SUSE, an enterprise software company, aims for a $7 billion IPO estimate

SaaS News -SUSE-seeks-valuation-of-nearly-$7-billion(source: SaaS Industry)
At a Glance

SUSE, an Enterprise software company, has set a pricing range of 29 to 34 euros per share for its initial public offering in Frankfurt, suggesting a market capitalization of between 4.9 and 5.7 billion euros ($5.9-$6.9 billion). 

SUSE, whose open-source software helps run applications on cloud servers, mainframe computers, and network edge machines, said it was looking for investors to help it raise about 1 billion euros.

EQT, a Swedish private equity firm that owns SUSE, recruited American CEO Melissa di Donato, a SAP veteran, to lead SUSE two years ago. Now, she has her sights on sustaining double-digit sales growth through both internal investment and acquisitions.

The planned IPO will give us the financial and strategic flexibility to accelerate our growth while continuing to power mission-critical IT applications and workloads that are vital to our customers’ digital transformation.

Melissa di Donato

SUSE will receive just over half of the proceeds from the issuance of new shares, allowing it to lower its debts to 3.25 times core earnings. The remaining shares will be sold by EQT, which bought SUSE for $2.5 billion in 2018 and expects to at least increase its investment.

According to SUSE, funds run by Capital Research Global Investors and GIC Private Limited have committed to buy shares worth up to 360 million euros subject to terms, implying that ‘cornerstone’ investors will cover more than a third of the IPO.

There are 31.9 million new and current shares are included in the base deal. If upsize and over-allotment options are exercised, this will rise to 41.1 million shares at the bottom end of the price spectrum, giving a free float of up to 26.5 percent.

The first trading under the SUSE ticker is due to begin at the Frankfurt Stock Exchange on May 19. 

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