Silver Lake to merge French software groups Cegid and Silae in €10bn deal

Private equity firm Silver Lake is set to merge two French software companies into a group worth more than €10bn in an attempt to offset AI’s impact on the sector and create a national champion.

The California-based buyout group will on Wednesday announce that it intends to merge Cegid and Silae to create a European company with €1.6bn in annual revenue by selling accounting, HR and other enterprise services, according to people with knowledge of the matter.

The transaction will leave Silver Lake owning between 66 and 75 per cent of the combined company, the people said. Part of the rationale for the combination was that a bigger group would eventually be easier to list in Europe, one of the people said.

The merger is not expected to return any funds to Silver Lake or minority investors in Cegid or Silae, which the buyout firm has backed since 2016 and 2020 respectively. Silver Lake’s Europe-based managing partner Christian Lucas has run both investments and will serve as chair of the combined group.

The planned transaction comes as the private equity sector grapples with the impact of recent advances in AI on the swaths of software companies it bought at high valuations in debt-fuelled deals.

Software companies had been among buyout groups’ most popular targets as their recurring revenues attracted investors. But the release of new AI agents in early 2026 triggered a software stock sell-off and shuttered dealmaking in the sector.

The market fallout led to Visma, the accounting software company owned by buyout firm Hg and valued at €19bn, shelving a blockbuster London listing. Advisers say it is hard for potential investors to assess software groups’ long-term value.

Merging Cegid and Silae would enable the groups to combine key data and integrate software, according to the people, enabling bigger investment in AI solutions.

The move would also be an attempt to build a rare example of a European champion, one of the people said. Having a single, larger group would fit Silver Lake’s shift towards backing a smaller number of more sizeable investments in the long term.

It is notoriously difficult to build European peers to US software giants, and groups such as Visma and Cegid have hoovered up companies in an effort to compete. Cegid now offers products in 15 countries.

Improving the efficiency of Cegid and Silae would help to tackle their debt load. Cegid’s credit rating was downgraded this year by rating agency S&P Global, which cited “sustained elevated credit ratios due to rapid debt-financed acquisitions”.

Recommended

The company raised more than €1.1bn in debt this year to buy fintech Shine, following other debt-financed deals in 2024 and 2025. It borrowed €1.1bn in 2023 to pay a dividend to its owners.

The Shine acquisition left Cegid with debt of about 10.5 times its earnings before interest, tax, depreciation and amortisation, according to S&P, though the rating agency said it expected the company’s “solid cash flow” would help it to reduce its leverage next year.

A person close to Silver Lake disputed S&P’s calculation and said Cegid’s debt level was five to six times ebitda.

Christian Pedersen, an executive at software group IFS, will be named chief executive of the combined group, about a year after the former Cegid CEO stepped down. Silver Lake has replaced several members of Cegid’s senior management team in the past year.