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Oakley Capital
16 Jun 22

Building a technology champion for SMEs across Iberia.

  • >165,000 customers and more than 500 partners across Spain and Portugal
  • Largest independent business software provider
  • Strong SME demand for cloud migration to boost productivity

About Grupo Primavera

Grupo Primavera is the largest independent provider of business management software in Iberia, working with more than 165,000 customers and 500 partners including medium, small and micro-sized companies and accountants across Spain and Portugal. Comprising thirteen brands, Primavera helps entrepreneurs and their businesses migrate critical financial management processes to the cloud, improving productivity, operational efficiency and customer experience. With a strong track record of delivering double-digit revenue growth through organic initiatives and M&A, Grupo Primavera is on a mission to become Iberia’s number one business software provider, with the greatest market share.

Why we liked the business

Oakley saw an opportunity to create a technology champion for SMEs across Iberia, consolidating a highly fragmented market while providing SMEs with digital solutions to simplify and automate their business processes. We also saw an opportunity to invest behind the megatrend of cloud migration, in a region where SMEs generate a large proportion of GDP but where cloud adoption rates lag behind wider Europe. Multiple drivers are helping close the gap: Governments are regulating to boost transparency and digitalisation in order to improve tax administration and collection; remote working and cloud-native entrepreneurs are boosting demand for SaaS cloud services; business owners are striving for greater efficiencies, and an effective digital presence as their own customers shift to online; lastly, European Covid-recovery funds are promoting SMB digitisation.

How we found the business

We focused on sourcing opportunities in ERP software because of the sticky and recurring revenues typical in this sector. Our platform acquisition of Ekon in March 2019 began as a carve-out process from Unit4, a pan-European enterprise cloud software business. Oakley’s strong track record helping B2B software players in accelerating their growth, and our partnership with entrepreneurs in the Oakley network, including Jeremy Roche, made us the partner of choice for them.

Creating value 

Buy-and-build is a critical value creation driver for the business. We saw the opportunity to consolidate a fragmented market and grow market share with almost 3.5 million SMEs across Spain and Portugal. We crafted three pillars for our M&A strategy.

(1) Build more market share across micro, small and medium-sized businesses. In addition to Ekon which focuses on larger mid-sized businesses, in 2020 we acquired Contasimple and Billage, whose software is used by Spanish microbusiness and freelancers, while in 2021 we added Portugal’s leading ERP software provider to SMEs, Primavera BSS. In 2022 we acquired Eticadata expanding our partner ecosystem in Portugal. Our strategy over time is to establish one platform per market segment across Iberia.

(2) Acquire businesses that are cloud-native to speed up the Group’s transition to cloud. Ekon at acquisition was 15-20% cloud but is now at 30%+. This also helps us to re-rate as software businesses with sticky cloud-based recurring revenues tend to fetch higher valuation multiples.

(3) Expanding into new verticals or industries.  Acquiring Prosoft has helped us expand into the construction industry. We invested into Diez Software, GSE, Profiture, Club del Asesor and Cloudware because they are leading software platforms for professional accountants, a critical part of Grupo Primavera’s client acquisition strategy as accountants can recommend the Group’s solutions to their own clients.

How we have helped

  • M&A and integration expertise: Oakley has helped put in place an M&A and integration team, and a scalable playbook. Since our investment in 2019 and in addition to the strategic acquisitions of Ekon and Primavera BSS, we have supported 10 additional bolt-ons. Each new acquisition provides multiple avenues for cross and up-selling as well as boosting synergies. A fast and efficient integration process is a key recipe for success, while Grupo Primavera’s recent rebrand will further help to foster a common identity, culture and purpose.
  • Finding the best talent: Santiago Solanas previously managed a €2 billion P&L as VP of Southern Europe (France, Italy, Israel, Spain, Portugal and Greece) at Cisco after senior roles at IBM, Microsoft, Oracle and Sage. We convinced him to join Ekon as CEO, a business significantly smaller in size, but with big ambitions. In turn, Santiago has attracted a top team of highly experienced executives to oversee and execute on strategy.
  • Business transformation: Oakley’s experience in B2B software and digital go-to-market channels has helped the company speed up its transition to the cloud by steering a fast migration of its installed base while efficiently investing in more direct customer acquisition.
  • ESG expertise: Oakley’s Sustainability team has supported setting up a central ESG working group with representatives from each of the Group’s business brands, to help identify and prioritise local environmental and social priorities and engage with local communities. This is helping to develop a strong corporate culture which also supports recruiting and retaining key talent.

What’s next for Grupo Primavera?

Today, Grupo Primavera serves more than 165,000 customers and 500 partners with a suite of business management solutions including a rapidly growing cloud-based SaaS portfolio. Grupo Primavera enjoys a strong competitive moat including a future-proof platform – 81% of new wins are SaaS – as well as low, single digit annual customer churn. Looking ahead, the Group is poised to take further share of a market expected to grow to €1.1bn by 2026 from €825m in 2022. Grupo Primavera can take advantage of cultural and linguistic affinities to expand further into Latam and Portuguese-speaking Africa and has a rich pipeline to execute further M&A across new verticals, channels and products.

Oakley Capital

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