Breaking News – Basware Acquires Procserve, UK Public Sector eProcurement Provider

This morning, Basware, the Finnish technology firm, announced it has agreed to acquire UK eProcurement firm Procserve, head-quartered in London. Just opposite Victoria Station, to be precise. According to the stock market release (Basware is quoted on the Finish stock exchange), “The acquisition price is approximately EUR 25.9 million. In 2014, the net sales of the acquired business amounted to approximately EUR 9.6 million”.

That makes the price some 2.7x revenues, pretty similar to the other recent deal in the procurement tech (Selectica and b-pack). Procserve’s profitability is not disclosed, but Basware say this; “In 2015 the company expects the transaction and integration related costs to exceed the savings. In 2016 the company expects the cost synergies to be marginally net positive. The savings relate for example to the creation of joined IT infrastructure and facilities”.

Procserve employs 61 people, and its eProcurement networks are used by over 33,000 organisations to buy, sell, and share information within online communities. Basware is a global leader in purchase to pay solutions, e-invoicing in particular, in which it is the leading provider in the Nordics, the Benelux market and Germany. The firm now strengthens its position significantly in the UK, in particular in the public sector, which is Procserve’s heartland.

It has been no great secret for some time that PA Consulting, the major shareholder in the firm, would be happy to sell at the right price, At 9.6m Euros, some £7 million, Procserve’s revenues are slightly higher than we might have guessed, and that (and the sales price) reflects well on Nigel Clifford and his senior team at Procserve and their work over the last two or three years.

Clifford is off soon, as we reported here, and the lack of mention of a successor at the time that was announced did make us wonder whether something like this was on the cards (as we hinted at the time)! He would have been a big gain for Basware too, but we understand the rest of the senior Procserve team are likely to hang around - that is important for Basware, as they do not have a great depth of management strength in the UK at the moment.

We also have a personal interest here, as we have just announced Procserve as a sponsor for Spend Matters. As we said then, Procserve has made a good transition from being a government-created entity to being an independent business, yet has kept its very close relationships with public sector procurement clients. The Procserve Commerce Network is well used around the public sector, and basically at one leap this deal puts Basware right up there as a key UK public sector player. This deal gives the firm a great opportunity in the UK to drive e-invoicing (with the EU mandate now in place), and extend that into supply chain finance as well.

We will have more on the deal in the next few days, but good luck and congratulations to everyone we know at both firms. And don’t forget, we have one of our famous Spend Matters Pub Debates in central London on Tuesday April 28th, from 5.30 - 7 pm, sponsored by Procserve! More on that shortly too.

(We should add that Spend Matters Europe was not involved with the deal in any way, although we know Basware too of course as a major player in our market). 

 

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