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Private equity group EQT has made an all-cash offer for Swedish software group Fortnox in concert with the company’s largest shareholder and chair Olof Hallrup, sending shares up 36 per cent on Monday.
The bid, which values the company at $5.5bn, caps a tumultuous year for the group, an accounting software specialist that operates only in Sweden. Former chief executive Tommy Eklund resigned in August 2024 following scrutiny of Fortnox’s accounts and disclosure practices.
The bidders have said they will not increase their offer of SKr90 per share, with the company noting that the statement was binding under takeover rules. Hallrup’s vehicle First Kraft owned 18.9 per cent of the company’s shares as of the end of last year.
Short sellers had drawn attention to the company’s metronomic customer growth and its accounting practices, with a report from the Financial Times sending shares down more than 12 per cent in March 2024.
One short seller said they were “gobsmacked” by the bid, given that the company said it had not disclosed any inside information to the bidder during the due diligence process.
Critics have long questioned the potential for future sales growth at a company which dominates its home market, in an industry where entrenched market positions and local accounting practices make cross-border mergers difficult.
Roger Hartelius, a former chief financial officer, is acting as chief executive while the search for a replacement continues. Due to the conflicts of interest affecting two Fortnox board members, the group said it would seek a fairness opinion from accounting firm EY on Monday’s offer.
“With high expectations for the future, reflected in Fortnox’s current valuation, the consortium believes that Fortnox stands at a critical juncture, where future growth will require significant investment in product development and potential M&A initiatives,” said Omega II, the vehicle for the two bidders.
The bidder expects to publish an offer document in mid May, with shareholders likely to have until the middle of June to accept the offer.
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