SoftwareOne Holding AG (SIX: SWON) has announced an agreement to acquire Crayon Group (OL: CRAYN) for a deal valued at $1.4 billion, marking a significant move in the software and cloud solutions market. The acquisition is set to expand SoftwareOne’s reach in the global technology sector, capitalizing on the growing demand for cloud services, artificial intelligence (AI), and cybersecurity.
Acquisition Details
The deal, announced on Thursday, involves a voluntary stock and cash offer to acquire all outstanding shares of Crayon. SoftwareOne has offered NOK 172.5 per Crayon share, which includes NOK 69 in cash and 0.8233 shares of SoftwareOne for each Crayon share. This valuation represents a 36% premium over Crayon’s undisturbed share price, underscoring the attractive nature of the offer for Crayon’s shareholders.
Shares of SoftwareOne surged 7% to 4:25 ET (9:25 GMT) following the announcement, reflecting investor optimism about the deal’s potential.
Strategic Rationale
The merger is seen as a strategic move that will create a larger player in the software and cloud solutions space, positioning SoftwareOne to better serve the growing needs of businesses adopting cloud technologies, AI, and cybersecurity.
Raphael Erb, CEO of SoftwareOne, emphasized that the merger would enhance their ability to serve customers, especially with an increased focus on major technology partnerships with companies like Microsoft (NASDAQ: MSFT). He also highlighted the expanded capabilities that would help the combined entity address emerging challenges in the tech landscape.
SoftwareOne also expects significant synergies from the acquisition, with projected cost synergies of CHF 80-100 million within 18 months after the deal closes. Additionally, revenue synergies are anticipated due to expanded offerings and improved sales efficiency.
Financials and Structure
The combined company is projected to generate CHF 1.6 billion in annual revenue with an adjusted EBITDA of CHF 334 million, excluding synergies. The transaction will be financed through bridge facilities of CHF 700 million, and SoftwareOne expects a net debt-to-adjusted EBITDA ratio of below 2.0x by the end of 2025.
The deal, pending regulatory approvals and the acceptance of at least 90% of Crayon’s shares, is expected to close by the third quarter of 2025.
Leadership and Governance
The acquisition also includes governance changes. Crayon will nominate two members to join SoftwareOne’s board, and the combined entity will operate under a Co-CEO structure. This leadership arrangement aims to ensure continuity and collaborative leadership as the two companies integrate.
Conclusion
This deal represents a transformative step for both SoftwareOne and Crayon, aligning complementary strengths in geographical reach, customer bases, and service offerings. As the combined entity looks to capitalize on cloud adoption, AI advancements, and the expanding need for cybersecurity solutions, the deal is poised to strengthen SoftwareOne’s position in the global technology landscape.
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