Intel and EI partner for Czech software buy

Intel Capital, the corporate venture arm of global chipmaker Intel and Polish private equity firm Enterprise Investors have acquired Czech Republic-based anti-virus software developer Grisoft for $52m.

The transaction saw Enterprise Investors and Intel Capital pay $52 million (€42m) for a 65 percent stake in Grisoft. According to Dariusz Pronczuk, partner at Enterprise Investors, Enterprise will hold a larger stake than Intel, but did not provide details on how much his company paid – Intel acquired its stake for $16 million, according to a press release.

There are a number of things Intel brings to the table, from networks and setting up relationships in certain markets to developing technology. Dariusz Pronczuk, partner, Enterprise Investors

Prague-based investment boutique Benson Oak was the vendor, having acquired a minority stake in Grisoft in April 2001 before subsequent investments last year saw Benson Oak increase its stake to 100 percent.

Founded in 1991, Grisoft says that its anti-virus software products are currently used on more than 25 million computers worldwide. The company has offices in Brno, Czech Republic and in the United States

Enterprise Investors made the transaction through its Polish Enterprise Fund V fund, which held a final close on €300 million in June 2004. According to Pronczuk, over 60 percent of PEF V has now been invested.

Enterprise had been screening the IT market for a number of months, and saw that Benson Oak were in the process of making a decision over a sale earlier this spring. Pronczuk said that the sale process was “reasonably quick” at around three or four months.

Dariusz Pronczuk, partner, Enterprise Investors

“There were a couple of other groups, both trade and private equity buyers, but the reason we were the ones who finally got it was the potential added value of Intel,” added Pronczuk. “There are a number of things Intel brings to the table, from networks and setting up relationships in certain markets to developing technology.”

Plans to float the business at some stage also helped EI and Intel clinch the deal, Pronczuk said. “There was also our experience in the region, in the sense of potential exits for the public markets – it’s not set in stone of course, but we have [completed] the largest number of IPOs in the region at 22 since 1995.”

Grisoft is not the first transaction that Enterprise and Intel have partnered on. In July this year, the two invested $12 million in Siveco Romania, a local software provider, with PEF V owning 22.5 percent of Siveco and Intel 10 percent.

Enterprise Investors opened its first office in Bucharest, Romania in October 2004, although it first invested in the country in 1999. The Siveco deal also marked the first year of activity of Intel’s representative office in Romania.

Pronczuk would not comment on any further activity with Intel, but said that it could happen “if the appropriate situation were in place”.