While the USA is distancing itself politically from Germany, American investors continue to focus on the domestic market. Financial investor PSG Equity, which specialises in buying stakes in software companies, is steadily expanding its presence in Germany. Last week the private equity firm announced the acquisition of a stake in Munich-based company Checkmk, a specialist in IT infrastructure monitoring. This brings Boston-based PSG Equity's total number of platform investments in Germany to seven.

In the latest transaction, the founders, managers and business angels of Checkmk are selling the majority of shares in the company, which was founded in 2007. This does not involve a capital increase with fresh money for the company itself. The parties have agreed not to disclose the financial details. However, in finance industry circles the deal is said to value the company at an amount above 300 million euros. Checkmk was advised on the transaction by the investment banking boutique William Blair.

„We were looking for an investor and decided in favour of PSG Equity because they have 140 other software investments. They can help us with capital for further expansion and facilitate the expansion of our presence in the USA,“ says Checkmk CEO Jan Justus. According to PSG Managing Director and Partner Christian Stein, the financial investor is particularly attracted by the size of the market in which Checkmk operates: „This market is already worth 8 billion euros and will continue to grow. If necessary, we would support a capital increase by Checkmk.“

Checkmk's customers are the IT departments of a total of 4,000 companies in Germany as well as six other European countries and the USA, where the company is represented with a location in Atlanta. Its competitors include the US companies Solarwind, Microsoft and IBM. The company develops both open-source and commercial monitoring solutions for cloud, hybrid and data centre infrastructures, as well as modern container environments.

The Munich-based company's software forms a kind of early warning system to prevent expensive IT failures at an early stage by constantly monitoring performance and storage capacities. With 200 employees, almost three quarters of whom work in Germany, the company has a turnover of 30 million euros from regularly recurring subscription revenues and double-digit profitability.

Following the general election, PSG partner Stein remains positive about the local market: „We are apolitical. Germany is the largest economy in Europe. We are doing our bit to drive digitalisation forward. This is a structural change that is taking place almost unstoppably – regardless of the political framework", he said.

In the past quarter alone, PSG Equity added three new investments in Germany. These include the investment in Plentysystems AG, the provider of the e-commerce ERP software platform Plentyone.

The financial investor's coffers are full: PSG Equity recently raised 8 billion dollars, for the PSG VI fund with a volume of USD 6 billion, and 2 billion dollars for a continuation fund (PSG Sequel), for existing investments in five US companies plus French software company Nextlane in Lyon.

The private equity firm had already invested around 100 million euros in Sport Alliance, a software company in the fitness industry based in Hamburg, in 2023. At the end of 2023, PSG closed its second European fund with over 2.6 billion euros. „This will also be used to make further investments in Germany,“ says Stein. „Germany offers growing investment opportunities in software solutions that are needed for the digitalisation of the German economy. We see significant investment opportunities as companies of all sizes and in all sectors of the economy increasingly use digitalisation and automation tools to improve their customer service, increase productivity and secure their operations.“

PSG sees Germany as a „core market“ and has made six platform investments in addition to Sport Alliance. The largest and most valuable is the cloud security provider Hornetsecurity. There is also the billing software Billwerk+, the property software Apaleo and the cemetery software specialist Rapid Data.