EQT's Suse lists in €5bn IPO

The company set its IPO price range at €29-34 per share earlier in May. The IPO sees 37.3 million shares listed at €30 apiece, valued at around €1.1bn.

The IPO has a free float of 24.3% based on its total offer size. Suse's €5.05bn market capitalisation puts its IPO on par with Permira's TeamViewer, which listed on the Frankfurt Stock Exchange in 2019 with a market cap of €5.25bn.

Alongside its announcement that the IPO would be priced at €30 per share on 18 May, Suse said in a statement that cornerstone investors Capital Research Global Investors and GIC had agreed to purchase €340m in shares at the offer price.

EQT placed 14.2 million shares as part of the IPO and will retain a stake in the company following the listing. It stands to receive proceeds of up to €570m from the deal. Suse is to receive proceeds of around €549m, which it will use to reduce its debt.

Melissa Di Donato, CEO of Suse, said in a statement that she intends to invest more than 80% of her net proceeds from the deal in the IPO.

Bank of America Securities and Morgan Stanley are acting as joint global coordinators and joint bookrunners, while Deutsche Bank, Goldman Sachs, Jefferies and JP Morgan are joint bookrunners.

Previous funding
GPs including Apax Partners and LGT Capital Partners have previously invested in Suse, according to Unquote Data. Suse was sold to trade in 2003 in a deal that saw Novell acquire the company for $210m, according to Unquote Data.

Novell was subsequently acquired by Attachmate, following which UK-listed software and consultancy business Micro Focus acquired the company as part of its merger with Attachmate in 2014.

In 2018, Bloomberg reported that Micro Focus was under pressure from shareholder Elliott Management to sell Suse, arguing that the company was not fully valued by investors within the Micro Focus group.

EQT acquired Suse from Micro Focus in a $2.535bn deal in July 2018. The GP deployed equity via EQT VIII, which held a final close in February 2017 on €10.75bn. The GP owns its shares in Suse via its Marcel Lux III holding company. According to Unquote sister publication Debtwire, the deal was backed by a term loan from Tikehau Capital Partners, with JP Morgan, Deutsche Bank, Goldman Sachs and Jefferies as lead arrangers for the club distribution loan.

Suse acquired US-based Rancher Labs in July 2020 forming its Suse Rancher product portfolio for container management and storage.

Company
Founded in 1992, Suse develops open-source enterprise software, specialising in Linux systems. The platform has functions including server and cloud storage, as well as IT infrastructure management. Suse employs around 2,000 staff and is headquartered in Nürnberg.

At the time of EQT's investment in 2018, Suse reported adjusted EBITDA of $98.9m for the year ending in April 2017 and $54.4m for the six months to October 2017. In the year to 31 October 2020, the company reported adjusted revenues of $503m, an increase of 17.6% compared with the same period in 2019. 98% of its revenues came from recurring subscriptions, according to a statement.

People
EQT – Johannes Reichel (partner).
Suse – Melissa Di Donato (CEO).

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