Investcorp to reap 3x return in softgarden sale to trade

The transaction, expected to be completed by 27 June, will result in a return in excess of 3x invested capital in less than four years, according to a press release.

Grupa Prajuc said it intends to finance the acquisition partially from its own funds, and from a bank loan obtained under a facility agreement. The loan facility agreement, for up to PLN 400m (EUR 86.21m), was signed with BNP Paribas Bank Polska, Santander Bank Polska, and Powszechna Kasa Oszczędności Bank Polski as lenders.

Investcorp acquired softgarden in 2018 via its Investcorp Technology Partners Fund IV from a consortium of vendors including Cipio Partners, according to Unquote Data. The fund, which held a final close on USD 400m in December 2018, targets fast-growing founder-owned technology businesses headquartered in Europe that specialise in the data, analytics, IT security, fintech, payments, internet, and mobility sectors. It deploys equity tickets of between USD 25-50m.

Georg Knoflach, managing director of Investcorp, told Unquote that after owning softgarden for almost four years, the GP received increasing interest for the business from both strategic players and financial sponsors. "Ultimately, the fit between Grupa Prajuc and softgarden is very strong and complimentary, as it fits perfectly culture-wise and it aligns with the buyer's strategy of entering the German market," he said.

Under Investcorp's ownership, the firm invested further capital into softgarden to enable the international expansion of the company including the acquisition of absence.io, as well as meaningful investments in product innovation and its go-to-market strategy. The sponsor oversaw the growth of softgarden's software revenue by more than 400%, the strategic entry into new markets such as France, Spain, and Poland, as well as the more than doubling of the company's employee base. Through the strategic acquisition of absence.io in 2021, softgarden expanded its product offering beyond recruitment to include features such as time-tracking, vacation and absence management, as well as digital personnel file management.

Investcorp usually invests in tech companies as the first institutional investor coming in. After it has provided support for international expansion and growth through add-ons, it usually exits by selling the asset to big strategic investors, head of Investcorp Technology Partners (ITP) Gilbert Kamieniecky told Unquote.

The transaction marks Investcorp's second exit within 18 months, following the sale of Avira to NortonLifeLock.

Company
Headquartered in Berlin, Germany, softgarden offers a recruitment software platform to a set of mid-market and enterprise customers across Europe. The company's award-winning Talent Acquisition Suite allows customers to streamline and manage their digital recruitment process in an integrated and data-privacy-compliant manner. Customers also benefit from access to hundreds of fully integrated job-boards. Together with absence.io, a provider of internal HR process solutions acquired in 2021, softgarden has over 3,500 customers. The company is active in the DACH region as well as in other European markets such as Poland, Spain, and France.

People
Investcorp − Georg Knoflach (managing director).
Softgarden − Mathias Heese (CEO).

Advisers
Vendor − Covington & Burling (legal); Deloitte (corporate finance); Kuhn & Partner (tax).
Grupa Pracuj − Kuhn & Partner (tax); Houlihan Lokey (corporate finance); White & Case (legal).

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