Advised Software AG on its acquisition of IDS Scheer, a provider of Business Process Management (BPM) software, solutions and services
Jul 2009
$680 million
  • Sector: Digital, IT & Tech Services; Infrastructure Software & Cybersecurity
  • Deal Type: Strategic Deals; Public Deals
  • Engagement type: Buyside
  • Size: $680 million

Arma Partners is pleased to announce that it acted as exclusive financial advisor to Software AG (XTRA: SOW) on its proposed €487 million acquisition of IDS Scheer AG (XTRA: IDS). Software AG’s all-cash offer price of €15 per share represents a premium of 39% to IDS Scheer’s prior day closing price. Under the terms of the contract signed on 13 July 2009, the Founders, Prof. Scheer and Prof. Pocsay, have undertaken to sell their 47.7% stake in IDS Scheer AG as part of a voluntary public tender offer, to be launched by Software AG starting this quarter.

The transaction will create a global enterprise software vendor with more than 6,000 employees and over €1 billion in sales. Software AG’s strengths ― technology leadership in infrastructure software, blue-chip customer base, financial stability and global presence ― will complement IDS Scheer’s product leadership in business processes, strong partner network and large service delivery footprint with approximately 7,500 customers.

IDS Scheer also offers deep industry expertise, direct customer access across multiple verticals and a strong position in SAP consulting services. The consulting, implementation and delivery expertise of IDS Scheer will enable Software AG to deploy customer-specific Service-Oriented Architectures (SOA) and Business Process solutions to capture a larger share of its customers’ IT spending.

Complementary product portfolios, delivery models and value chains for the digitisation of business processes will be a unique value proposition in the global market. The combined company will drive growth through accelerated sales of the joint product offering, enhanced market access and consultancy expertise across verticals. The merging of the two successful business models is expected to be accretive to Software AG’s earnings within the first twelve months of consolidation.

This is the second transformational transaction on which Arma has worked with Software AG, having also acted as exclusive financial advisor on their acquisition of webMethods, Inc. (NASDAQ: WEBM) in April 2007.

– IDS Scheer (XTRA: IDS) is the worldwide market leader in business process analysis and optimisation solutions

– Offers software solutions in Business Process Analysis and Enterprise Architecture Technology

– Formidable business process and SAP implementation professional services capability

– IDS Scheer is headquartered in Saarbrucken (Germany) with 2,800 employees serving 7,500 customers in 70 countries

– Software AG (XTRA: SOW) is the world’s largest independent provider of Business Infrastructure Software

– Product portfolio includes solutions for high performance data management, applications modernisation, service-oriented architecture enablement and business processes improvement

– Software AG is headquartered in Darmstadt (Germany) with over 3,600 employees serving 4,000 customers in 70 countries

– The transaction will create a global player in infrastructure software and business process solutions with more than 6,400 employees and in excess of €1 billion in revenue

– Software AG’s strengths – technology leadership in middleware software, financial strength and a global presence – will complement IDS Scheer’s strengths – the modelling, implementation and controlling of business processes, a strong partner network and a large service presence in their 7,500 strong customer base

– The joint company strategy is focused on growth driven by the combined product offering, enhanced market access and the leverage provided by the specialist expertise of IDS Scheer’s consulting business to deliver the combined entity’s software solutions

– Arma Partners, working in close concert with the Software AG management team, leveraged its sector knowledge to proactively identify suitable acquisition opportunities for the company

– Developed an acquisition strategy which enabled Software AG to secure the support of the two co-founders and largest shareholders (professor Scheer and professor Pocsay) thereby achieving the highest possible ownership level in IDS Scheer ahead of announcing the public tender offer

– Worked closely with Software AG’s team to conduct due diligence on the target, execute an offer strategy and agree the terms of sale

– Arma Partners developed a negotiation and communication strategy for Software AG’s Board to drive relevant major shareholders to accept the offer