Proactis to be acquired by Pollen Street Capital

Pollen Street Capital Adobe Stock

The private equity firm Café Bidco, a wholly-owned indirect subsidiary of investment funds advised and managed by Pollen Street Capital — a London-based, independent and alternative investment management firm — has reached an agreement to buy Proactis Holdings, a specialist in source-to-pay software.

Proactis is based in Northern England with an international presence, including in the UK, US, France, Germany and the Netherlands — with about 1,100 customers. The deal is estimated at over $98 million.

Alan Aubrey, chairman of Proactis, told "We are proud of the significant progress that Proactis has made over the past year, particularly after a very difficult period in Proactis' history. Whilst we remain excited about the prospects for the business, we have been in discussions with Bidco and received a proposal that we believe is compelling for all of our stakeholders.

"We are pleased that Bidco is supportive of the acceleration of Proactis' existing strategy and believe that Proactis will benefit from Pollen Street Capital's considerable financial resources, longer-term approach to value creation, and significant experience in successfully backing high-growth businesses to achieve their full potential.

"As a result of the acquisition, we believe Proactis will be both nimbler in executing its strategy and able to build a business capable of sustainable longer-term growth."

What’s interesting for Spend Matters is that less than two years ago, Founder and PE expert advisor Jason Busch wrote a Nexus (subscription required) piece, Proactis in Play: Arbitrage and Analysis, in which he predicted such a move following a takeover approach made to Proactis from an unnamed US investor.

“From our perspective,” he said, “a financial buyer of Proactis in a ‘take private’ scenario would be afforded the chance to fix a number of factors outside the quarterly reporting spotlight that will take time to address to return Proactis to being a strong growth business — even potentially without additional M&A this time.

"But beyond the play for financial buyers (which is likely the most probable move), other types of suitors could find additional value from Proactis,” and goes on to outline who these might be.

“The opportunity for both financial and strategic buyer groups to increase the value of Proactis’ diverse assets over a mid- or longer-term horizon — outside the scrutiny of the public markets — is very real indeed. And there are multiple ways one could go about doing it,” Busch concluded.

And now it has come to pass, with Matthew Potter, Partner of Pollen Street Capital, telling "We are pleased to have reached agreement with the board of Proactis on the terms of Bidco's offer to Proactis shareholders. We believe Proactis would strongly benefit from a return to private ownership with the support of a growth-focused shareholder, which would enable Proactis to accelerate its plans to capitalize on a clear market opportunity.

"Pollen Street Capital has strong heritage in supporting companies with the potential to be market leaders in the financial and business services sectors, and we are excited by the opportunity to work with Proactis and its team in achieving its ambitious goals."

According to The Business Desk, a regional UK business news platform, Proactis highlighted consistent new business deal activity, with a total of 29 new name deals signed (H1 FY2020: 29; H2 FY2020: 32).

Earlier this year, Proactis CEO Tim Sykes said when the firm released its interim results for the six months ended Jan. 31, 2021: “It is encouraging to see the progression of the Group over recent periods. … Churn has stabilized and is demonstrably back to normal. Despite the impact of Covid-19 on new business intake, we are continuing to grow the business again.”

The agreement is subject to all the usual checks and conditions.

How do you find the right procurement technology and vendor for your company? Spend Matters’ new 5-step “Procurement Technology Buyer’s Guide” can help — with how-to documents, checklist templates and other tips.

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First Voice

  1. peter smith:

    Jason Busch successfully predicting M&A developments in the procurement technology world? Well I never!! Proactis made some great small acquisitions, but Perfect Commerce proved to be… less than perfect… Anyway, I wish the team good luck and success, and hope they keep the Wetherby office.Not many successful software firms based in attractive Yorkshire market towns.

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