PEP to buy Australian software player for $367m

The proposed consideration represents an EBITDA multiple of 14.7x and an equity value of A$448.6 million. PEP is willing to pay A$5.70 per share through a scheme of arrangement, a 43% premium to the last closing price. The stock spiked 40% following confirmation of the offer to A$5.56, where it was trading as of midday September 15, giving the company a market capitalization of about A$438 million.

Citadel’s board has unanimously recommended shareholders vote in favor of the acquisition in the absence of a superior proposal. Existing investors will have an option to retain up to a 40% collective position in the company in Class B shares via a scrip consideration scheme. The transaction is expected to be finalized in December.

Citadel specializes in secure information management in complex industries such as healthcare and defense. It claims to have Australia’s largest enterprise content management system with more than 500 million secure items, including corporate files, reports, personnel records, and operational information. It also claims the country’s largest laboratory information system, which is said to support some 50,000 transactions a day in the healthcare sector.

“Citadel’s customers will benefit from access to a broader product suite and service capability given Citadel’s ability to invest more in growth markets and sectors, and further develop its industry-leading software solutions, with PEP’s backing,” Peter Leahy, chairman of Citadel, said in a statement. “[W]e believe there will be increased opportunities to develop new technologies with new partners.”

It comes one month after PEP closed its sixth Australia and New Zealand at the hard cap of A$2.5 billion. PEP now claims to be the largest private markets fund manager in Australasia with A$4.9 billion in assets under management. Earlier this month, it acquired Australian school and childcare center supplier Modern Star from Navis Capital Partners in a deal worth about A$600 million.

Australian technology companies have proven increasingly attractive to private equity in recent years, especially in enterprise-facing categories, which are seen as more amenable to global scaling. Recent buyout activity in this theme includes Quadrant Private Equity agreeing to acquire listed IT specialist Arq Group and EQT agreeing to acquire managed IT services provider Nexon Asia Pacific.

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• Topics
• Australasia
• Buyouts
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• Technology
• Australia
• Pacific Equity Partners
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• professional services