Main Capital's Cleversoft on market in Rothschild-led auction

The software and technology business is being marketed off EUR 8m EBITDA, the sources said. Its full-year EBITDA may be closer to EUR 6.5m but Cleversoft's forward-looking run-rate adjusted EBITDA is likely to be higher, a fourth source said.

The Munich-based company operates in a software market that is still fragmented with the potential for buy and build, as reported by Mergermarket following an interview with the company's founder and CEO, Florian Clever, in February this year.

Cleversoft was expecting to generate FY22 sales of EUR 23m, up from around EUR 8m when Main Capital acquired the business four years ago, the CEO said. It owes its outsized growth to the three acquisitions completed under Main and was planning more acquisitions to expand both geographically and for key know-how, according to the article.

Cleversoft acquired Netherlands-based risk management software provider SecondFloor in 2019 and crime prevention specialist BusinessForensics in 2020 as well as Luxembourg-based anti-laundering software and data provider CDDS most recently.

Given the company's positioning and market potential it may expect to sell for around 25x EBITDA, two of the sources said, implying a EUR 160m to EUR 200m valuation depending on the EBITDA one takes.

In Europe, 776 software deals were closed in Europe in the last six months, according to Mergermarket data. Of those deals, 288 had financial terms disclosed with the median EBITDA multiple at 19.1x, the data shows.

Cleversoft's compliance-related reporting and documentation software is used by over 1,000 customers including banks such as Barclays and Rabobank as well as insurers, asset managers and pension funds.

Founded by Florian Clever in 2004 the company is a one-stop shop for regulatory compliance technologies including pre-trade compliance tech, financial crime prevention and supervisory reporting.

Private equity-backed compliance tech and software competitors include New York-based CIP Capital-backed Compliance Solution Strategies (CSS) and Lucht Probst Associates (LPA), a German financial compliance software firm backed by Motive Partners, as reported.

Rothschild declined to comment. Main Capital and Cleversoft did not respond to requests for comment.

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