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03/2010

HG CAPITAL takes majority stake in LUMESSE EX STEPSTONE SOLUTIONS

GERMANY Software / ERP, HR & Finance EV 100M - 350M EUR

Context

German media conglomerate Axel Springer, acting through its subsidiary StepStone ASA, has entered into a binding agreement to divest its talent management software division, StepStone Solutions (now Lumesse), to European sector-focused private equity firm HgCapital. Executed as a strategic corporate carve-out, the transaction is expected to close by the end of April 2010, subject to customary closing conditions. Following the completion of the deal, Axel Springer will continue to independently own and operate StepStone’s core online job board business. For the acquirer, the buyout aligns perfectly with HgCapital's TMT investment thesis, which specifically targets mission-critical "Software as a Service" (SaaS) platforms. The target exhibits highly attractive fundamentals, including a strong recurring revenue profile (with subscriptions representing over 60% of total top-line) and an outstanding customer retention rate of approximately 95%. Operating within a rapidly expanding market growing at 15% to 20% annually, the business demonstrates robust organic momentum. HgCapital intends to partner closely with the management team to drive further subscription revenue growth through enhanced cross-selling and up-selling to the existing client base. Additionally, the sponsor will focus on cost optimization to drive significant margin improvements while accelerating international expansion via targeted bolt-on acquisitions.

LUMESSE EX STEPSTONE SOLUTIONS, which reported an EBITDA margin of LOGIN in 2009, is valued in this transaction at an EV/EBITDA multiple of LOGIN, a level to compare with the average currently observed in the TMT (Tech, Media, Telecom) sector (14.3x).

Note that this data is based on contribution from our growing community, composed of M&A and Private Equity professionals, and has been verified by our team to ensure its accuracy.

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Target

Lumesse (formerly StepStone Solutions) is a premier European SaaS vendor specializing in advanced talent acquisition and talent management software. Recognized as a clear leader within its sector, the company strategically supports a highly diversified global base of over 1,400 customers. With a dedicated workforce of approximately 450 employees operating across 17 countries, the business combines a robust historical footprint in Europe with accelerating international momentum, particularly across the US and Asia-Pacific markets.

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Historical Financials (EUR)

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Other operations with LUMESSE EX STEPSTONE SOLUTIONS

List of similar M&A transactions (Date, Acquirer, Target, Country, Sector, Deal Context)
DateAcquirerTargetCountrySectorDeal Context
10/2018SABA SOFTWARELUMESSE EX STEPSTONE SOLUTIONSGERMANYSoftware

Private equity firm Hg (formerly HgCapital) has reached a definitive agreement to divest the HR software company Lumesse to trade buyer Saba Software, which is currently backed by private equity sponsor Vector Capital. The competitive sale process was run by US investment bank Jefferies Group LLC. Scheduled to successfully close by the end of 2018, the transaction brings to an end an eight-year holding period for Hg, which originally backed the platform through its £1.87bn HgCapital 6 fund. The integration of Lumesse into Saba Software—a company maintaining dual headquarters in Ireland and the US—will create a highly consolidated industry entity boasting a combined roster of 4,700 clients. For the seller, the exit concludes an investment cycle that saw proactive buy-and-build strategies, including the bolt-on acquisition of educational software business Edvantage Group. The divestiture successfully realizes an asset that had historically underperformed but registered notable operational progress over the previous year.

REFERENCES

Valuation range: EV 100M - 350M EUR

Revenue range: 50M - 100M EUR

Note: This page provides detailed data on a private equity M&A transaction. Detailed and exact financial metrics for the acquisition of LUMESSE EX STEPSTONE SOLUTIONS by HG CAPITAL are reserved for mynth community members. Register for free to unlock full data.

Authors: verified mynth contributor (mynth data is contributed by M&A / PE professionals and systematically cross-verified with private deal documents and official press releases).

Acquirer: hg capital