CVC Acquires Germany’s CompuGroup in a $1.2 Billion Equity Deal

CVC Capital Partners is set to acquire German CompuGroup Medical, a healthcare software company. According to Reuters, CVC offered the Germany technology firm $23.24 per share in cash. This amounts to a 51% premium of CompuGroup’s share price for the past three months. News of CVC CompuGroup equity deal pushed stocks for the software company up by 30% on December 9, 2024.

Regulatory Clearance

Based on the tech company’s 51.7 million outstanding shares, the CompuGroup medical deal is valued at approximately $1.2 billion. CVC has been negotiating the deal after it raised €26 billion in 2023 last year for the biggest buyout fund in the world.

The lowest acceptable threshold for the deal is set at 17%. The company was seen to contrast its peers that were forced to either adjust their expectations or delay their fundraising efforts. CVC’s financial statements show that the capital firm deployed about €13.4 billion between January and June this year.

Maintaining Founder Interests

CompuGroup’s supervisory board plans to recommend that offer for shareholder approval after review. The two companies have signed a strategic partnership as they await completion of the deal. CVC ‘s new investment will enable CompuGroup’s founding Gotthardt family to stay invested in the business just as they were before.

In the CompuGroup medical premium deal, the Gotthardt family and its other investment vehicles will retain about 50.1% stakes. CompuGroup was founded by Frank Gotthardt in 1987. Frank, his dentist wife Brigitte Gotthardt, their son Daniel Gotthardt, and another stakeholder, Reinhard Koop are the majority owners of the company.

Performance and Changes

In July this year, CompuGroup named Daniel Gotthardt as the new CEO after terminating Michael Rauch’s contract early. In its profit alert, the company forecasted a dip in operating profits. The forecasts were based on challenges it had been encountering serving doctors and health facilities.

The profit dip forecasts caused company stocks to tumble. CompuGroup share prices dipped to a 10-year low after the company reduced its 2024 fiscal guidance. The company’s shares had declined by 57% since the beginning of the year. This changed on Friday December 6, 2024 after they surged by 31%.

CompuGroup offers Ambulatory Information Systems and IT services for pharmacies and hospitals. Its software helps doctors and hospitals to manage patient data. In 2023, the company’s total revenue stood at €1.19 billion. The company’s third quarter revenues amounted to €283.4 million. Headquartered in Koblenz Germany, CompuGroup operates in 19 countries and has 8,700 employees. Its software products are used in 60 countries