Cranking the M&A engine: Basware takes aim at Glantus

Basware recently announced it was acquiring Glantus (subject to final regulatory and shareholder approval), an Ireland- and UK-based AP automation and recovery audit firm which also has operations in North America and Poland.
The deal is valued at £29.5 million including debt assumptions implying, based on Glantus’ recent tepid financial performance, a top-line forward multiple which we would estimate at somewhere in the neighborhood of 3X.
Not a bad exit all things considered.
Ostensibly, from a sponsor perspective, the acquisition may just seem a classic private equity scale play of buying a niche, targeted competitor (in this case by market segment and geography) that Basware would likely not have lost to in the past (with any frequency) based on the respective target ICP swim lanes.
Such deals are often accretive even at close. Then reduce costs slightly and you can drive even more EBITDA. Of course Glantus is relatively small (£10.5 million in 2022) making this, we’re sure, somewhat painful given the size (small deals are typically close to as challenging as big ones to pull off and integrate in terms of time invested and opportunity cost).
But Spend Matters believes there’s a bit more to the proposed transaction than meets the eye.
This Spend Matters Insider analysis explores Glantus and what it brings to Basware (and provides a summary overview of Basware).