ECM sells software company PikeTec to Synopsys

Photo: Florian Kähler, Mana­ging Part­ner of ECM in Frank­furt a. Main
25. August 2023

Frank­furt a. Main — The inde­pen­dent German private equity firm ECM Equity Capi­tal Manage­ment GmbH (“ECM”), as mana­ger of the fund German Equity Part­ners V (“GEP V” or “the Fund”), today announ­ced the sale of its majo­rity stake in the Berlin-based soft­ware deve­lo­per PikeTec GmbH (“PikeTec”) to Synop­sys, Inc. a global leader in elec­tro­nic design auto­ma­tion (EDA) and semi­con­duc­tor IP based in the US. A dyna­mi­cally growing soft­ware company, PikeTec specia­li­zes in embedded soft­ware test­ing and func­tional veri­fi­ca­tion with a focus on the auto­mo­tive indus­try. The parties to the agree­ment have agreed not to disc­lose the purchase price or further details of the transaction.

With the successful closing of the tran­sac­tion, funds mana­ged by ECM have alre­ady reali­zed the second successful exit this year after the sale of the Derma­to­lo­gi­kum Group.

Further deve­lo­p­ment of the orga­niza­tion and intro­duc­tion of a subscrip­­tion-based busi­ness model
Since the entry of GEP V in 2019, the soft­ware specia­list foun­ded in 2007 by Dr. Eckard Bring­mann, Andreas Krämer and Dr. Jens Lüde­mann has deve­lo­ped signi­fi­cantly and successfully initia­ted the adapt­a­tion of its busi­ness model from a clas­sic licen­sing to a soft­ware subscrip­tion busi­ness model (“SaaS”). With ECM’s support, PikeTec has pushed ahead with its inter­na­tio­na­liza­tion and has ente­red into successful sales part­ner­ships, parti­cu­larly in the fast-growing Asian markets of India and China. This success is under­pin­ned by signi­fi­cant reve­nue growth as well as a signi­fi­cant increase in the share of recur­ring soft­ware reve­nue. In addi­tion, PikeTec has increased the number of its employees by more than 50 percent during this time and has adapted its orga­niza­tio­nal struc­tures to the dyna­mic growth of the company, thus laying the foun­da­ti­ons for further expan­sion in the future.

Global and loyal customers

With a team of around 60 soft­ware deve­lo­pers and engi­neers, the company is now one of the leading provi­ders of test­ing soft­ware. PikeTec combi­nes the deve­lo­p­ment of stan­dard test soft­ware with Test­ing-as-a-Service services to provide a unique test auto­ma­tion offe­ring. The company’s Time Parti­tion Test­ing (TPT) test­ing tool enables embedded soft­ware programs to be tested more accu­ra­tely and effi­ci­ently than with other methods. PikeTec’s focus is on early soft­ware deve­lo­p­ment stages such as model and soft­­ware-in-the-loop. The soft­ware specialist’s core market is the auto­mo­tive indus­try, with OEMs and Tier 1 suppli­ers as its main custo­mers. With its tools, PikeTec serves custo­mers in around 20 count­ries worldwide.

Andreas Krämer, co-foun­­der of PikeTec, said: “We thank ECM for the successful coope­ra­tion over the past four years. With ECM’s support, we have deve­lo­ped PikeTec’s busi­ness model into a soft­ware subscri­ber model, driven inter­na­tio­nal expan­sion, espe­ci­ally in Asia, and crea­ted the neces­sary orga­niza­tio­nal condi­ti­ons for further growth. Thanks to ECM’s excel­lent inter­na­tio­nal network, we were able to find the right stra­te­gic part­ner in Synop­sys for our further deve­lo­p­ment. We look forward to shaping and chan­ging the future of virtua­liza­tion, simu­la­tion and testing.”

Florian Kähler, Mana­ging Part­ner of ECM (Photo © ECM), added: “It has been a great plea­sure to work with PikeTec’s foun­ders Dr. Eckard Bring­mann, Andreas Krämer and Dr. Jens Lüde­mann on an equal footing. Since the begin­ning of our part­ner­ship in 2019, we have supported the manage­ment team in conti­nuing and acce­le­ra­ting PikeTec’s successful growth trajec­tory and in driving the inter­na­tio­na­liza­tion of the company. We thank the manage­ment team for the trust they have placed in us and wish the team and the company every success for the future along­side the new part­ner Synopsys.”

Advi­sor GEP V on this transaction: 

Houli­han Lokey (M&A), Milbank (legal and struc­tu­ring), Roland Berger (commer­cial) and Ebner Stolz (finance & tax) advi­sed. Florian Kähler, Jan-Luca Bell and Bene­dikt Müller were respon­si­ble for the tran­sac­tion at ECM.

About ECM Equity Capi­tal Manage­ment GmbH (“ECM”)

ECM is a trus­ted part­ner for medium-sized compa­nies and entre­pre­neurs in German-spea­king Europe. Since 1995, ECM has laun­ched the GEP I‑V equity funds with a total volume of more than €1 billion and is curr­ently inves­t­ing from the fifth fund GEP V (€325 million). The funds invest prima­rily in leading medium-sized compa­nies with attrac­tive growth poten­tial in the course of succes­sion plan­ning, part­ner­ship invest­ments and corpo­rate spin-offs.

About PikeTec GmbH (“PikeTec”)

PikeTec was foun­ded in Berlin in 2007 by Dr. Eckard Bring­mann, Andreas Krämer and Dr. Jens Lüde­mann. Today, the company is one of the leading provi­ders of specia­li­zed test­ing soft­ware with a team of around 60 soft­ware deve­lo­pers and engi­neers. PikeTec deve­lops the test tool TPT and also offers engi­nee­ring services. PikeTec advi­ses compa­nies in the field of test­ing safety-rele­­vant embedded systems, performs test mode­ling, execu­tion and evalua­tion for exter­nal custo­mers and is also active in test tool deve­lo­p­ment and inte­gra­tion. The TPT test tool is compa­ti­ble with various safety stan­dards and is used in all soft­ware deve­lo­p­ment phases (MiL, SiL, PiL, HiL).

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