Palamon makes 6x cash on Italian sale

Palamon Capital Partners is understood to have made a profit of around six times cash invested from the sale of its stake in Italian software provider TeamSystem to Bain Capital and management.

Palamon Capital Partners, the European mid-market private equity firm, has sold a 67 percent stake in Italy’s TeamSystem via a secondary buyout to Bain Capital. The consideration was not officially disclosed, but a source close to the deal cited a figure of around €280 million.

The same source added that Palamon had made a profit of around six times its money since acquiring TeamSystem in June 2000, and delivered an IRR to investors of more than 50 percent. A statement claimed that during that period, TeamSystem’s revenues and pre-tax profits grew by 2.5 times.

Based in Pesaro, TeamSystem develops and markets financial management software products for tax, payroll, accounting, budgeting and Enterprise Resource Planning in the small and medium sized (SME) business community. The group employs more than 450 staff and has a customer base in excess of 43,000 served by 12 subsidiaries and a network of around 300 software partners throughout Italy.

A statement said that, following the deal, TeamSystem would continue to be run by the existing management team under the leadership of chief executive Gianandrea De Bernardis. Management is retaining a “significant” equity stake in the group going forward.

Commenting on the latest deal, De Bernardis said: “TeamSystem will benefit from access to Bain Capital’s extensive network and financial resources. This will allow us to find new ways to serve our customers while increasing our market share in a highly fragmented sector.”

Bain Capital was provided with legal advice on the deal by Gianni Origoni Grippo and Kirkland & Ellis, and accounting and tax advice by PWC. PWC also provided tax advice to Palamon, which received legal advice from Dewey Ballantine and financial advice from HSBC. The Royal Bank of Scotland and Intermediate Capital Group, which provided unspecified debt financing, were advised by Ashurst.