Advent buys 30% stake in Aareon

The deal is expected to close in Q4 2020.

The deal is valued at €260m and will lead to a capital gain for Aareal Bank of €180m, according to a statement. The acquisition values Aareon at €960m, corresponding to an equity value of €860m.

Unquote sister publication Mergermarket reported in July 2020 that sponsors in the process included CVC, EQT, Blackstone and Bain. The company was marketed based on EBITDA of €50m and was expected to generate a multiple of 13-17x.

Advent and Aareal Bank plan to support Aareon's organic growth and assist with add-on acquisitions to broaden its product offering, according to the same statement. Both parties have agreed to supply additional equity where needed to finance Aareon's M&A activities, while the company also aims to continue to take on sustainable levels of debt.

The acquisition is an all-equity deal and sees Advent investing via Advent International GPE IX and its companion technology-focused fund Advent Global Technology. Advent GPE IX held a final close in June 2019 on its hard-cap of $17.5bn and writes equity tickets of $100m-1bn for companies valued at $50m-3.5bn. Advent Global Technology held a final close in September 2019 on $2bn. The fund plans to invest 75% of its capital alongside Advent GPE IX, using the remaining portion to acquire minority stakes in technology companies, writing equity tickets from $50m.

Company
Founded in 1957 and headquartered in Mainz, Aareon provides enterprise resource planning (ERP) software and consulting services for businesses in the property sector. It advises on digitalisation and security projects and offers software for functions including tenant and homeowner data exchange via Aareon Smart World.

The company reported 2019 revenues of €252m and EBITDA of €61m. The company aims to implement its Rule of 40 plan by 2025, meaning it aims to reach a sum of EBITDA margin and revenue growth that exceeds 40%. It employs 1,500 people at 37 sites in Europe.

People
Advent International – Ranjan Sen (managing partner, head of Advent International Germany).
Aareon – Manfred Alflen (chairman of the management board).
Aareal Bank – Hermann Merkens (chairman of the management board).

Advisers
Equity – Hengeler Mueller (legal).
Vendor – Arma Partners (corporate finance).

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• Topics
• Expansion
• DACH
• Technology
• Germany
• Advent International