HG CAPITAL takes majority stake in LUMESSE EX STEPSTONE SOLUTIONS

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.