The founding shareholders around Daniel von Stockar take command. But the second part of their plan for the important Microsoft partner must also work.
The revolt of the founding shareholders of the IT giant Software One is successful. The board of directors of the Stans-based group is being replaced. Amid widespread applause in the hall of the Lucerne Congress Center – and against the recommendation of voting rights advisors – a clear majority of shareholders voted in favor on Thursday.
This means that the IT service provider could soon be taken over by the financial investor Bain Capital and then disappear from the stock exchange. Software One trades in computer programs and is the world’s largest reseller of Microsoft products. The group employs more than 9,000 people worldwide and generates a billion francs in sales, but is hardly known in its home country.
The IPO is to be revised
A group of three founding shareholders, led by Daniel von Stockar, were not happy with the way the business was going. They teamed up with Bain Capital. The American private equity company proposed taking over the group last year and then delisting it from the stock exchange. The old board of directors rejected this. Von Stockar will now head the new management body, which will be filled with people he has recommended.
In addition to Stockar, René Gilli and the entrepreneur Beat Curti’s holding company are taking part in the rebellion. Stockar and Gilli played central roles in the company’s founding more than twenty years ago; Curti joined as an investor. Together they hold around 29 percent of the shares. Stockar stepped down as chairman last spring but reappeared in the spotlight through an alliance with Bain Capital.
Software One went public in 2019 – too early from today’s perspective, according to Daniel von Stockar. In fact, the course did not meet expectations. To date, the securities have not recovered from a crash at the beginning of 2022. Without pressure from the financial market, Software One should develop better. «Software One has become too sluggish and risk-averse. The drive has been lost,” said von Stockar in an interview with the NZZ in February.
Success is not certain
The big question now is whether Bain Capital will launch a new, official takeover offer. “Maybe there are offers, maybe not. We don’t know,” von Stockar explained after the vote. Bain had recently signaled a price of 18.80 francs per share – slightly more than the issue price almost five years ago. If there is no official offer, the founding shareholders would be left with a shambles.
Bain’s last offer was too low for the old board of directors, which is why it rejected the proposal, thereby provoking a revolt from the founding shareholders. They also want to sell some of their securities to Bain. A shareholder’s question about what advantage it would have for small investors to be forced out of the company remained unanswered.
In principle, von Stockar has little objection to the company’s strategy. The CEO, Brian Duffy, who has been in office for almost a year, confirmed the plan to expand advice to corporate customers in addition to the pure resale of software. Among other things, the company wants to help clients organize the multi-year transmission of their data in the cloud. Such services are intended to bind customers more closely. The consulting segment is growing faster than classic reselling, but still contributes less than half of sales.
Operationally, Software One is on the right track: sales climbed by 3 percent to just over 1 billion francs last year, and adjusted operating profit (Ebitda) rose by 2 percent to 245 million francs. If you exclude the influence of the strong franc, sales growth of 8 to 10 percent is expected for 2024. That would be at least as much as the currency-adjusted increase in 2023. In addition, profitability should improve slightly.