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S2P and Sourcing sector consolidation: Simfoni acquires EC Sourcing, and Esker takes a majority stake in Market Dojo (M&A Rapid Analysis)

01/11/2022 By

Last week, Esker, a procure-to-pay provider, announced it was acquiring a majority stake in Market Dojo, a UK-based sourcing provider, with a call option to purchase the remaining shares in the firm at a future date. And just this week, Simfoni, a spend analytics and spend automation provider, announced it had purchased EC Sourcing, another provider of sourcing technology (and sourcing optimization technology) with a focus on the North American market.

The acquisitions follow Workday’s $540 million acquisition of Scout RFP, another sourcing technology provider, just over two years ago, as well as Medius’ acquisition of Wax Digital, in 2019, the latter scenario providing a key example of an AP automation-focused vendor expanding its solution and commercial scope via a push into the source-to-contract space.

Taken individually, these two recent sourcing acquisitions are very different indeed (which we will explore in individual analyses of the deals in the coming week). But collectively, they have the potential to drive the continued reinvigoration of the sourcing market by providing additional reach and distribution for two niche assets that were previously capital constrained from a sales and marketing perspective because neither had raised funding.

This Spend Matters PRO Rapid Analysis provides a back-of-the-napkin analysis of both transactions: why each happened (deal rationale) and what each means for the acquiring firms (implications) — including hypotheses as to how each transaction could impact the sector. We also include a summary analysis which focuses on the convergence of bottoms-up modules into suites among a broad-cast of vendor characters following this strategy. Finally, this analysis also provides an introduction to Esker’s footprint and procure-to-pay capabilities (with a full Vendor Analysis of Esker publishing in Q1 2022).

Subsequent research briefs will include a deeper look at each transaction and each sourcing vendor in question, exploring functional strengths and weaknesses, customer implications and recommendations and deeper vendor/market analysis.

For extensive background coverage on EC Sourcing, Simfoni and Market Dojo, please see previous Spend Matters PRO coverage below:

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