Mid Europa to acquire Sage Group's Polish business

Harriet Matthews
10 December 2020

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Mid Europa Partners is to acquire the Poland-based operations of UK-headquartered enterprise software business Sage Group in a deal valued at approximately £66m.

The deal is expected to close early in 2021, Mid Europa said in a statement.

The GP is currently deploying equity via Mid Europa V, which held a final close in January 2020, following a first close in December 2018 on €500m. The fund generally makes equity investments of €75-200m, targeting CEE-based businesses with enterprise values of €100-500m. The vehicle has available capital of €1.2bn, which includes capital from related partnerships.

The deal is currently an all-equity investment, but the GP intends to put leverage in place on the closing of the deal.

Unquote sister publication Mergermarket reported in November 2020 that the auction process for Sage Poland had entered the second round, with sponsors including Oakley Capital and Accel-KKR cited by sources in the report as participating in the process. Sources told Mergermarket that Sage Poland could be sold for an EBITDA multiple of 8x.

Following the acuisition, Mid Europa intends to partner with Sage Poland to consolidate the fragmented ERP software market in Poland and CEE. The GP aims to make add-ons to supplement the company's cloud offering and to expand its product range and verticals.

Company
Founded in 1981 and based in Warsaw, Sage Poland provides enterprise resource planning (ERP) and payroll software for SMEs, covering functions including HR, customer relationship management, payments and cloud accounting. The company operates via a subscription-based model and under the Symfonia brand; its four products are Symfonia 50Cloud, Symfonia ERP, Symfonia Kadry i Płace One Payroll and Symfonia Start.

Sage Poland reports revenues of £23.5m. It generates EBITDA of PLN 30m (approximately £6.2m), according to Mergermarket, and employs 400 people.

People
Mid Europa Partners – Kerim Turkmen (partner); Marek Rodak (principal); Can Karapence, Maciej Michalak, Adam Gołoś (investment executives).
Sage Poland – Piotr Ciski (managing director).

Advisers
Equity – Arma Partners, VCP (M&A); White & Case (legal); BCG Platinion (commercial due diligence, technology due diligence); PwC (financial due diligence, tax).
Vendor – Rothschild (M&A).