Silver Lake Secures Loans to Finance One-Third of Software AG Deal

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Silver Lake finances one-third of Software AG deal with loans

07/17/2023, 4:30 p.m

The US financial investor Silver Lake wants the takeover of Darmstadt Software Inc around a third financed by loans. Silver Lake has now secured 71 percent of the shares in the software house, and the second acceptance period for the remaining shareholders expires on Monday. Now the new owner, led by the investment bank JPMorgan, is looking for investors for a seven-year loan of 1.05 billion euros, which is to be issued partly in euros and partly in dollars. This is stated in the prospectus.

Interest on the loan should therefore be 500 basis points above Euribor or the US reference interest rate SOFR. The business with high-interest loans for company takeovers has recently been paralyzed because there are relatively few transactions. In addition, credit funds are increasingly competing with banks.

A third of leverage is low for private equity firms. Silver Lake put the total financing volume of the software takeover at 3.18 billion euros. The investor would have to shell out 2.4 billion euros for the shares alone if all other shareholders sold. Silver Lake has already announced that Software AG will be delisted as soon as possible.