Paragon acquires Bregal's Sovendus

Founder Oliver Stoll and managing director Michael Kofluk will retain a significant minority stake in the business.

Unquote sister publication Mergermarket reported in February 2021 that Sovendus was up for sale, with first-round bids due at the end of February or start of March. The company generates EBITDA in the €15-20m range, according to the report.

Bregal acquired a minority stake in Sovendus in 2015. The GP invested via Bregal Unternehmerkapital I, which held a final close in September 2016 on €550m. The fund made buyout and growth capital deals, deploying equity tickets of €30-150m and targeting businesses with EBITDA of €5-30m.

During the investment, Sovendus made several add-on acquisitions in Germany. The company bought online marketing businesses Tharuka and RMD Regional Marketing Germany in 2016, followed by Reichweite² Beratung & Medien in 2017. Sovendus also acquired Profity in 2020.

According to a statement, the company's network of online shops also doubled to more than 1,200 during the investment period.

Paragon is currently deploying equity via Paragon Fund III, which held a final close in June 2019 on €780m, surpassing its €500m target. The fund deploys equity tickets of €30-150m per deal, predominantly acquiring DACH-based mid-market businesses with enterprise values of €30-250m and EBITDA of €10-30m. Sovendus is to be the fund's sixth platform investment, according to Unquote Data.

Paragon intends to support Sovendus's growth in Germany and Europe, and to invest in developing its existing products.

Company
Founded in 2008 and based in Karlsruhe, Sovendus provides checkout-based online marketing software for e-commerce businesses, allowing them to reward customers who make a purchase via an online shop with vouchers and special offers. The strategy aims to increase transaction volumes and bring in new customers. It has a network of 1,200 shops across the DACH region, the Netherlands, Belgium, France, Spain, Poland, Italy, England and Sweden. According to its website, its clients include Hello Fresh, Gerry Weber, Flixbus and Butlers. Sovendus employs around 100 staff, according to Bregal's website.

People
Bregal Unternehmerkapital – Jan-Daniel Neumann (managing director, co-founder).
Paragon Partners – Krischan von Moeller (managing partner); Christian Bettinger (principal).
Sovendus Group – Frank Sambeth (CEO); Axel Friedrich (CFO).

Advisers
Vendor – Baird (M&A); Paul Hastings (legal).
Management – Poellath (legal); Parklane (commercial due diligence).
Equity – Lupp + Partner (legal).

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