German software company EQS Group is being taken private by Thoma Bravo for about €400 million ($435.1 million) in a deal that represents a massive 53% premium over its pre-announcement value. Shares of EQS are up just under 52% today, implying that the market expects the deal to complete, and at the listed price.
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We care about a relatively small PE take-private of a software company that —be honest — you had not heard of until this deal was announced because of the why behind the transaction, and what it could mean for quite a number of startups operating in the regulatory technology (regtech) market.
Briefly, EQS Group is a public company that sells compliance and investor relations software. In the third quarter of 2023, EQS reported 14% revenue growth (year-over-year) to €16.88 million, the addition of €3.00 million worth of new ARR (+50%), and adjusted EBITDA of €2.32 million (+49%). EQS is therefore not massive. In fact, it’s a relatively small company compared to most public software concerns.