Aareal Bank, Advent to sell Aareon to TPG in €3.9bn deal

Aareal Bank and Advent International has agreed to sell Aareon, a European provider of Software-as-a-Service (SaaS) solutions for the property industry, to TPG and CDPQ.

The financial terms of the sale are based on an enterprise value for Aareon of approximately € 3.9 billion, valuing Aareal Bank’s equity stake in Aareon at approximately € 2.1 billion.

Closing is expected to take place in the second half of 2024.

TPG will invest in Aareon through TPG Capital, the firm’s U.S. and European private equity platform, in consortium with CDPQ, a global investment group, who will co-invest alongside TPG for a minority interest in Aareon.

Advent will continue its involvement in Aareon with the investment of new equity for a minority interest in the standalone company.

The company is headquartered in Mainz, Germany.

Jochen Klösges, Chief Executive Officer of Aareal Bank and Chairman of the Supervisory Board of Aareon, said: “We are pleased to have found new owners for Aareon who, thanks to their financial strength and pronounced industry experience, are well positioned to propel Aareon into its next major step of evolution. Over the past few years, we successfully developed Aareon into a ‘Rule of 40’ company, that has demonstrated impressive organic and inorganic growth. We look forward to maintaining our successful collaboration through our joint venture, First Financial Software, which not only fortifies our long-term partnership with Aareon but also opens up further growth prospects for all parties involved.”

Flavio Porciani, Partner at TPG, said: “For many years, we have admired Aareon’s position as a leader in the European property management industry and are thrilled to partner with the Aareon team and our fellow investors to build on the successes of the business as a standalone company. The need for comprehensive property management solutions is growing amid a trend towards digitalisation of real estate workflows and an increasingly complex regulatory environment. Aareon’s platform is built to support this evolution, providing owners and managers an integrated, modern system that improves connectivity and streamlines business operations.”

Jeff Paduch, Managing Partner of Advent International and Supervisory Board Member of Aareon, commented: “We are proud to have supported the leadership team and employees of Aareon in their successful transformation, which is culminating in one of the largest software buyouts in Europe in 2024. The company is well positioned to continue to lead innovation for its customers in the European housing ecosystem and is on a path of sustainable growth with exciting opportunities ahead for all stakeholders.”

Harry Thomsen, Chief Executive Officer of Aareon, said: “This transaction marks a milestone in the development of Aareon. Thanks to the strong support of our owners Aareal Bank and Advent International, the company has made excellent progress in recent years. Now, we have reached a point where we can take the next step in our development. We are in an ideal position to capture further growth opportunities and welcome TPG and CDPQ as experienced and strong new partners.”