Deutsche Beteiligungs AG: Sale of investment in Cloudflight

• Smooth succession arrangement for founder-led businesses – revenues almost tripled over three years
• Second disposal from the DBAG Fund VII portfolio
• Sales proceeds from the transaction in line with the investment’s fair value carried as at 30 September 2022
• Further value contribution expected from continued investment

Frankfurt/Main, 11 November 2022. Deutsche Beteiligungs AG (“DBAG”) has very successfully concluded its investment in Cloudflight, a leading european full-service provider for digital transformation, selling its stake to Partners Group, a leading global private markets firm, acting on behalf of its clients. The shares held by DBAG Fund VII (advised by DBAG) will also be sold. DBAG will enter a continued investment as a minority shareholder. Corresponding agreements were signed yesterday; completion is subject to approval by the authorities. The sale is expected to be closed within the next four months. Through its investment in Cloudflight, DBAG Fund VII had structured smooth succession arrangements for the founder-led business. Overall, investment in Cloudflight totalled 46.0 million euros, of which DBAG contributed 10.3 million euros.

Sales proceeds from the transaction in line with the investment’s fair value carried as at 30 September 2022             
DBAG will now realise disposal proceeds which are roughly in line with the investment’s fair value, as carried on its preliminary consolidated statement of financial position as at 30 September 2022. Hence, the transaction will not generate any further value contribution for the current quarter. However, a continued investment may generate additional value contributions from the company's future performance: As DBAG and DBAG Fund VII continue to see good development opportunities for Cloudflight, they will use part of the proceeds for a continued investment of up to 15 per cent; DBAG will account for approximately three percentage points of this. DBAG is currently preparing its consolidated financial statements, which are scheduled for publication on 1 December 2022.

Second disposal from the DBAG Fund VII portfolio

The sale of the Cloudflight investment is the second disposal of a management buyout (MBO) from DBAG Fund VII’s portfolio. Since 2016 the fund had built up a portfolio comprising twelve companies. The sale of the investment in evidia (previously blikk group) was the first disposal of a management buyout (MBO) from DBAG Fund VII’s portfolio.

Successful disposal underscores DBAG’s progress in the IT services & software segment

The successful disposal also underscores the good progress DBAG has made in the IT services & software segment. Having built up extensive know-how as well as a strong network, DBAG has now executed six investments in this segment; the share of this segment in DBAG's total portfolio value has quadrupled over the past two years, from 5 to 20 per cent (as at 30 June 2022).

Leading full-service provider for digital transformation in Europe

Cloudflight is one of the leading full-service providers for digital transformation in Europe. With more than 950 qualified staff in software development, cloud architecture, data science and strategic IT, the company enables successful digitalisation for its customers. Having further expanded its technology portfolio through the integration of Cognostics, macio, Divante and mogree, Cloudflight now offers its customers an end-to-end service portfolio, ranging from consultancy services to the development of customer-specific software and cloud-native solutions, right through to operations.

“We successfully leveraged the team’s entrepreneurial vision and the strong market growth momentum to build a European champion”, Jannick Hunecke, member of the Board of Management of Deutsche Beteiligungs AG, commented on the disposal, adding: “DBAG’s shareholders and fund investors are thus benefiting from our decision to increasingly focus on digital business models.”

Roger Kehl, Chief Executive Officer, Cloudflight, commented: “At Cloudflight, we differentiate ourselves through our broad technological capabilities, where we work with customers at every step of their digital journey from ideation through development to the operational phase. Cloudflight has enjoyed the strong development over recent years and the reliable partnership with DBAG, also providing the basis for future growth. We are now looking to continue this exciting journey, and also explore further geographic possibilities beyond the DACH region and into other high-growth European markets”.

Deutsche Beteiligungs AG (“DBAG”) has been listed since 1985 and is one of most renowned private equity firms in Germany. As an investor and fund advisor, DBAG traditionally focuses on German mid-market companies, and especially on well-positioned companies offering growth potential. For many years, DBAG’s investment focus was on manufacturing companies and their service providers, which form the backbone of Germany’s Mittelstand and its excellent global reputation. This market segment has also included IndustryTech companies for some time – i.e. companies whose products provide the foundation for automation, robotics and digitalisation. For almost a decade, we have also been investing in companies from the broadband/telecommunications, IT services & software and healthcare sectors. This means that we have opened our portfolio to business models that stand to gain particularly from the rapidly accelerating digitalisation of large parts of modern societies. With its experience, expertise and equity, DBAG supports the portfolio companies in implementing corporate strategies that sustainably create value. This makes us a sought-after investment partner in the German-speaking world. In addition, DBAG opened an office in Milan and has thus also maintained a presence in Italy since 2020. DBAG Group’s assets under management or advisory amount to approximately 2.5 billion euros.

Deutsche Beteiligungs AG
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