According to informed sources, European private equity firm EQT is exploring a potential sale of open-source software company SUSE, which could value the business at up to $6 billion (approximately €5.1 billion).
The sources, who requested anonymity, indicated that EQT has engaged investment bank Arma Partners to approach a number of private equity investors to gauge interest in acquiring SUSE. The discussions are currently in preliminary stages, and it remains uncertain whether EQT will ultimately proceed with a transaction.
EQT is the majority shareholder of SUSE. The firm took SUSE private in 2023 at a valuation of €2.72 billion ($2.96 billion). A sale at around $6 billion would roughly double SUSE's valuation in approximately two and a half years.
This potential transaction emerges amid a broad sell-off in software stocks, which has disrupted merger and acquisition activity. Investor concerns that new AI tools could displace many existing software products have weighed on technology company valuations and complicated deal pricing.
However, some investors believe that Luxembourg-based SUSE could benefit from the proliferation of artificial intelligence. They posit that demand for enterprise-grade infrastructure software may grow as companies build and deploy more AI applications.
SUSE is an enterprise software company whose open-source products help businesses run applications on cloud servers, mainframes, and network edge devices. According to its website, its client roster includes Walmart, Deutsche Bank, and Intel. The company states that over 60% of Fortune 500 companies rely on SUSE to support some of their workloads.
Sources noted that the company generates annual revenue of approximately $800 million, with EBITDA exceeding $250 million. The potential sale price is estimated to be in the range of $4 billion to $6 billion.
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