declined to comment on deal financials.

Aurelius will distribute a portion of the proceeds to shareholders in the form of a special dividend, the group said in the statement.

Connectis, which employs 370 people, offers its customers solutions for secure networks and applications in voice, data and video communications together with communications and workspace management services. Its clients include Microsoft and Avaya.

Under Aurelius’ ownership, the business grew from the fifth-biggest to the second-biggest IT provider in Switzerland and helped connectis with making a number of add-on acquisitions over recent years, according to the statement.

During the investment period, connectis increased both revenues and profits. In 2013, the company generated revenues of CHF 132.4 million, Aurelius said.

“The sale to SPIE will give connectis a committed new owner who will assist the company over the next steps in its development,” Dirk Markus, chief executive officer of Aurelius, said in the statement.

The transaction marks the fourth exit for Aurelius so far this year. Last week, Aurelius sold Hungarian-based Framochem, a manufacturer in the chemical sector, netting the firm a 24.5x return, according to the source.  

Aurelius typically invests in European companies with revenues between €30 million and €750 million in deals with an enterprise value of up to €150 million. It has offices in Munich and London as well as 21 subsidiaries in Germany, England, France, Ireland, Poland, Hungary, the Netherlands and Switzerland.