European private equity giant EQT Group (EQT) is considering selling open source software company SUSE, a deal that could value SUSE at as much as $6 billion (approximately 5.1 billion euros), according to people familiar with the matter.
According to sources who requested anonymity, EQT has hired investment bank Arma Partners to contact a group of private equity investors to explore the possibility of selling SUSE. Sources said discussions are at an early stage and there is no certainty that EQT will proceed with a deal.
EQT is the majority shareholder of SUSE. The company took SUSE private in 2023, valuing it at 2.72 billion euros ($2.96 billion) at the time. If sold for about $6 billion, SUSE's valuation would roughly double in about two and a half years.
The potential deal comes amid a broad selloff in software stocks that has disrupted M&A activity. Investors worry that new AI tools could replace many existing software products, driving down technology company valuations and making it harder to price deals.
However, some investors believe Luxembourg-based SUSE could benefit from the popularity of artificial intelligence, arguing that demand for enterprise-grade infrastructure software could grow as companies build and deploy more AI applications.
SUSE is an enterprise software company whose open source products help enterprises run applications on cloud servers, mainframes and network edge devices. According to its official website, its customers include Walmart, Deutsche Bank and Intel. More than 60% of Fortune 500 companies rely on SUSE to power some of their workloads, the company said.
The company, which has annual revenue of about $800 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of more than $250 million, could be sold for between $4 billion and $6 billion, sources said.