Rothschild’s buyout fund tests appetite for $1.5bn software firm A2Mac1

Rothschild’s private equity arm is sounding out prospective bidders to launch the sale of a majority stake in French automotive software firm A2Mac1, a deal valued at up to $1.5bn.

Five Arrows Principal Investments (FAPI) – which is owned by Rothschild and manages $2.85bn of capital focused on mid-market investments in Western Europe – is holding preliminary talks with a series of private equity firms ahead of an auction process in September, the sources said, speaking on condition of anonymity.

Jefferies is running the sale on behalf of FAPI, which wants to retain a significant minority stake in the business, two of the sources said.

Rothschild and Jefferies declined to comment. FAPI was not immediately available for comment.

A2Mac1 provides vehicle data and analysis tools to original equipment manufacturers (OEMs) while also specialising in benchmarking solutions for the car industry.

FAPI bought A2Mac1 in 2017 for more than €200m.

The business is valued at between $1bn and $1.5bn, representing a multiple of more than 20 times the company’s core earnings of 50 million euros, the sources said.

French investment firms Astorg and Eurazeo are among local investors weighing bids for the company, two of the sources said.

European private equity fund Hg, which opened an office in France earlier this year, is keen to win a deal in the country and is closely looking at a possible offer for A2Mac1, two other sources said.

U.S. buyout fund KKR and European rival Permira are also likely to get involved given the recession-proof appeal of the technology industry, the same sources added.

Permira, Hg, Eurazeo and KKR declined to comment while Astorg was not immediately available for comment.

Source: Reuters