EQT, ATP to buy Danish IT company for $341m

Nordic buyout firm EQT Partners and Danish pension fund ATP have penned an agreement to acquire Danish IT provider KMD for DKK 2 billion (€269 million; $341 million) from the Local Government Denmark, member authority of Danish municipalities.

KMD provides IT solutions largely for Danish municipalities and is expanding to include the state and corporate markets.

Following the acquisition, expected to close in early 2009, EQT will have 85 percent ownership of KMD with the remainder owned by ATP.

ATP will contribute half of its share from the ATP Private Equity Partners II fund and half from the debut Via Venture Partners Fund.

ATP Private Equity Partners is the fund of funds and co-investment unit of ATP, which manages around €4 billion in four separate fund vehicles on behalf of ATP. Via Venture Partners is the venture subsidiary of ATP, founded in 2006 with DKK 1 billion at its disposal for IT investing.

Half of the total investment cost will be paid in equity and half will be funded by debt provided by Danish financial institutions Danske Bank, Nordea, Nykredit, FIH and ATP.

The private equity firms expect an ownership period of three to seven years and anticipate that KMD will be a candidate for an initial public offering at the time of exit.

EQT invests in Northern Europe, Eastern Europe, China and the US. The firm has raised €12 billion across 12 funds. The firm has made eight investments to date in Denmark, including grain processing company Cimbria, cancer diagnostics company Dako and furniture manufacturer Bodilsen.

EQT closed its debut infrastructure fund on €1.2 billion this year and last year closed its second expansion capital fund on €475 million. The firm’s fifth and most recent buyout fund focused on Northern Europe closed on $4.25 billion in 2006.