Providence wins $1.3 bln auction for French software firm A2Mac1 - sources

KPa-BM Holdings

07/10/2022 16:46

(Adds context)
    By Emma-Victoria Farr and Pamela Barbaglia
       FRANKFURT/LONDON, Oct 7 (Reuters) - Providence Equity
Partners has entered exclusive talks to buy French automotive
data firm A2Mac1 for about 1.4 billion euros ($1.36 billion),
clinching one of Europe's rare private equity buyouts in a tough
financing market, two sources told Reuters.
    Providence signed an exclusive agreement with A2Mac1's owner
Five Arrows Principal Investments last night, trumping rival
bids from buyout funds EQT  EQTAB.ST  and TA Associates, the
sources said.
    Five Arrows, advised by Harris Williams and Jefferies, will
retain a minority stake in the business, the sources said.
    Five Arrows, Providence, EQT and TA Associates declined to
comment.
    Providence's swoop on A2Mac1 comes as global M&A shrank for
the third consecutive quarter this year as rising interest rates
have forced lenders to pull back from financing large deals.
 urn:newsml:reuters.com:*:nL4N30Y395
    Providence, whose portfolio includes Colorado-based
technology firm KPA - which provides compliance systems to auto
dealers - preempted the A2Mac1 auction after bidders submitted
non-binding offers on Sept. 29 as competition to secure
recession-proof assets in the technology industry is fierce, the
sources said.
    The Rhode Island-based buyout firm focuses on media,
communications, education and technology investments across
North America and Europe and manages funds with $32 billion in
aggregate capital commitments.
    Founded in the mid-1990s, A2Mac1 is based in
Boulogne-Billancourt, near Paris, just a short walk away from
Renault's headquarters.
    It provides vehicle data and analysis tools as well
benchmarking services to the car industry with a client base
mostly focused on original equipment manufacturers (OEMs) and
Tier 1-2 suppliers.
    The deal values A2Mac1 at a multiple of almost 30 times its
core earnings of 50 million euros ($49 million), one of the
sources said.
    Five Arrows is owned by Rothschild and manages 2.8 billion
euros ($2.85 billion) of capital focused on mid-market
investments in Western Europe. It bought A2Mac1 in 2017 for more
than 200 million euros.
($1 = 1.0245 euros)
 (Reporting by Emma-Victoria Farr and Pamela Barbaglia; Editing
by Toby Chopra and Louise Heavens)
 ((pamela.barbaglia@thomsonreuters.com;  +442075427723; Reuters
Messaging: pamela.barbaglia.thomsonreuters.com@reuters.net))