EQT Proposes All-Cash Acquisition of Fortnox Valued at $5.5 Billion

Swedish software provider Fortnox has received an all-cash acquisition proposal from private equity firm EQT, in partnership with the company’s principal stakeholder and chair, Olof Hallrup. The bid has sparked an impressive surge in Fortnox’s share price, which surged by 36% on Monday.

Details of the Proposal

The offer, which values Fortnox at $5.5 billion, stands at SKr90 per share. This figure is considered final and binding according to takeover regulations. Hallrup’s investment vehicle, First Kraft, owned 18.9% of Fortnox’s shares as of the end of the previous year.

Context and Previous Challenges

The announcement follows a challenging period for Fortnox, an accounting software specialist that primarily serves the Swedish market. The company faced scrutiny over its financial disclosures, leading to the resignation of former CEO Tommy Eklund in August 2024.

Increased attention from short sellers focused on Fortnox’s steady customer growth and accounting practices, culminating in a share price decline of over 12% in March 2024, prompted by a Financial Times report. This has led to skepticism regarding the company’s future sales growth, especially considering its dominant position in the local market and the difficulties associated with international expansion in the accounting software sector.

Leadership and Future Prospects

Currently, Roger Hartelius, a former chief financial officer, is serving as the interim CEO while the board seeks a permanent replacement. To address potential conflicts of interest involving two board members, Fortnox has decided to obtain a fairness opinion from accounting firm EY regarding the acquisition offer.

The bidding consortium, represented by Omega II, expressed confidence in Fortnox’s future growth potential, stating, “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.”

Next Steps in the Acquisition Process

EQT and Hallrup are expected to publish the formal offer document in mid-May. Shareholders will likely have until mid-June to decide on accepting the proposal, marking a critical period for the future of Fortnox.