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Nordic Capital, KKR explore possible offers for Temenos – sources

Buyout groups Nordic Capital and KKR [NYSE:KKR] are studying possible offers for banking software developer Temenos [SWX:TEMN], according to three sources familiar with the matter.

At least one private equity firm has in recent weeks engaged advisers to assist with commercial due diligence on Geneva-based Temenos, which has come under pressure from activist Petrus Advisers to undertake a “fundamental strategic review of its business, strategy and outlook”, two of the sources said.

Whether any suitor comes forward with an offer for the CHF 5.06bn (USD 5.46bn) market value company is likely contingent on leveraged finance markets continuing to open up, the sources said. There is also no guarantee that Temenos, which is currently looking for a permanent chief executive officer following the resignation of Max Chuard, would be receptive to a deal, they added.

Additionally, while Petrus is seeking a strategic review of Temenos, the investment firm is understood not to desire any process that resembles a fire sale of the company, one of the sources said.  

A potential takeover of Temenos has long been floated among suitors and their advisers, but progress towards making a firm offer has been complicated by the firm’s lofty valuation expectations and more recently the difficulty of securing financing amid choppy credit markets, sources said.    

This news service reported in October that a number of financial sponsors were circling the Swiss company, with Goldman Sachs and Citi retained by management to field buyout interest from parties including Thoma Bravo and EQT [STO:EQT]. Other buyout firms said to have looked at the business in recent years include Hellman & Friedman, Permira and Blackstone.

Nordic Capital previously owned financial trading technology firm Itiviti, which until its USD 2.5bn (EUR 2.1bn) sale to Broadridge Financial Solutions [NYSE:BR] in 2021, had been taking market share from more established multi-asset trading solutions providers. Thoma Bravo bought Adenza, formerly known as Calypso Technology, from Bridgepoint [LON:BPT] and Summit Partners for USD 3.75bn (EUR 3.1bn) in March 2021. 

Shares in Temenos, which are up roughly 24% year-to-date, have lost more than 60% in market value since reaching highs of CHF 180.75 in May 2019. The stock was trading on Tuesday, 7 February, at CHF 66.70 per share. 

Representatives for Temenos, Nordic Capital, KKR, Thoma Bravo, EQT, H&F, Permira and Blackstone declined to comment. Petrus, Goldman Sachs and Citi also declined to comment.