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August 17, 2015
martinwolf  Transaction Analysis
KKR Forms Partnership, Acquires 25 Percent Stake in SoftwareONE

Financial Information
  • Not Disclosed
Transaction Facts
  • Sofware portfolio management solution provider SoftwareONE announced today a partnership with KKR (NYSE:KKR) in which the global investment firm acquired 25 percent of SoftwareONE for an undisclosed amount. The remaining 75 percent will be retained by the four founding partners, management and existing shareholders.
  • SoftwareONE, a leading licensing provider for Microsoft, IBM, Oracle and others, was reported in January to be looking to triple its staff in advance of a potential 2018 IPO.
  • While financials for the transaction were undisclosed, SoftwareONE reports on its website to have more than $4 billion USD sales in 2014 with "more than 40 percent growth per year over the last 10 years." Headquartered in Switzerland, the company has 63 local subsidiaries covering 115 countries.

100 Percent Chance of Cloud

  • No More Status Quo: In the press release announcing the transaction, SoftwareONE CEO Patrick Winter acknowledged that "The software industry is changing," with growth capital from this partnership enabling SoftwareONE to add value for consumers particularly in the cloud and services space. 
  • Changing Priorities: Large Licensing Service Providers, or LSPs, were known as Large Account Resellers until July 2013, when Microsoft changed the name of the designation and began imposing a more cloud-focused mandate. Since then, software resellers such as SoftwareONE have found the traditional reselling business increasingly difficult as Microsoft and other vendors continue to cut fees and force the change.
  • Rapid ConsolidationMany resellers have found their elite partner status in danger of being revoked, with some deciding to exit the licensing business entirely. Others have sought refuge in scale, and as a result there has been a wave of consolidation. Earlier this year saw En Pointe Technologies Sales' acquisition by PCM, Inc. (Nasdaq:PCMI) and the sale of CompuCom's software licensing business to SoftwareONE. July saw rumors of further consolidation with SoftwareONE reported to be in talks to acquire Zones' licensing business.

For more information about this transactionclick here to read the press release.


martinwolf was  not the advisor in this transaction.

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With offices in the San Francisco Bay Area and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 135 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. 

 

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