Battery Ventures launches Forterro sale via Arma Partners

Information memoranda have been distributed to prospective bidders for the London-headquartered group, which consists of a group of brands offering ERP software solutions to small- and medium-sized businesses, two of the sources said.

Forterro generates around GBP 50m of EBITDA, two of the sources said. The company is growing organically in the double-digit range with revenues estimated to be in the region of EUR 200m (GBP 166m), according to reports.

The business is likely to attract interest from sponsors, one of the sources said. However, the level of appetite will partially depend on the company's potential to further consolidate the EPR market and a move to more of a subscription-based model, this source added.

Battery Ventures attempted a sale process for the company in 2018, which was eventually shelved due to concerns about integration of the company's acquisitions, one of the sources said.

Aptean, the US-based enterprise software solution provider, is the company's closest comparable, one of the sources said. Aptean was exploring a sale via Barclays in a process that was expected to value the business at a mid-teens EBITDA valuation multiple, as reported by Mergermarket in November.

Other comparable deals could include European ERP providers Unit 4 and The Access Group, one of the sources said.

TA Associates and Partners Group replaced Advent as Unit4's main owners earlier this year, valuing the group in excess of USD 2bn, at a 15.3x EV/EBITDA multiple, according to Mergermarket data.

The Access Group, which is majority owned by TA Associates, drew a GBP 30.9m investment from Hg Capital at a valuation of GBP 1bn or EV/EBITDA multiple of 38.9x, Mergermarket data shows. TA Associates first acquired its stake in Access for GBP 225m from Lyceum Capital in January 2015.

Microsoft, Oracle, Sage, Wolters Kluwer and Technology One could also provide buyers and the seller with a valuation benchmark, a sector banker said.

Forterro has been growing through a slate of add-on acquisitions since Battery's investment in 2012. Recent acquisitions include German reseller abas Software, announced earlier this year, and myfactory, a cloud-based ERP software provider based in the same region, which was completed in 2021. The company's product companies operate in Sweden, Switzerland, France, Poland, and Germany, and collectively serve around 10,000 manufacturing clients.

Battery Ventures and Arma Partners declined to comment. Forterro did not respond to requests for comment.

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• Topics
• Exits
• Technology
• UK / Ireland
• Mergermarket
• Arma Partners
• Battery Ventures