UK software group Pinewood agrees £545mn PE takeover by Ridgeview

UK software group Pinewood Technologies has agreed a £545mn takeover by US private equity firm Ridgeview Partners, months after rival buyout group Apax withdrew its offer over fears of AI’s impact on software companies.

Ridgeview will pay 448p in cash for each Pinewood share, a premium of 43 per cent over the closing share price on July 23, the day before the firm made its interest public.

The deal values the Birmingham-based company that develops software for car dealerships at less than Apax’s £575mn, or 500p per share, offer earlier this year. Pinewood’s shares fell sharply after Apax withdrew from the deal, hitting a low of 203p in April.

The company is a former division of Pendragon, which sold its main car dealership business to Lithia in 2023.

The agreement offers a sign of life in the software market, albeit at lower valuations. Dealmaking in the sector largely died earlier this year after investors shed software stocks on fears around AI’s impact on their business models.

Private equity firms bought up swaths of companies in debt-fuelled buyouts in the years before interest rate rises in 2022.

London remained a happy hunting ground for such deals in recent years, however, including Thoma Bravo’s £4.3bn purchase of Darktrace in 2024.

The Pinewood agreement is also the latest in a surge of deals involving foreign buyers targeting London-listed groups. Companies such as easyJet, Segro and Intertek have all agreed takeovers by foreign buyers in recent months.

Ridgeview plans to work with Pinewood on a “step change in technology investment — particularly in data and AI-driven innovation”, the companies said in a statement, as well as to expand its software platform across North America.

Apax withdrew its offer in February, shortly after the so-called SaaSpocalypse, or sell-off in software sector shares, which had been triggered by the release of new AI technologies.

Bill Berman, chief executive of Pinewood, said: “Realising the full potential of the business now requires continued investment, innovation and execution at scale.”

The deal has secured irrevocable support from investors representing 49 per cent of Pinewood’s shares. The buyout is expected to complete by the end of the year.