Hg invests in EQT, TA backed IFS and WorkWave

Following the transaction, Hg will become the second largest shareholder in the companies, while EQT will remain the majority owner via its EQT VIII and EQT IX funds. Existing investor TA Associates is also divesting part of its shares to Hg and will be the third largest shareholder, followed by the companies' management.

A source close to the company told Unquote IFS has delivered 3x money for EQT VIII after only a two-year holding period.

Hg's investment is made in the holding company which holds 100% of IFS and around 87% of WorkWave, according to the source. In 2021, WorkWave was separated from IFS and now operates as a standalone portfolio company.

Mergermaket reported earlier this week that the IFS was in advanced stages of a tightly run sale process, with most discussions pointed to a minority stake sale. Hellman & Friedman was among sponsors said to have expressed interest in a deal, according to the report.

The new investment will support the companies' organisations and product capabilities, both organically and through strategic add-on acquisitions, according to the press release. EQT VII fund acquired the IFS from Stockholm Stock Exchange in 2015. In 2016, WorkWave was bought by EQT and ran as a subsidiary of IFS.

The new investment will support the companies' organisations and product capabilities, both organically and through strategic add-on acquisitions, according to the press release.

EQT VII fund acquired the IFS from Stockholm Stock Exchange in 2015. In 2016, WorkWave was bought by EQT and ran as a subsidiary of IFS. Last year, EQT spun out WorkWave and it is now a standalone company.

EQT and TA acquired the businesses from EQT VII fund in 2020. At the time, the company was valued at more than USD 3bn, according to Unquote Data.

Under EQT's and TA's ownership, the companies have undergone several strategic initiatives including rebranding, launching IFS Cloud, establishing a fourth product segment, and three add-on acquisitions. According to a press release, between FY19A and FY21A, IFS grew cash EBITDA by 51% per annum and Software Revenues by 22 percent per annum, with 70 percent of revenues this year being recurring.

EQT VIII fund held a final close on EUR 10.75bn hard-cap in February 2018, according to Unquote Data. EQT IX held a final close on EUR 15bn hard-cap in January 2020. The fund focuses on US-and Europe-based companies operating in healthcare, TMT, services, and selectively in industrial technology, according to Unquote Data.

EQT is currently fundraising for EQT X,which was announced in January 2022 and has a target of EUR 20bn, according to Unquote Data.

Hg is currently deploying equity via funds including Europe Middle Market LBO Fund, which held final close at EUR 2bn in September 2021. The vehicle will back underperforming mid-market companies in Europe with valuations of up to EUR 1bn, with a focus on Western European businesses, according to Unquote Data.

Hg and EQT declined to comment. TA Associates did not respond to a request for comment.

Company
IFS was founded in 1983 and is headquartered in Linköping, Sweden. The company develops cloud-based enterprise software. IFS enables its clients to digitize core operations through its unified platform while making the clients' value chain more efficient. It employs over 4,500 employees across 50 countries.

WorkWave was founded in 1984 and is a cloud-based business management platform, this includes supporting its customers' business life cycle through marketing and sales.

People
IFS - Darren Roos (CEO).
EQT - Johannes Reichel, Per Franzén (partners).
Hg - Nic Humphries (partner).

Advisers
Vendor - Arma Partners (corporate finance); White & Case (legal); Kirkland & Ellis (legal); PwC (financial, tax due diligence).

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