🤠 A Fistful of Formats

Thirteen million payslips a month, and behind each one a DSN, the French cousin of a UK RTI submission, which software must produce to the cent for the authorities. That is what Silver Lake is gathering by merging Cegid 🇫🇷 and Silae 🇫🇷 into a group valued at over €10bn including debt, on €1.6bn of revenue.

The asset is scarce because it is national: one payroll regime, one chart of accounts, 15,000 accounting firms that prescribe the software to their clients. Fragmentation is the real moat. France obliges nearly ten million VAT-registered businesses to receive e-invoices through an approved platform, and at the deadline barely a third had picked one. Belgium runs on Peppol. Poland has the state validate every invoice before it legally exists. Italy has worked that way since 2019. Four countries, four architectures.

Silver Lake has owned Cegid for a decade and will keep between 66% and 75% of the combined group. Debt-funded bolt-ons, Shine 🇫🇷🇩🇰 swallowed along the way, a Danish chief executive who came up through SAP 🇩🇪 and IFS 🇸🇪. Holding an accounting vendor that long is the buyout trade.

Moving an invoice sells perfectly well from Boston. America's Sovos holds registration number 0004 among France's approved platforms, courtesy of Portugal's Saphety 🇵🇹, bought in 2021. Producing a DSN does not travel. And Sovos has had Hg 🇬🇧 on its cap table since 2016.

Hg is playing Silver Lake's game with European capital, and has been at it longer. The London firm has owned Visma 🇳🇴 since 2006, grown it through 350 acquisitions and twice postponed its listing rather than exit into a software sell-off. Cegid and Silae went via Menlo Park rather than London or Stockholm because their sellers chose to, not because fate decided. For a sector that preaches sovereign capital, it should sting.

The EU's ViDA package requires digital reporting of cross-border B2B trade from 2030 and pushes older national systems into line by 2035. Founders lobbying for harmonisation are also lobbying to knock down part of the wall that has kept Boston out of European bookkeeping. They are right anyway, because a national moat only protects a national market. Nobody has yet shown that convergence favours Europeans: one format is also one target, and the deepest buyout pockets sit in California.

Whoever holds payroll and the accounting firms in several countries when formats converge will finally amortise, across the continent, an infrastructure built country by country. Visma 🇳🇴 and Cegid-Silae 🇫🇷 are in position. Pennylane 🇫🇷, now adapting its platform to German tax, is making the same bet a step behind. The rest will have spent the decade selling productivity to customers who were buying compliance.