Keysight Technologies, a former Agilent carve-out, is expected to acquire Carlyle Group-backed Eggplant Software for around €350 million ($384 million) sources familiar with the deal told PE Hub.
The agreement is signed, the people said, but the transaction still has to go through regulatory approvals to be completed.
Eggplant, based in London, hired Evercore to provide financial advice on its sale process in late 2019, sources told PE Hub in December.
The company provides automated and AI-driven software testing tools for companies across different industries, including financial services, healthcare, retail, telecom and media.
Keysight Technologies manufactures electronic test and measurement equipment and software. Both Keysight and Eggplant operate in the automation testing market, however, Eggplant is likely to advance Keysight’s capabilities with a newer next generation software technology, the sources said.
Keysight became independent from Agilent in 2014, taking on product lines focused on electronics and radio, leaving Agilent with the chemical and bio-analytical products.
Keysight has $19.7 billion market cap and is publicly traded on New York Stock Exchange. Company shares closed at $103.40 per share on Tuesday, up 1.3 percent since Friday’s market close, before the Memorial Day weekend.
On May 18, PE Hub reported that Eggplant was nearing a deal after holding final discussions with one to two interested parties.
Despite the covid-19 pandemic and economic slowdown that forced many firms to postpose any exit activity, the process for Eggplant went forward and attracted a number of prominent European and US-based PE firms as well as strategics, the sources said then.
Eggplant generated around €8 million ($8.85 million) in 2019 EBIDTDA and around €50 million ($55.3 million) in revenue, three sources told PE Hub in December.
Keysight’s acquisition is expected to value the company at €350 million ($384 million), which translates to 7x Eggplant’s 2019 revenue, the sources said.
Eggplant was founded in 2008 as Testplant. In 2018, Testplant acquired NCC Group’s web performance division along with a portfolio of its blue chip customers, including Argos, BMW, Barclays, John Lewis, House of Fraser, Sainsbury’s Bank, easyJet, and Auto Trader.
As part of the deal, Testplant rebranded the combined company under the name Eggplant, its leading product suite.
Carlyle invested in the company in January 2016 out of Carlyle Europe Technology Partners III, which closed on its hard-cap of €656.5 million two years earlier. The fund invests in TMT and other emerging technology companies across Europe.
Eggplant, Carlyle, and Evercore declined to comment.
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