SUSE prepares for multi-billion Euro IPO

The European Linux giant will soon be spun out from EQT in an IPO later this year.

The rumors were true. EQT, the Swedish-based private equity firm with €52 billion in assets, is getting ready to spin SUSE, the leading European Union (EU) Linux distributor, out in an IPO. The SUSE IPO, according to Reuters and ZDNet sources, will be worth €7 billion to €8 billion ($8.3 billion to $9.5 billion).

The SUSE IPO spinout has been in the works since late 2020. Prior to that SUSE has changed owners several times. First, it was acquired by Novell in 2004. Next, Attachmate, with some Microsoft funding, bought Novell and SUSE in 2010. This was followed in 2014 -- when Micro Focus purchased Attachmate and SUSE was spun off as an independent division. In its late move prior to the one coming up, EQT purchased SUSE from Micro Focus for $2.5 billion in March 2019.

Since then, SUSE has continued to grow. SUSE's Q3 revenue, reported in September 2020, had increased 14% year over year. This came despite the results of the COVID-19 pandemic on the global economy. 

In particular, SUSE's Cloud ACV (Annual Contract Value) bookings flourished with 81% growth. This marked 14 consecutive quarters of year-over-year cloud ACV increase.

The German Linux power also reported a 35% increase year to date in customer deals worth more than $1 million; a 50% jump in ACV bookings year over year for SUSE Linux Enterprise Server (SLES) for SAP Applications; and 25% in its US ACV bookings year over year. 

SUSE's business model has been evolving. While the company is still a Linux powerhouse, it -- like its Linux-based competitors Canonical and Red Hat -- has been focusing on containers and clouds. In July 2020, SUSE agreed to buy Rancher Labs in a major Kubernetes move.

It's believed Bank of America and Morgan Stanley will execute the IPO with the aid of Goldman Sachs, Deutsche Bank, and Jefferies. You can expect to see the IPO this May.

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