LONDON (Reuters) – Private equity firm Advent International is out of the race for Italian software firm TeamSystem, sources familiar with the situation said, leaving a narrowing field of buyout bidders facing off against trade rival Sage (SGE.L).
Advent, Cinven and HG Capital had all submitted indicative bids for TeamSystem, being sold by rival buyout firm Bain Capital. Second round bids are due towards the end of the month.
Advent and Bain are working on a joint bid for RBS’s payment processing business including the WorldPay unit.
Bain is looking for up to 600 million euros ($762.5 million) for the business, which provides tax, payroll and budgeting software to small and mid-sized businesses, the Financial Times has reported.
That would equate to an enterprise value of about 12 times the business’s trailing earnings before interest, tax, depreciation and amortisation (EBITDA) — a significant premium to Sage itself, which trades at 9.3 times trailing EBITDA, according to Thomson Reuters Starmine.
One of the sources said a deal at 10 to 11 times EBITDA was more achievable, particularly because some financing banks were wary about lending against a software business.
Advent, Bain, Cinven and HG declined to comment. Sage had no immediate comment.
By Simon Meads and Quentin Webb
(Additional reporting by Paul Sandle; Editing by Simon Jessop) ($1=.7869 Euro)