Private Equity Firm Secures a Majority, but Not All - Delisting of IT Company Still On the Table
Data Group's sole ownership by KKR has ended; delisting plans remain intact.
Private equity giant KKR nabs a controlling stake in Datagroup, a Swabian IT service provider listed on the Frankfurt exchange, despite fewer than 70% of shareholders accepting the offer. The transaction, which prices shares at €54 each, remains pending for the remaining shares. Founder Max Hans Hermann Schaber hangs on, rallying behind the deal.
Deal Details
Despite employing a higher offer price to entice more shareholders, KKR failed to secure the required 80% or 90% acceptance threshold that would have bumped up the offer price. The tender for their public offer, which was active from the 16th of April, has ended, and KKR claims 67% of Datagroup shares - about 5.59 million shares. The exact date for the deal completion has yet to be announced.
The Missing Pieces
Only a modest 7.6 percentage points were added to the initial 59.4% of tendered shares. This low acceptance rate, despite the recommendations from the supervisory board, management board, and significant shareholders, raises some intriguing questions.
In the Founder's Corner
The primary stockholder in question, Max Hans Hermann Schaber, makes up 54.5% of the shares. This alliance with KKR will continue to shape the future of Datagroup. KKR and Datagroup have agreed to initiate the delisting process immediately after the payment settlement, specifics depending on regulatory approvals.
A Significant Step Forward
Schaber called the delisting a "significant step forward" for Datagroup, and plans to expand the modular IT service portfolio with artificial intelligence after the takeover. Baresel, Datagroup's CEO, echoed this sentiment, while Laura Schröder, KKR's Managing Director, expressed excitement about the long-term collaboration.
Looking at the Big Picture
Historically, European companies that have been acquired in the last decade have delisted from the stock exchange after acquisition. These companies, totaling over $2.6 trillion in market capitalization, include Compugroup Medical (CGM) and SNP Schneider-Neureither. In the case of Datagroup, the deal implies delisting, with regulatory approvals to follow.
Insights
- Shareholder dissatisfaction, lack of trust, holding out for more, strategic considerations, and regulatory concerns could be reasons why a takeover might not reach the desired level of acceptance despite a sweetened offer.
- The specific reasons in the case of Datagroup are likely related to shareholder dynamics, strategic decisions, and market conditions.
- Delisting is a common move for companies after acquisitions, and the outcomes can significantly impact market capitalization.
The private equity firm, KKR, has secured a majority stake in Datagroup, a Swabian IT service provider, through investing in business, despite not meeting the 80% acceptance threshold required for a higher offer price. Founder Max Hans Hermann Schaber, who holds 54.5% of the shares, continues to support the deal and plans to expand the IT service portfolio with artificial intelligence after the delisting, a significant step forward for Datagroup.
