Information on the Target

Personal & Informatik AG ("P&I"), a prominent provider of modern cloud-based HR solutions in Germany, has been instrumental in driving HR innovation since its inception in 1968. Over its 50-plus years of operation, P&I has established itself as a key player in the human resources technology sector, catering to more than 15,000 clients across Europe. These clients include small and medium enterprises (SMEs), large corporations from various industries, and public sector entities, demonstrating P&I's versatile service offerings tailored to diverse organizational needs.

P&I has experienced substantial growth in recent years, with revenue exceeding €300 million and a remarkable growth rate of over 20% in the past year. The company's success can be largely attributed to its fully integrated HR Cloud Platform, P&I LogaHR, which streamlines HR processes encompassing payroll, workforce management, and talent acquisition, thereby transforming how businesses handle human resources.

Industry Overview in Germany

The HR technology industry in Germany is witnessing significant advancements driven by digital transformation and changing workforce dynamics. As businesses increasingly adopt cloud-based solutions, the demand for innovative HR products is on the rise. This evolution is characterized by a shift from traditional software solutions towards comprehensive platforms that offer improved automation and analytics capabilities.

Germany's commitment to digital innovation is fostering a competitive environment for HR technology firms. The market landscape is populated by both established players and emerging startups, each vying for a stake in a rapidly growing sector. Significant investments in research and development, particularly in innovative HR solutions, are crucial for maintaining a competitive edge in this flourishing market.

Furthermore, the integration of artificial intelligence and machine learning in HR processes is redefining the industry. Companies that harness these technologies can gain insights into employee engagement, optimize recruitment processes, and enhance workforce planning. This potential for increased efficiency and decision-making accuracy is attracting investments and interest from various stakeholders.

The overall outlook for the HR technology industry in Germany appears positive, with continuous advancements offering new opportunities for established firms like P&I to flourish. As the market evolves, staying ahead will require companies to innovate and adapt to the latest technological trends and customer expectations.

The Rationale Behind the Deal

This transaction enables Hg to strengthen its investment in P&I, reinforcing its status as the majority shareholder after first investing in 2013. By acquiring a minority stake from Permira, which will completely exit the business, Hg seeks to capitalize on P&I's favorable growth trajectory and solidify its presence in the HR technology sector.

The valuation of €5.5 billion reflects significant growth since Hg's initial investment of approximately €400 million in 2013. The ongoing success and increasing revenue of P&I present a compelling case for continued investment, positioning Hg to benefit from the company's achievements in developing innovative HR solutions that cater to a rapidly evolving market.

Information About the Investor

Hg is a renowned investor focusing on European and transatlantic software and services businesses, committed to nurturing industry-leading enterprises that provide essential automated solutions. With a deep understanding of sector trends and a considerable operational support system, Hg is well-equipped to assist companies in scaling successfully.

Boasting a substantial portfolio valued over $160 billion and management of around $75 billion in funds, Hg's vast network across Europe and North America allows it to leverage resources effectively. The firm’s investment strategy emphasizes long-term partnerships with innovative firms like P&I, which align with its vision of fostering sustained growth and excellence in service delivery.

View of Dealert

The transaction between Hg and P&I represents a strategic move that aligns well with Hg's investment ethos. By increasing its stake in a leading provider of cloud-based HR solutions, Hg is poised to benefit from the robust growth trajectory that P&I appears to be on. Given the continued demand for modern HR solutions in the German market, this investment showcases Hg's confidence in the company’s future potential.

P&I's established position and outstanding product offerings, coupled with its impressive revenue growth, make it a compelling investment opportunity. The transition in the HR industry towards comprehensive cloud solutions positions P&I favorably among its competitors, supporting long-term value creation.

Moreover, under the leadership of CEO Vasilios Triadis, P&I is expected to continue its upward momentum. The company’s focused approach towards innovation and adaptation to market demands is indicative of its capability to withstand competitive pressures and capitalize on emerging trends.

Overall, the deal can be seen as not only a sound investment for Hg, but also a strategic partnership that can propel P&I towards new heights in the HR technology landscape.

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