ECM-managed private equity fund sells software company PikeTec to Synopsys

  • Successful journey underpinned by substantial growth, internationalisation, and evolution of the business model
  • Development of a dedicated sales and marketing team and institutionalisation of the organisation lay the foundations for future expansion

German Equity Partners V (“GEP V” or “the Fund”), a fund managed by independent German investment company ECM Equity Capital Management GmbH (“ECM”) today announced the sale of its majority stake in Berlin software developer PikeTec GmbH (“PikeTec”) to Synopsys, Inc., a US-based global leader in electronic design automation (EDA) and semiconductor IP. The fast-growing software company PikeTec specializes in testing and verifying the functionality of embedded software, with a focus on the automotive industry. The parties have agreed not to disclose the purchase price of the transaction nor the terms of the deal, which already closed at signing. With the successful completion of the transaction, ECM managed funds have achieved their second successful exit in 2023, following the sale of the Dermatologikum Group.

Development of the organisation and implementation of a software subscription business model

Since the entry of GEP V in 2019, the software specialist founded in 2007 by Dr Eckard Bringmann, Andreas Krämer and Dr Jens Lüdemann, has developed significantly and has successfully initiated the transition of PikeTec’s business model from a traditional licence to a software subscription business model. With the support of ECM, PikeTec has pushed ahead with its internationalisation and has entered into successful sales partnerships, particularly in the fast-growing Asian markets of India and China. This success is underpinned by substantial revenue growth as well as a significant increase in the share of recurring software sales. In addition, PikeTec has increased the number of its workforce by more than 50 per cent. Furthermore, PikeTec has adapted its organisational structures to the company’s rapid growth in recent years and created the conditions for continued expansion in the future.

Global and loyal customer base

With a team of around 60 software developers and engineers, the company is one of the leading providers of test software. PikeTec combines the development of a standard testing software with complementary testing services into a test automation proposition. The company’s Time Partition Testing (TPT) tool enables embedded systems – electronic control unit software – to be tested more accurately and efficiently than with other methods. PikeTec’s focus is on early-stage testing such as Model- and Software-in-the-loop. The software specialist’s core market is the automotive industry, with OEMs and Tier 1 suppliers as its main customers. With its tools, PikeTec serves customers in around 20 countries worldwide.

Andreas Krämer, co-founder of PikeTec, said: “We would like to thank ECM for the successful cooperation over the past four years. With the support of ECM, we have developed PikeTec’s business model into a software subscription model, have driven international expansion, particularly in Asia, and have created the necessary organisational foundations for continued growth. Thanks to ECM’s excellent international network, we were able to find the right strategic partner in Synopsys for the further development. We are excited to shape and change the future of virtualization, simulation and testing.”

Florian Kähler, Managing Partner of ECM, added: “We have enjoyed working in partnership with PikeTec founders Dr Eckard Bringmann, Andreas Krämer and Dr Jens Lüdemann on an equal footing. Since the beginning of our partnership in 2019, we have supported management in accelerating PikeTec’s successful growth path and in driving the internationalisation of the company. We would like to thank the management team for the trust they have placed in us and wish the team and the company every success for the future alongside their new partner Synopsys.”

GEP V was advised on this transaction by Houlihan Lokey (M&A), Milbank (legal and structuring), Roland Berger (commercial) and Ebner Stolz (financial & tax). Florian Kähler, Jan-Luca Bell and Benedikt Müller were responsible for the transaction at ECM.

About ECM Equity Capital Management GmbH (“ECM”)

ECM is a trusted growth partner for mid-sized enterprises and entrepreneurs in German-speaking Europe. Since 1995, ECM has raised the private equity funds GEP I-V with aggregate equity commitments of more than €1 billion and currently invests out of its fifth fund GEP V (€325 million). The funds invest primarily in leading mid-market companies with attractive growth potential in the context of ownership successions, partnership transactions and corporate spin-offs.

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About PikeTec GmbH (“PikeTec”)

PikeTec was founded in Berlin in 2007 by Dr. Eckard Bringmann, Andreas Krämer and Dr. Jens Lüdemann. Today it is one of the leading providers of specialized test software with a team of around 60 software developers and engineers. PikeTec develops the testing tool TPT and also offers Testing-as-a-Service. PikeTec advises companies in the field of testing safety-relevant embedded systems, assumes test modelling, execution and evaluation for external customers and is also active in test tool development and integration. The TPT software is compatible with various safety standards and is used in all software development phases (MiL, SiL, PiL, HiL).

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