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Hellman & Friedman to take control of Italy's TeamSystem

Reuters - UK Focus

(Adds announcement, advisers)

By Pamela Barbaglia

LONDON, Dec (Shanghai: 600875.SS - news) 7 (Reuters) - U.S (Other OTC: UBGXF - news) . buyout fund Hellman & Friedman has agreed to buy a controlling stake in Italian software firm TeamSystem, it said on Monday, in a deal that sources say values the business at about 1.2 billion euros ($1.3 billion).

Hellman & Friedman said it would buy a majority of the Italian provider of accounting software from London-based private equity house HgCapital, which has agreed to retain a minority stake.

It (Other OTC: ITGL - news) is Hellman & Friedman's first acquisition in Italy after the U.S. private equity house lost out to a consortium of Bain Capital (Other OTC: CGHC - news) and Advent in an auction to buy Italian banking services firm ICBPI in June.

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Rothschild advised HgCapital on the deal while Mediobanca (Milan: MB.MI - news) acted as financial adviser to Hellman & Friedman.

Based in Pesaro, in central Italy, TeamSystem specialises in tax, payroll and accounting software for small and mid-sized Italian businesses.

It has a long history of private equity ownership as buyout funds have consistently injected capital for the past 10 years.

U.S. buyout firm Bain Capital first secured control of the business in 2005 and subsequently sold a majority stake to HgCapital for about 565 million euros in 2010.

The so-called tertiary buyout by Hellman & Friedman values the business at a double digit multiple, based on its core earnings, sources close to the deal said.

Details of the transaction were not disclosed but a source close to the seller said the business was valued at a multiple of around 16 times its expected earnings before interest, taxes, depreciation and amortization (EBITDA) of roughly 75 million euros in 2015.

Another source, close to Hellman & Friedman, said the U.S. fund based its calculation on a pro-forma EBITDA of 93 million euros, and therefore paid a multiple of 12 to 13 times. He said the business continues to offer strong growth potential in its home market.

Spokesmen at Hellman & Friedman and HgCapital declined to comment on the financial details of the deal.

($1 = 0.9251 euros) (Additional reporting by Massimo Gaia in Milan; Editing by Mark Potter and Susan Thomas)