Turkven exits MNG Kargo, expects partial exit from Mikro Yazilim

Erdinc Ergenc and Murat Basboga
28 July 2023

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Following the realisation of its investment in MNG Kargo in a trade sale to DHL earlier this week, Turkish private equity firm Turkven is expecting a partial exit from Mikrogrup (Mikro Yazilim), in a potential deal with the Italian software company TeamSystem, according to a report from Unquote sister publication Mergermarket.

Turkven previously held a 70% stake in the Turkish parcel delivery business, while Turkish conglomerate Sancak Holding held 30%. They acquired the company in 2017 and had planned an IPO within the next five years, as reported. They paid USD 248m for the company, as per a domestic news report.

MNG Kargo had a Likely To Exit (LTE)* score of 54 at the time of the sale, based on Mergermarket's predictive algorithm.

Pragma Corporate Finance was mandated to look at strategic options for MNG Kargo in June 2021.

Aramex and MNG Kargo were in deal talks in 2021, but Aramex later called off the talks, as reported, because of a recent change in the company's strategic direction. During the talks with the Turkish company, some 21.6% share capital of Aramex was acquired by GeoPost/DPDgroup, a subsidiary of the French postal services company La Poste, which owned Yurtici Kargo, another Turkish parcel delivery company, a competitor of MNG Kargo.

Mikro Yazilim sale process
On the other hand, Mikro Yazilim, in which Turkven holds a majority stake with Earlybird Digital East, is being targeted by TeamSystem, a portfolio company of Silver Lake and Hellman & Friedman. Turkven will keep a minority stake after the sale, as per a previous report.

Mikro Yazilim posted a turnover of roughly USD 38m in 2022 and an EBITDA margin of 35%, as reported. Meanwhile, TeamSystem recorded a turnover of EUR 695m in 2022, as per its website.

Mikro's financial sponsors Turkven and Earlybird Digital East mandated Alpacar for the sale of the company, after the vendors put its IPO plan on ice, as reported.

Dash Software, a Netherlands-based special purpose vehicle (SPV) jointly owned by Turkven and Earlybird Digital East, holds 73.76% of the shares in the software company.

Other shareholders include Izzet Murat Sakarya (10.08%), Alpaslan Tomus (8.33%), Kadir Keskin (5.10%), Xiang Yu (1.47%), and Andac Turkmen (1.26%).

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.