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ECM-managed fund acquires stake in PikeTec

German Equity Partners V (GEP V), a Fund managed by independent German investment company ECM Equity Capital Management (ECM), has acquired a stake in Berlin software developer PikeTec.

PikeTec specialises in testing and verifying the functionality of safety-relevant embedded software for electronic control units, for example in the field of intelligent driver assistance systems. Together with ECM, the company founders Dr. Eckard Bringmann, Andreas Krämer and Dr. Jens Lüdemann want to continue the success of PikeTec and capture the significant growth potential resulting from increasing automation and digitization of vehicles. As managing partners, the founders will also continue to lead and develop PikeTec in the future. The parties have agreed not to disclose further details of the transaction.

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 50 software developers and engineers. With its software “TPT” (Time Partition Testing), developed by PikeTec, so-called embedded systems – software programs that are written specifically for the control of electronic control units – can be tested and developed more accurately and efficiently than with other methods. The need for such specialized testing methods is growing rapidly, particularly in automotive engineering. This is due to two reasons: On the one hand, the number and complexity of software-based functions in vehicles is constantly increasing due to increasing automation and digitization. On the other hand, the software development process can be carried out more reliably and efficiently through the use of TPT.

TPT is a highly adaptable product, and the scope of performance and area of application have been continuously expanded since its market launch. As a result, it has become a leading solution in the market. Today, TPT is the only test software of its kind that is compatible with a variety of development environments and systems and can be used for all software development phases. In addition, PikeTec also offers its customers TPT-based engineering services as well as training and implementation of the product in their development environment. In light of the increasing number of systems for intelligent driving, safety, energy management and comfort, vehicles are becoming more complex and testing needs are increasing. At the same time, the quality of the software and efficient processes are crucial. In addition, constantly rising levels of regulatory requirements for software and the trend towards autonomous and electrified driving will increase the demand for test software even further. This development can also be seen in adjacent industries such as aviation, medical technology and mechanical engineering due to increasing industrial automation and increased networking of machine components. These new areas of application provide attractive growth potential for the further development of PikeTec.

ECM has extensive experience in implementing growth and internationalisation strategies, which it has proven in previous investments in industries relevant to PikeTec such as the industrial automation, medical technology and automotive sectors as well as the software industry. In partnership with ECM, PikeTec intends to continue the successful growth path of the past few years. In the future, a broader market approach and targeted internationalisation will both further increase the value added in the core automotive industry and allow entry into undeveloped industries – all at a global level. In addition to its strategic expertise, ECM is also contributing a long-standing network of industries to the partnership.

Jens Lüdemann, founding partner and managing director of PikeTec, says: “We are proud that TPT has established itself as a leading application in a fast-growing market. We owe this in particular to the adaptability of the product and the innovative power of our team. We now want to use this competitive advantage to grow even further. In ECM, we have found an entrepreneurial partner who understands our business and contributes both relevant experience and a long track record of successfully implementing growth strategies.”

Florian Kähler, partner and management director of ECM, adds: “PikeTec has an impressive technology whose applications are far from exhausted and for which we see extremely interesting growth potential worldwide. Growing beyond the core market and the parent industry is always a critical step for founders. As a growth partner of medium-sized companies, we have successfully supported this process on many occasions and are pleased to accompany PikeTec on this journey with our knowledge and our industrial network.”

GEP V was advised on this transaction by Milbank (legal and structuring), Berylls Strategy Advisors (market due diligence), Ebner Stolz (finance & taxation), Intuitus (IT) and Willis Towers Watson (insurance). Florian Kähler, Max Thielemann, Benedikt Müller and Paul Hansen are responsible for the transaction at ECM. PikeTec was advised on the transaction by Carlsquare (M&A) as well as Dittmar Lawyers (legal) and BWLS Strunk Stoffersen (taxes and structuring).

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