Bain Capital Partners has agreed to sell TeamSystem, an Italian business software group founded in 1979, to HgCapital, the two firms said on Tuesday.
The sale price of €565 million represents a multiple of 11.3x TeamSytem’s 2010 EBITDA of €50 million.
TeamSystem: Popular among private equity firms
The transaction would mark TeamSystem’s third set of private equity sponsors. The business was a hit for its first private equity-backer, Palamon Capital Partners, which originally invested in 2000. When Palamon sold the company to Bain in December 2004 for around €280 million, it generated six times the firm’s original investment and an IRR of 50 percent.
Under Bain’s ownership, the business has doubled both its revenue and earnings via organic growth and eight bolt-on acquisitions since 2004, Bain said in a statement.
For HgCapital, the investment represents a continuation of its “thematic” investment across Europe, the firm said in a statement. “The company operates in a market segment we are extremely familiar with, and has a business model which closely resembles our prior investments in this segment,” said Alex King, head of the HgCapital’s TMT team, who will be joining TeamSystems board. HgCapital also noted the company “has proven resilient through the downturn, as the software it provides is business-critical for customers, rather than being a discretionary purchase”.
It is the firm’s fifth investment in the regulatory-driven SME software market since 2004.