CA buys Austrian peer Automic in $635 million deal

Industry: Automotive 2016-12-03

U.S. software management group CA Inc (CA.O) said on Thursday it has agreed to buy Austrian business automation firm Automic from private equity group EQT in a 600 million euro ($635 million) deal as it seeks to expand in Europe.

Automic specializes in helping developers of some of the most complex business applications to roll out new releases of software at companies such as Bosch, Netflix, eBay, Exxon Mobil, Vodafone, Société Générale, General Electric and Swisscom.

It aims to post earnings before interest, taxes, depreciation and amortization of 44 million euros in its fiscal year ending in April 2017, on sales of 142 million.

The deal values Automic at 13.6 times its expected core earnings, while CA trades at 7.5 times.

CA’s shares dropped 3.4 percent by 1633 GMT.

Buyout group EQT acquired the company in 2012 for 210 million euros and made 3.2 times its money as measured by its internal rate of return of more than 30 percent.

At the time of EQT’s acquisition of Automic, the company made 65 million euros in sales and was very focused on its clients in the German-speaking world.

EQT brought in a new management team, bought the largest European peer Orsyp and invested in the U.S. sales force.

The buyout group had launched an auction in summer with the help of investment banks Arma Partners, Goldman Sachs and attracted suitors including buyout group Advent.