Carlyle's tech fund buys majority stake in CSS

Majority shareholder Michael Friemel will retain a "large" minority stake in CSS and will continue to lead the company as CEO, according to a statement. Financial terms were not disclosed.

Carlyle said it will work alongside the CSS management team to support the company's growth via acquisitions and the offering of cloud solutions.

Previous Carlyle investments in the German business software market include HR software developer Personal & Informatik, enterprise content management software specialist SER Group, and iC Consult, an identity and access management service provider.

Equity for the transaction will be provided by Carlyle Europe Technology Partners (CETP) IV, a EUR 1.35bn fund that invests in small and mid-market technology-focused companies in Europe and the US.

The deal should see the fund moving closer to full deployment: according to Carlyle's recently released Q3 2021 results, CETP IV was 80% deployed as of late September, having invested more than EUR 1bn in capital since late 2018. It has not returned any capital to date, with Carlyle reporting a multiple of invested capital of 1.4x and net IRR of 40% as of 30 September 2021.

Carlyle is gearing up for the next fundraise in that strategy, as recently reported, with the GP filing registration documents for CETP V in October.

Company
Founded in 1984, CSS is headquartered in Künzell, Germany, and operates out of eight additional regional offices. CSS offers a business platform named eGecko with accounting, controlling and HR modules specifically targeted at the needs of local and multinational German mid-market customers. It serves approximately 2,500 customers across a range of industries.

People
Carlyle – Thorsten Dippel (managing director).

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