DATAGROUP backs KKR’s €54 per share public offer in strategic investment agreement

What is the structure of KKR’s planned investment in DATAGROUP?

DATAGROUP SE, a provider of IT services based in Pliezhausen, has entered into a definitive investment agreement with Dante Beteiligungen SE, a holding company controlled by investment funds managed by Kohlberg Kravis Roberts & Co L.P. and its affiliates. Under the agreement, KKR intends to acquire DATAGROUP shares through a public purchase offer priced at €54.00 per share in cash.

The transaction, which values the offer at approximately 33 percent above the closing price of DATAGROUP shares on April 15, 2025, is being positioned as a strategic investment aimed at forming a long-term partnership with the company’s founding shareholder. This marks a significant turning point for the company, as it transitions from public market listing towards a new ownership structure under private equity control.

Why is the DATAGROUP board supporting KKR’s offer?

The management and supervisory boards of DATAGROUP have fully endorsed the proposed investment. The boards described the offer as both fair and financially attractive. They unanimously approved the investment agreement and indicated they intend to recommend shareholders accept the offer once the official documentation is made available.

Further reinforcing their support, all board members confirmed they will tender their personally held shares in DATAGROUP as part of the offer. This show of internal alignment highlights confidence in the valuation and strategic future under KKR’s involvement.

What are the terms of the public purchase offer and who stands to benefit?

The offer, priced at €54.00 per share, represents a premium of roughly 33 percent over DATAGROUP’s Xetra closing share price on the day of the announcement. The proposal extends to all outstanding shares, with no minimum acceptance threshold required for completion. This structure simplifies the acquisition process and opens participation to all shareholders.

The bid is not governed by the German Securities Acquisition and Takeover Act due to DATAGROUP’s shares not being traded on a regulated market, which exempts it from certain legal requirements and may streamline the process.

How will ownership change following the KKR investment?

In parallel with the investment agreement, a separate but interconnected arrangement was signed between KKR’s entities and Max H.-H. Schaber, DATAGROUP’s founder, along with his family’s holding vehicle, HHS Beteiligungsgesellschaft mbH. HHS will transfer its 54.4 percent stake in DATAGROUP to KKR’s bidding entity through a private transaction outside the public offer.

This side transaction will result in joint long-term control over DATAGROUP by KKR and HHS, each holding an indirect 50 percent stake in the Bidder. As a result, the investment not only strengthens KKR’s foothold in the German IT services sector but also formalises a long-term collaboration with the company’s founder and primary shareholder.

What are the implications of the planned delisting?

A key component of the investment agreement is the intent to delist DATAGROUP shares shortly after the offer is settled. Both parties agreed that this step would be implemented directly, without a separate delisting offer. This move will shift the company’s shareholder base away from the public market and fully into private ownership.

The delisting is expected to grant the company greater operational flexibility under the joint control of KKR and HHS. However, it also signifies the end of DATAGROUP’s public equity chapter, which has spanned several years on Germany’s over-the-counter market.

Will KKR seek full control through a domination agreement?

KKR has committed not to pursue a domination and profit and loss transfer agreement (DPLTA) with DATAGROUP for a period of two years following the settlement of the offer. This assurance, built into the investment agreement, may serve to reassure minority shareholders participating in the public offer that the company’s operations and governance will remain relatively stable in the immediate term.

The absence of a DPLTA means that DATAGROUP will continue operating as a standalone legal entity, with its financial performance remaining ring-fenced from the broader KKR portfolio for at least two years. This provision is common in private equity investments where the aim is to gradually implement strategic changes without disrupting existing structures too abruptly.

How is the deal financed, and what is the timeline?

KKR has committed to financing the entire transaction through equity from its managed funds, avoiding the need for debt issuance. This approach ensures financial certainty and reduces execution risk, especially given the regulatory scrutiny involved in transactions of this scale.

The deal remains subject to customary conditions, including regulatory clearances. It is not conditional on a minimum level of shares being tendered in the offer, which provides KKR and its affiliates with flexibility to move forward even if some shareholders opt not to sell.

Assuming all approvals are secured, the transaction is expected to close in the third quarter of 2025. The formal offer document, which will outline terms, conditions, and acceptance procedures, is anticipated to be published shortly, triggering the offer acceptance period.

What does this mean for the IT services industry in Germany?

DATAGROUP has long been a notable mid-cap player in Germany’s fragmented IT services sector, known for its managed services offerings and focus on SMEs and public sector clients. With KKR’s entry, the company could gain access to additional capital, scale, and international strategic networks.

KKR’s broader track record in digital infrastructure and IT services investments suggests a potential strategy of enhancing DATAGROUP’s market share through bolt-on acquisitions or digital transformation initiatives. The move also reflects growing private equity interest in tech-enabled services firms with predictable recurring revenue models.

By aligning closely with founder Max H.-H. Schaber through shared ownership, the deal preserves institutional knowledge while opening the door to strategic repositioning. The joint control model may also be used to balance continuity and change, depending on market dynamics and customer needs.

What does market sentiment suggest for DATAGROUP shares?

Following the announcement of KKR’s offer, DATAGROUP’s stock surged by over 31 percent, closing at €53.60 on April 16, 2025—just below the offer price of €54.00. This near-parity indicates strong market confidence in the likelihood of the deal closing as proposed. The stock’s current price suggests that the market has priced in the premium fully, reflecting the absence of major perceived regulatory or execution risks.

With a current P/E ratio of approximately 14.9, DATAGROUP is considered reasonably valued based on earnings. Analyst sentiment remains broadly positive, with a consensus “Buy” rating and an average long-term target price of €76.92. However, the looming delisting reduces upside potential and liquidity, a key consideration for investors.

For existing shareholders, the offer presents an attractive opportunity to realise value at a premium. For potential investors, entering the stock at this stage offers limited arbitrage opportunity due to the narrow gap between market price and offer value. Given these dynamics, most analysts suggest a “Hold” stance for current investors while the transaction progresses toward regulatory clearance and completion.