Even though this will be a short dispatch owing to a crazy schedule as I settle back into the office as conference season winds down, I thought it prudent to let Spend Matters readers know that Hubwoo is once again on the acquisition prowl. This time the provider has snapped up AchatPro in what appears to be both a consolidation play in Europe as well as a small footprint extension to Hubwoo's offerings. Hubwoo is buying AchatPro, a European procure-to-pay provider with its own technology footprint, for 2.9 million Euro (which amounts to exactly AchatPro's 2007 revenue). At the time of the announcement, AchatPro had 40 customers and generated approximately 90% of its revenue from SaaS offerings (according to Hubwoo). I heard that the company was either close to or at break-even in their most recent quarter.
My sources tell me the plan is ultimately to migrate AchatPro's customers onto the Hubwoo SAP platform, but salvage aspects of the offering which Hubwoo does not offer today on the payment -- and the broader EIPP -- side of the Spend Management house. In addition, Hubwoo sees a strong opportunity to upsell the AchatPro customer base its sourcing and contract management offerings. On unrelated note to the acquisition, Hubwoo is also raising additional funds.
I will take a closer look at this acquisition in the coming week, although on first glance, it looks to be a smart financial move giving what appears to be a low-valuation for a good customer list and the associated revenue, not to mention the potential up-sell opportunities and footprint extensions the deal brings. The key will be keeping AchatPro's customers happy through the transition period before and after deal close (as well as convincing them to pay more in the future for a broader product set -- 40 customers and 2.9 million euro in revenue in the procure-to-pay space suggests a rather small deal size given industry norms).
- Jason Busch