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By Douglas Busvine
BERLIN, April 26 (Reuters) - SUSE, an open-source enterprise software company with German roots, on Monday announced its intention to float on the Frankfurt stock exchange as it seeks fresh capital to invest in organic growth and acquisitions.
SUSE will issue $500 million in new shares via the offering to pay down debt while Swedish investment fund EQT, which acquired SUSE in 2018 for $2.5 billion, will sell an unspecified further number of existing shares.
EQT hired SAP veteran Melissa di Donato to run SUSE two years ago and the American - the first woman to lead a company undertaking an initial public offering in Germany - has driven its aggressive expansion.
"The planned IPO will give us the strategic and financial flexibility to secure our independence for the long term," di Donato said in a statement.
Di Donato, a rare example of a female CEO in the male-dominated tech industry, is a personal advocate of encouraging women to lead and has written books for girls with colourful titles such as 'How Do Mermaids Poo?'.
SUSE, founded in 1992, provides enterprise solutions using open-source software such as Linux, making it possible for businesses to run applications in hybrid settings ranging from cloud data centres to devices at the edge of networks.
The Linux specialist last year completed its own acquisition of Rancher Labs, a leader in another application called Kubernetes, which enables computing tasks to be made portable.
Di Donato told reporters she would look out for further potential acquisitions as she targets top-line growth outpacing SUSE's forecast of annual growth in its addressable markets of 17% between 2020 and 2024.
SUSE reported adjusted revenue of $503 million in the year to last Oct. 31, representing growth of 17%, with a gross profit margin of 94%. Revenue growth continued at the same pace in the quarter to Jan. 31, the company said.
SUSE will issue new shares with a view to reducing its leverage ratio - or net debt in relation to core earnings - to 3.25 times. It did not give a figure for its current leverage ratio.
It was not immediately clear how big a stake EQT would sell, but a source familiar with the matter said the IPO could give an overall valuation between 5 billion and 8 billion euros ($6.1 billion to $9.7 billion).
BofA Securities and Morgan Stanley are acting as joint global coordinators and joint bookrunners on the offering, with Deutsche Bank, Goldman Sachs, Jefferies and J.P. Morgan acting as joint bookrunners. ($1 = 0.8264 euros) (Reporting by Douglas Busvine Editing by Riham Alkousaa and David Goodman )