SoftwareOne and Crayon’s market values are now neck and neck as the duo this morning came clean on rumours they are in advanced talks.
SoftwareOne’s shares dropped by nearly 12% yesterday as Bloomberg reported it is nearing a deal to acquire its smaller rival and go private.
In contrast, Crayon’s shares yesterday leapt by over 8%
The software licensing duo both confirmed in separate statements this morning that they are in “advanced discussions” (see bottom).
Market value parity
In a strange quirk, recent events have left the senior partner in the potential union worth no more than the company it could be gearing up to buy.
SoftwareOne’s shares dropped sharply last month as new CEO Raphael Erb unveiled “disappointing” Q3 results. A “rushed” go-to-market overhaul has slowed sales in the UK and elsewhere, he acknowledged.
It has now lost almost two-thirds of its value since it rebuffed multiple private equity approaches last summer.
SIX Swiss-listed SoftwareOne, which has around 9,300 staff, had a market valuation of 968m Swiss Francs (£857.5m) first thing this morning.
In contrast, Oslo-listed Crayon’s market valuation had risen to NOK 12.15bn (£860m).
Crayon is around roughly half the size of SoftwareOne, with around 4,000 employees.
Rumours that duo were exploring a possible merger first emerged in September.
Pan-European monster
SoftwareOne and Crayon are already the two majestic forces of the European software licensing space.
The duo generate a respective 60% and 62% of their revenues from EMEA, with Crayon’s non-EMEA business slightly more tilted towards APAC.
When it comes to the UK, Crayon and SoftwareOne placed 61st and 108th in the recent Oxygen 250 (although the former was ranked by gross sales and the latter by ‘netted down’ revenues).
In a statement this morning, SoftwareOne said:
“SoftwareOne Holding AG, a leading global software and cloud solutions provider, confirms that it is in advanced discussions to acquire Oslo-listed Crayon Group Holding ASA for a consideration of cash and shares.”
In a similarly worded statement, Crayon said:
“Crayon, a global leader in IT services and innovation, confirms that it is in advanced discussions with SoftwareOne Holding AG, regarding a potential voluntary offer by SoftwareOne to acquire the shares of Crayon for a consideration of cash and shares.
“There is no certainty that these discussions will lead to an offer being launched by SoftwareOne. The company will provide further updates in due course.”
