EQT's Suse buys Rancher Labs

Harriet Matthews
09 July 2020

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Open-source enterprise software infrastructure company Suse, a portfolio company of EQT, has acquired California-based Rancher Labs.

The deal is expected to close in October 2020 and aims to expand Suse's service offering.

In June 2020, Rancher Labs CEO Sheng Liang told Unquote sister publication Mergermarket that the company's revenues grew by 169% in 2019. While the company was focusing on organic growth, Liang said it would not rule out a sale.

EQT acquired a majority stake in Germany-based Suse via an LBO in July 2018 for a consideration of $2.535bn on a cash and debt-free basis. EQT invested via EQT VIII, which held a final close on €10.75bn in February 2018. Suse generated sales of $320m and EBITDA of $98.9m in 2017, and currently employs 1,600 people.

In March 2019, Tikehau Capital Partners provided a term loan to back the LBO, with JP Morgan, Deutsche Bank, Godman Sachs and Jefferies as lead arrangers for the club distribution loan, according to Unquote sister publication Debtwire.

Previous funding
Rancher Labs raised a series-A financing round in June 2015, raising $10m from Mayfield and Nexus Venture Partners.

In May 2016, GRC SinoGreen, Mayfield and Nexus backed a $20m series-B round for Rancher Labs.

In July 2019, new investor F&G Ventures backed a $25m round for the company, along with existing investors.

Telestra Ventures backed a $40m series-D round for Rancher Labs in March 2020, alongside existing investors Mayfield, Nexus, GRC SinoGreen, and F&G.

Company
Rancher Labs develops software that aims to enable companies to manage container-based automated application deployment and management programme Kubernetes on any IT infrastructure.

Founded in 2014, Rancher Labs is based in Cupertino, California, and has 250 employees. The company has a further three offices in the US, as well as offices in China, Amsterdam and the UK. Rancher Labs' clients include Deutsche Bahn, Fox Sports and American Express.

People
Rancher Labs – Sheng Liang (co-founder, CEO).
EQT – Johannes Reichel (partner).
Suse – Nils Brauckmann (CEO).

Advisers
Acquirer – Jefferies (corporate finance).