Exclusive-Nordic Capital considers sale of regulatory tech firm Regnology, sources say

By Thomson Reuters Mar 13, 2024 | 8:20 AM

By Amy-Jo Crowley and Emma-Victoria Farr

LONDON/FRANKFURT (Reuters) – Nordic Capital is weighing a sale of German regulatory software firm Regnology, in a deal which could value the business at up to 3 billion euros ($3.27 billion), four people familiar with the matter told Reuters.

The private equity firm is speaking with investment banks about its options for Regnology and could launch an auction as early as the second half of this year, three of the people said, speaking on condition of anonymity. The timing of the sale process may slip into next year, the fourth person cautioned.

Regnology is expected to attract attention from exchange operators, rating agencies and information services groups as well as private equity firms, two of the people said.

Nordic Capital declined to comment. Regnology did not immediately return requests for comment.

The potential sale comes amid an uptick in deal activity in the technology sector as inflation and financing pressures ease.

Buyout firm Leonard Green & Partners last December agreed to buy a stake in Iris Software from Hg, valuing the business at about 3.15 billion pounds, while Blackstone acquired UK-based software firm Civica for $2.5 billion.

Regnology, headquartered in Frankfurt, provides software products in areas such as tax and regulatory reporting, which are used by banks, insurance companies, supervisory authorities and other financial institutions.

Nordic Capital acquired it in 2020 from Dutch consulting firm BearingPoint for an undisclosed sum. It has since grown via acquisitions including Irish tech firm Vizor Software in 2021, Belgian regtech firm b.fine in 2022, and Paris-based Invoke Software last year.

Regnology’s annual earnings before interest, taxes, depreciation and amortization (EBITDA) will be around 80 million euros this year, one of the people said. It generated revenues of 130 million euros in 2022, according to Nordic Capital’s website.

Potential bidders will likely look at last year’s sale of peer Adenza for guidance on Regnology’s valuation, the people said. U.S. buyout firm Thoma Bravo sold Adenza to NASDAQ for $10.5 billion, which equated to around 31 times EBITDA, they said. It will also likely attract a premium due to its scarcity value, one of the sources added.

($1 = 0.9161 euros)

($1 = 0.7828 pounds)

(Reporting by Amy-Jo Crowley and Emma-Victoria Farr, editing by Anousha Sakoui and Elaine Hardcastle)