Ardian's Dedalus sale postponed until September

Micaela Osella , Cristiano Dalla Bona and Siddesh Mayenkar
14 June 2022

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The sale process around Dedalus, the Italian software group being sold by Ardian, has been postponed to September, according to two sources.

The auction has been paused for a couple of months as the Russian invasion of Ukraine changed sentiment around the deal, making its execution difficult, the sources said. The owners have decided to put the sale on hold, at least until the geopolitical situation is clearer, another source said, noting that they have shifted into "a wait-and-see mode" as the M&A market faces a challenging and fluid environment.

On the other hand, since the beginning of this year the IT sector has not been performing well and this has made it more difficult to command strong valuations, the first source said.

It was possibly premature for Ardian to dispose of the asset, considering Dedalus has only recently been in acquisitive mode, a third source noted. Although the asset has fulfilled its growth plans and the investment proved to be a successful one for Ardian, the owners are looking to a valuation of EUR 4bn and this could represent a point of disagreement with possible suitors, the second and a third source said.

Vendor Ardian kicked off the sale of the Italian hospital software group at the beginning of May, as reported. An undisclosed stake in the business is for sale, the article said, adding that Dedalus expects a strong EBITDA margin profile this year.

Abu Dhabi Investment Authority (ADIA) has been a minority shareholder in Dedalus since May 2021.

A fourth source said it would be unlikely for ADIA to exit its Dedalus investment considering the macro environment, even though the business is profitable. The source described ADIA as a passive investor unlike Mubadala, which takes higher risk.

Dedalus generated EUR 210m EBITDA on EUR 750m of revenues in 2021, as reported. The company has recently confirmed its 2022 budget, one source said. All existing shareholders will still be keen on diluiting their stakes, the same source said without elaborating.

Ardian is working with advisors at UBS and Morgan Stanley on the deal, as reported first by this news service.

A previous report from Il Sole 24 Ore said a number of private equity groups were in the running for Dedalus. The article cited market rumours naming Bain Capital, Advent, Silver Lake, HG Capital, Hellman & Friedman, Blackstone, CVC and KKR as potential suitors.

However, none of these funds was hot on this process, as the auction was launched recently, one source said, anticipating that in the autumn once the situation is clearer potential bidders will start studying the asset more concretely.

Ardian, Dedalus, Advent, and Silver Lake declined to comment. Abu Dhabi Investment Authority and the other bidders mentioned in this report did not respond to requests for comment.